HP Promises Major Increase In Channel Investment

"Channel investments are key," said Adrian Jones, HP's vice president and general manager, Americas Solution Partners Organization. "Last year we paid over $350 million in PartnerOne rebates and we plan to do more in 2008."

Jones, addressing solution providers at HP's XChange World Premier event, promised too that HP would pay more MDF and spend more on channel demand generation and training this year. He noted that HP's SPO increased its staff by 10 percent last year to better support partners.

"The SMB market in 2008 is a $72 billion opportunity and we need your help to reach all of the buying points in the market," he said.

Jones added that storage would be a top priority for HP in 2008, with a dramatic increase in partner incentives and new product rollouts key parts of the plan to jump-start a business that ranks number 3 in U.S. market share.

"Storage is a top priority for us and we want to grow that to be number one in the market," he said. "Our investments in storage this year will be unprecedented." He noted that HP increased its solution provider incentives for storage sales by 38 percent in 2007 and will double that in 2008.

Don Richie, CEO of Sequel Data Systems, an exclusive HP partner in Austin, Tex. said his HP storage business was down last year but that the additional investments in the business should help. "HP's new EVA 4400 is a great product for the midmarket and even the low end," he said.

Jones echoed the themes laid out by HP CEO Mark Hurd last week at the vendor's Americas Partner conference in Las Vegas. Hurd told partners that despite hiring more than 2,000 sales people last year, it's impossible for HP to ever find enough direct sales people to attack all of the opportunities available in the IT market.

Jones said that partners are crucial if HP is to build out its U.S. sales coverage model to increase its SMB market share. In an effort to attract more partners and better support existing ones, Jones said that HP is on a mission to make it easier and simpler for partners to do business with the vendor. "We reduced the number of channel programs from 140 down to 40 last year and we will reduce them even more this year," he said. "We listen to you everyday to get your feedback and guidance."

He added that HP also just combined its New Business Opportunity and Value Big Deal Websites into a single site so that partners don't have to enter data twice.

In a Q and A session following his presentation, several partners expressed concern that HP's retail push was casting doubt over whether solution providers or retailers were at the vanguard of the vendor's SMB push.

"Retail is more of a consumer brand play," Jones said. "We have been pretty clear on the lines of delineation between what the retail side is doing and what the commercial side is doing. They are separate within HP. We believe strongly that the commercial side is where we put our investments and our dollars from and SMB perspective."

In response to a question about why HP places too many restrictions on how its MDF money could be spent, Jones said, "If those guidelines are too stringent, we need that feedback. If there are other ways for you to grow using that MDF money, we need to talk about that." Jones summed up HP's 2008 channel priorities by saying to solution providers, "We want to invest more so that you can earn more. The channel is engrained in everything we do."