Air Cover: HP Launches Public Cloud Partner Program

The new program puts HP into a market where cloud service providers such as Amazon, Microsoft, Rackspace, Verizon's Terremark division and others already have established partnerships with solution providers. It also comes a few days after Amazon's Redshift -- a new data warehousing service positioned as a lower-cost and big-data-ready alternative to traditional enterprise data warehouses from vendors such as HP -- was released for general availability.

[Related: Whitman's Partner Profitability Pledge Has HP Partners Literally Cheering ]

HP initially will allow VARs to act as agents, referring customers to HP with annuity-based commissions at the rate of 10 percent for the first year of referred customer usage and 5 percent for every year thereafter as long as "the partner's established revenue growth goal is exceeded," according to the company.

In the summer, HP plans to offer a resale program through which VARs can resell the HP public cloud offering, maintaining the billing and customer account management rather than just referring customers.

Rich Baldwin, co-founder and chief strategy officer of Nth Generation Computing, a San Diego-based HP enterprise partner, said he sees the new cloud partner program as a strong addition to a partner program he called the "best in the business." Baldwin said he anticipates HP partners that sell a full portfolio of HP products and services such as the HP public cloud service earning more money in the future.

HP, Palo Alto, Calif., has been piloting the program for global system integrators (GSIs) and VARs since last June and already has gotten "significant traction" and interest from partners, said Dan Baigent, senior director of business development, HP Cloud Services.

"We think there is tremendous demand for this program," said Baigent. "We think that VARs and GSIs are being challenged by their customers to be more cloud capable and savvy."

VARs and integrators must go through some HP training, but it does not require a major capital expense on their part, said Baigent. "We want this to be very inclusive," he said. "We are going to include as many VARs and GSIs as we can."

HP, meanwhile, claims its annuity referral plan is more beneficial to partners than competitive offerings. "We have a market-leading position on that annuity-based payment," Baigent said. "It is at a very robust level and lasts for the life of the partnership. Most competitors tail off after a certain period of time. I think we are going to find VARs and GSIs very excited by our program. It is a very generous program."

Many VARs are interested in doing the billing themselves, but that program has not yet been implemented, said Baigent. "That is one of the things they want to be able to do -- resell those public cloud services and be the partner of record for that customer relationship," he said. "The reseller program is extremely attractive to these partners. They can mark it up as much as the market will bear."

The advantage to the referral program is the VAR does not have to maintain the complex billing systems and user management, said Baigent. In addition, he said, partners can leverage a comprehensive set of tools and capabilities that positions them as trusted cloud advisers.

"A lot of VARs and GSIs are struggling with how to become a trusted adviser and be a pertinent vendor to their customers when this 'Wild West' of cloud is hitting them and hitting their customers," he said. "What we are bringing to them is a coherent answer for how to help enterprise customers embrace cloud in private and public cloud environments with a very compatible, very open, no-vendor-lock-in strategy."

PUBLISHED FEB. 20, 2013