HP Extends Compaq's Elite Storage Program To HP VARs

"We are enabling a group of partners to beat EMC," Burke said.

The ESE program is an extension of Compaq's Enterprise Storage Solution Specialization (ESSS) program, Burke said.

As part of the plan, being ramped up in conjunction with HP's new PartnerOne, ESE partners must meet SAN certification requirements and sell $150,000 in HP enterprise storage per quarter. Under the legacy Compaq ESSS program, sales requirements were $125,000 in enterprise storage per quarter.

In addition, Burke said HP is revamping the territories that ESE participants can operate within. This will reduce competition between partners and improve margins, he said. Starting November 1, the company will create 11 U.S. territories, the same number it has for the company's entire direct and indirect sales organizations. Previously, Compaq had five regions, he said.

Also, ESE partners will receive additional rebates for membership in the program. Under the Compaq plan, the rebates were about 4 percent. Burke said HP is still working on the rebate structure but that they should be similar to the old Compaq plan.

"If you're in this program on enterprise storage, you will make an incremental 4 points beyond any other partner going into that deal, unless they are also an elite partner," he said.

HP conducts quarterly reviews of ESSS--and now ESE--members to determine eligibility, Burke said, including evaluations of enterprise storage revenue for the previous six months. He said HP will drop about 20 of its partners from the program, a result of some solution providers being acquired, closing, or falling below the revenue bar.

At the same time, HP will look to expand the program to new partners, and on Nov. 1 is welcoming Lilien Systems, a Mill Valley, Calif.-based solution provider, as the first pre-merger HP partner to join the program, Burke said.

Lilien was also the first to get Compaq Authorized Enterprise Reseller (CAER) status for Compaq's StorageWorks products after the merger was announced, said Geoffrey Lilien, president of the solution provider.

The company has been an HP partner for about 11 years and has been HP-only since May 5, 1999, the day HP ended its reseller arrangement with EMC, Lilien said.

The transition to legacy Compaq products and programs has been quite smooth, as the Compaq side of the merged company has had better training that the old HP, Lilien said. "But the [elite status bar is higher for Compaq products," he said. "The HP bar was focused more on sales, while Compaq has been focused on certifications. That helps keep the bottom-feeders out of the deals."

As with the ESSS program, HP hopes to maintain about 50 partners under the ESE program in order to make sure each major metropolitan area is covered by two to three elite storage solution providers, Burke said.

Final details of the plan should be worked out by the end of the year, Burke said. The ESE program will be separate and distinct from HP's PartnerOne channel program, set to launch Nov. 1, he added.

"The product access is different than PartnerOne," he said. "Whether you are a [PartnerOne Platinum or Gold member doesn't automatically give you the capability to sell all of the products."

"This is great news," said Don Richie, president of Sequel Data Systems, an Austin, Tex.-based solution provider that expects to be part of the ESE program. "This will mean if I have an enterprise storage deal in Texas, I won't be competing against someone from Minneapolis."

One current ESSS partner said expanding the program to new partners is fine as long as they pass the required tests.

However, that partner, who requested anonymity, said it is not always clear what partners get out of the program, except a few extra dollars. Also, it is hard to get information from HP as to how the program will change. "I sat down with my HP sales rep to discuss this, and he doesn't know what's going on," the partner said.

There is one benefit to ESSS, and hopefully ESE, authorization, the solution provider said. "We've gotten reference sales from other VARs," the partner said. "We're small enough that a VAR who lands a storage opportunity in the enterprise space and can't handle it can partner with us and know we won't compete with them."