HP's DiFranco Promises More Channel Consistency, Integration

It's been 44 days since Stephen DiFranco joined Hewlett-Packard from Lenovo Group and during that time he said he's learned a lot about what HP's channel does -- and what it doesn't do yet.

"I walked around the company the first five days asking people what was our channel strategy. I asked 30 people and got 63 different answers," DiFranco told solution providers at Synnex's Spring Conference in Orlando Tuesday.

Among the things DiFranco, vice president and general manager of HP's Solution Partners Organization (SPO) -- Americas heard was that the company has 22 different ways to make a payment to a partner.

"There are only 12 programs we run functionally, but 22 ways to pay you. Why do we have 22 ways to pay you on 12 different programs? I came to the conclusion about 20 days in that clarity is really my mission. My job is to bring clarity to the channel of what HP's trying to do," he said. "I've learned in 44 days that we have lots of ways to connect but I'm not sure it's clear how you [solution providers] get into the HP DNA."

DiFranco said the move from Lenovo was tough because of the loyalty he felt to that company. He also noted that he knows he and HP still need to earn more loyalty from solution providers.

"It's more important for HP to earn that loyalty than any other company because we represent such a wide [range] of business. When you get a job like this you have ask the question what is the mission? Why are we here? What are we doing?"

In what could be a preview for DiFranco's presentation at HP's Annual Partner Conference in a few weeks, he illustrated HP's mission: To enable channel partners' growth with the broadest product and services portfolio, best in class Partner One program and an engaged executive team.

"I don't think we do this today," DiFranco said. "Partner One brings more dollars into the company than any other program in the industry but I'm not convinced it is the best aligned. That's one thing Tom LaRocca [HP's vice president, marketing and strategy, Solution Partners Organization, Americas] and I are working on. I don't want to say HP's been overly innovative in channel programs. We've done a pretty good job of getting to the big part of the channel, but not all the channel."

DiFranco said some of the biggest criticisms he's heard from partners since joining HP is about creating demand for solution providers. A fair point, he added. "I've seen a lot of programs to promote products but not enough to promote the refresh. HP has the ability to do that dialogue a little better in the channel," he said.

Next: Managing Three Companies Inside Of One

With HP divided into three mammoth groups, the Imaging and Printing Group, the Personal Systems Group and the HP Enterprise Business group, it's like having three companies inside a company, DiFranco said.

"We haven't done a well enough program to sell well enough across the portfolio. Our biggest print reseller doesn't sell any PCs. Most of our large data center/enterprise resellers don't sell printers. We haven't done a good job to make HP a franchise for us to work on," he said.

During his presentation at Varnex, DiFranco outlined 10 objectives he has with HP this year: create one channel, simplify PartnerOne, keep CEO Mark Hurd engaged with the channel, cultivate a culture of quality, drive channel economics, convert dollars to demand, streamline the machine, focus on the SMB channel, manage by metrics and cover the entire channel.

"I don't plan to change what Adrian Jones has done, but we have not spent enough time on our backend, internal systems, our product planning connected with channel planning. I'll spend twice as much time on the inside of HP as on the outside," DiFranco said.

Overall, HP will become more consistent and predictable with its channel programs in the next few years, DiFranco promised.

"We have been less consistent than we need to be, considering the size of the company and importance of our brand to present to customers," he said. "Our campaigns have been inconsistent sometimes and turned on and off too often. We will have longer time with campaigns that make them more predictable."

Next: Organizing SMB Channel Resources

In addition, DiFranco will organize the SMB channel resources in a more effective manner. He noted that HP has one reseller that has 16 different HP people come to visit him (which caused a member of the audience to retort, "Can I get one of them?").

"Mark Hurd didn't give me the magic wand. I asked for it, but he didn't give it to me. I can't fix all this overnight. But I'll focus on backend operations. We've got to get better on reporting. We don't tell you how well you're doing often enough. We need to be more responsible to you on how we report."

DiFranco took two questions from the audience. The first centered around HP's controversial decision to charge VARs $120 for a regulatory compliance training program, specifically whether that would become a yearly fee?

"The answer is I do not know if it will be an annual event. The truth is there are more complexities in a reseller network than before. The challenge is that there is a lot of data we have to collect and there is cost in that. If we're going to keep collecting data to use and manage and report to you, the cost is becoming millions of dollars. There are programs we come up with that we may ask for funding of the transactional cost if we believe we deliver value back. I appreciate it feels like charging pennies and it's annoyance. But it's the most democratic thing we can do. We tried to collect data and manage costs. If we don't do that, we have to increase other prices," DiFranco said.

The last question came from a VAR who asked DiFranco what he could do about HP sales reps he said have been targeting his customers for direct business.

DiFranco said HP's objective is not to sell direct outside of about 780 accounts that have self-selected to deal directly with HP.

"But we can't, with 330,000 people and 20 percent of the market, it's hard to control all the cats. I'm not surprised that some enthusiastic sales person might present a direct solution. I just need to know about it to help you fix that," DiFranco said. "I would love to say we have perfect control over every HP sales person in the world, but well, they are sales people. To sell direct is not our directive. It's not what Mark Hurd wants. I need to hear specifics [of channel conflict], by the way. I have to take rumor, get it to fact, then I can act."