Hewlett-Packard, Agilysys Team To Up Services Rates In Channel

Hewlett-Packard is pushing partners to increase their services sales, and it's enlisting one of its top distributors to get the job done.

The computer maker recently teamed up with enterprise distributor Agilysys to raise the levels of services attach rates among its solution providers. Agilysys' distribution division, Keylink Systems Group (KSG), introduced a new HP program, dubbed Services Surround, at its recent Executive Partner Summit in Cleveland. The program is designed to show HP partners how to attach HP-branded services to hardware and software sales and provide incentives to increase the attach rates.

"There's no more margin in hardware, so VARs need the services," says Pete Jensen, senior vice president of marketing at Agilysys.

Jensen also says that KSG recently has seen double-digit growth in services for HP partners. Indeed, according to KSG's research of 17 HP partners, 11 of the solution providers displayed double-digit growth in services attach rates in fiscal 2005, while all 17 added nearly $10 million total in services revenue to their businesses during that time.

Pete Montana, vice president and general manager of Agilysys' HP business unit, says Services Surround aims to help HP partners increase their profitability through bigger services margins.

"We're seeing the same pricing and competition around systems as everyone else, so we're trying to help our VARs tie other things to the hardware, like services," Montana says. "That's where we, as a distributor, can really contribute to their businesses."

John Thompson, vice president and general manager of HP's Solution Partners Organization Americas, says services is just one of the ways HP partners have been boosting their sales and profits lately.

"We're had five consecutive quarters of partner revenue growth," Thompson says. "I've seen some of the fastest growth among partners of the past five years."