HP Turns Some Enterprise Accounts Back To Channel

The new Enterprise Sales Engagement Model represents a potential windfall for HP enterprise solution providers and is an acknowledgement by the vendor that the channel is the most effective way to grow its business in many accounts HP had been dealing with on a direct basis, solution providers and distribution executives said.

"Five billion [dollars] is a lot. This is a huge deal," said John Thompson, vice president and general manager of HP Americas' Solution Partners Organization, noting that the accounts represent more than 30 percent of those managed by HP's direct sales force. "We are doing this primarily for [better] customer reach and penetration and the local coverage capabilities that [HP solution providers] have."

Steve Tepedino, president of Tempe, Ariz.-based Avnet Partner Solutions (APS), said, "This is a windfall. We have a significant new market that is channel-led, and now it's up to us to execute."

Thompson discussed the plan in Phoenix at the Enterprise Partner Summit held by APS' HP business unit. HP solution providers attending the event were excited by the new business prospects.

"This is a very clear signal that HP is serious about channel engagement and channel value," said Gary Shottes, vice president of marketing and business development at Amherst Technologies, Merrimack, N.H.

"This feels great. We're going to be on the receiving end of some of this business," said Geoffrey Lilien, CEO of Lilien Systems, Mill Valley, Calif.

Thompson said the new model mandates that sales of HP enterprise products, including Unix, Alpha servers, enterprise storage and software, must flow through the channel in the roughly 250 named enterprise accounts. The move reduces the number of North American accounts that HP, Palo Alto, Calif., will target for direct sales to about 500, down from 750.

Thompson said HP's North American enterprise sales force went through mandatory training on the value of the channel and the penalties for trying to sell into accounts now controlled by solution providers.

Thompson said any salesperson who sells into an account reserved for the channel will see the sales credit he or she would have received deducted from his or her sales goal.

HP has mapped the capabilities of its enterprise partners and will transition business based on expertise, investments in HP, geographic coverage and more, he said.