DiFranco: We Want Partners To Present The Full HP Product Portfolio

HP wants its solution provider partners to invite the $126 billion computer giant to the table to represent the full HP product portfolio on every deal. And if the company doesn't get that shot from partners then it will find another way to get in the door.

That was the message from HP Vice President Solution Partners Organization Stephen DiFranco in an interview with CRN at the Synnex VARnex conference this week.

"We understand we may not have all the pieces and we understand that your customers have already made choices on other brands but we want a shot for everything that your customers are buying," said DiFranco in a call out to HP partners. "And we are asking our partners to give us that opportunity to go present the entire HP portfolio. If we are not going to be invited in through our partners, we'll find a way to get to that customer and make sure we have an opportunity to present the entire HP product line."

While HP would prefer that its partners sell only HP products, it's not a requirement, said DiFranco. "There has been a lot of noise that HP wants you to sell only HP and nothing else," he said. "Of course, we want you to sell only HP and nothing else. That is what our job is. But it is not very likely to happen that way. You have got to sell what is best for your customer. All we ask -- and I want to be very clear about this -- is an opportunity to present the (HP product) line."

DiFranco stressed that HP is making huge investments in building out a full HP product portfolio of cloud-related IT products, software and services and simply wants the opportunity to get a return on those heavy investments by teaming with its partners. "I think our job is to create a portfolio that earns the right to be always presented and I think we are doing that," he said. "You can't expect us to make the capital investment to build this portfolio and not present this portfolio. That is why we are building this portfolio and not creating some kooky alliance. That is capital investment. We are taking the money that we make and we are reinvesting it in this industry so that we can bring forth a full end-to-end portfolio."

HP has made a no holds barred effort to upgrade its product portfolio to best of breed status with both its nearly $3 billion R&D budget along with high profile acquisitions. That includes a public bidding war against rival Dell that resulted in its acquisition of storage vendor 3Par for $2.35 billion. 3Par's thin provisioning capability is recognized as second to none and has led to significant revenue gains in the storage market for HP.

Next:HP's Franchise Partners Show Big Sales Gains

DiFranco's call out to partners comes with HP offering partners that sell the full HP product portfolio additional rewards under its PartnerOne channel program. Not only that, but HP contends that its franchise partners, those that sell the full portfolio and derive at least 70 percent of their sales from HP products, are growing at a much faster clip than those that sell the HP product line in a piecemeal manner.

DiFranco said that HP partners that sell the full HP product portfolio grew at 50 percent in 2010 compared with 18 percent growth for partners that do not carry the full line. What's more, he said, HP's top franchise partners grew at more than 145 percent in 2010.

DiFranco sees that trend continuing in 2011 with a goal for HP franchise partners to grow at about 80 percent compared with about 20 percent range for partners that do not carry the full product line.

Case in point: Chris Case, president of Sequel Data Systems, an HP-exclusive enterprise partner headquartered in Austin, Texas, grew its HP personal systems group business from $1.8 million in 2009 to a whopping $22 million in 2010. He sees HP's full product portfolio call to action as critical to his company's future growth. He said it is only fair that a solution provider that is fully committed to HP gets additional benefits. In fact, he has pressed other vendors that Sequel represents exclusively as a "go to partner" for additional benefits.

"Those additional benefits are very important to us," he said. "HP is finding ways to get us into the door of accounts. And we have taken them into quite a few accounts. Our relationship has never been better and the product line has never been stronger. If you look at the options we have now with the HP product line, we have something that makes sense for every customer. It's a product line that is strong enough for us to bet our business on it."

John Convery, executive vice president of vendor relations for Redmond, Wash. based Denali Advanced Integration, one of HP's top enterprise partners which carries the full HP product portfolio and recently won an imaging and printing growth award at the HP Americas Partner Conference, said HP product portfolio breadth and depth is unmatched in the business. He said Denali grew its HP business 31 percent last year and HP is by far the solution provider's number one vendor in terms of overall revenue. "The HP portfolio is in Denali's DNA," said Convery. "HP is the only partner I am aware of that has portfolio depth from the client to the data center."

Next: Acting As A Trusted Advisor For Customers

All that said, Convery stressed that Denali acts as a trusted advisor and consultant for its customers representing multiple vendor product lines. "We have made major investments in certifications across the board," he said. "We do that so we can delight our customers with a great experience and deliver results. The customer always comes first. We are consultative. It is not about the product or the vendor. It is not about a SKU. It is about solutions."

Convery stressed HP's full portfolio drive with partners is no different than the all-out push from other vendors to get customers to buy a full integrated end-to-end product stack from client to server to data center. That battle has made the solution provider's role as trusted advisor to customers even more critical, he said.

"It's a war out there right now," he said of the competing vendor product stacks. "Customers are confused. That's why they choose a partner like Denali. We can sort through the hype and give them real solutions."

As for HP's call to get partners to represent the full product portfolio on every deal, Convery said: "Everybody has a right to compete. You can't fault them for that. That is just their competitive juices flowing. It is no different than any other vendor. That is the nature of sales. Your competitive juices start to flow. You close deals and leap to the rafters and high-five one another. You can't win them all. You just have to win more than you lose."

Bob Venero, CEO of Future Tech, a Holbrook, New York enterprise partner that holds authorizations and certifications from several dozen vendors and grew both its HP and Dell business at a double digit rate in 2010, said it is not a matter of representing one vendor's product portfolio or competing vendor's product portfolio in an account, but rather the right solution for the customer. He estimated that less than one percent of the enterprise customers he works with have standardized on a single vendor's product portfolio. In fact, he said, enterprise customers like to have at least two vendors for a solution in order to drive better value.

Venero said solution providers have to be careful not to align themselves with a single vendor. "If you have a round-hole with a square peg, how are you supposed to provide a solution for your customer?," he asked. "Granted HP has a great portfolio of offerings, but they don't cover every aspect of an enterprise customer's needs. As a VAR providing the best solution for the customer, we have to have vertical business expertise and knowledge of the customer's business. We have to be a well-rounded organization with multiple vendor offerings."

Next: A Change In The HP Partner Landscape?

One CEO of a top HP partner, who did not want to be identified, said he sees vendors like HP demanding more loyalty from partners. What's more, he said, that the strategic shift toward integrated solutions by vendors is reshaping the solution provider landscape. "Companies like HP, Oracle and Cisco are going to get bigger and they are going to demand their channel be loyal," he said. "I don’t think they are going to allow their resellers to walk into their (largest) customers five years from now with alternative solutions."

Another CEO of a major HP partner, who did not want to be identified, said the HP move to get to the table on every deal discounts other vendor relationships that solution providers have built up over time. "Many of us created our vendor alignments at at a time when there was far less conflict between vendors," said the CEO. "We built the portfolio around the core strengths and capabilities of those vendors and they were complimentary. Today, we have different circumstances where traditional network vendors are trying to build data center servers and vice versa. We understand where HP wants to go. But we think there needs to be a transition plan. How are we going to get from where we are today to where we need to be? It is hard to flip a switch over night."

The CEO said the HP full product portfolio push is coming primarily in the global 1000 accounts with HP's enterprise server, storage and networking (ESSN) business. He said in that market the HP full product portfolio push has the potential to reshape the HP solution provider landscape into just an extension of the HP ESSN sales force. "The question is: does the channel become merely an extension of their sales force or are we really playing the role the channel ought to be playing?"

DiFranco, for his part, said HP understands that solution providers have to act in the best interest of customers. Furthermore, he said HP is not demanding that solution providers sell HP and nothing else. He said HP's strategy is to continue to expand the product portfolio in a bid to provide an integrated solution that partners can sell to customers. "What we are trying to do is put together a thoughtful portfolio so that a value added reseller can evolve from selling bits and pieces to being able to sell an integrated solution," he said. That said, DiFranco noted, HP recognizes that it is "very likely your customers are going to have integrated infrastructures from our competitors and they will continue to want to buy those.

"We understand that," he said. "And if you get any feedback from HP that doesn’t sound like it is consistent with what I am saying, I want you to call me and we will get it right."