CRN Exclusive: HP's Top Lieutenants On The 2014 Game Plan

Veghte, Kadifa On HP's Partner/Product Offensive

HP Enterprise Group Executive Vice President Bill Veghte and HP Software Executive Vice President George Kadifa, who have teamed on HP Converged Systems, talk on the eve of the company's Global Partner Conference next week in Las Vegas about the partner opportunities for 2014.

What is HP's competitive advantage?

For the channel, some of their traditional partners are not innovating and delivering nearly at the rate we are. And you have companies logically entering or selling. What we have to do on the most basic level is we have to innovate. I am going to innovate on technology that enables outcomes. I am going to innovate on business process that enables outcomes. And then I am going to put the best damm team that I possibly can on the field of play.
-- Bill Veghte

How have you restructured the organization to drive more partnering with the channel?

The way we are organized is every territory has a partner business manager, so there is a direct link between the deals on one end and the partners on the other end. So when I go into Salesforce.com on every deal in the Americas, we always have a partner slot that shows who we are working with on that account and how can we leverage that relationship. Basically, we are institutionalizing partners as part of our day-to-day activities. We are also doing joint campaigns. Structurally and operationally, we are doing a lot to make the whole partnership model intrinsic to what we are doing.

-- George Kadifa

What is the HP campus networking opportunity?

We just have a better mousetrap. It's better margin for the channel. It is a much lower TCO for the customer. I have some partners say, ’Cisco has been good to us over the years and core data center is hard.' I got it, but we just won the biggest data center build-out in the U.S. last quarter. We showed up with our A game. That was the biggest data center in the U.S., and we won it. We won it because we had better technology.

-- Veghte

How are you getting infrastructure partners to drive software into the market?

Lots of value-added resellers see us as a hardware business. So what we are doing is saying, ’Instead of you suddenly changing your whole business model to have a software personality, why don't we give you a value- add where we are putting software on top of the capabilities you have today?' That is why the Vertica appliance is very important. It sits on top of the Converged System 300 so whoever basically knows how to implement and install that can very quickly add some software on top of it. It is a one-price appliance vs. a combination of software and hardware pieces.

-- Kadifa

What is the ConvergedSystem 300 and 700 virtualization opportunity?

It is fundamentally a more efficient and faster way of virtualizing. The performance and cost is much better than [VMware-Cisco-EMC's] VBlock. It is precertified, pretested, single management plane, lower price. Now I show up to a partner and say I can guarantee delivery to you globally in 30 days, where the other guys can do it 45 days. And on the base configuration I can do it in 20 days. And I am paying you points. So let's go [start selling]

-- Veghte

What are the other software ConvergedSystem opportunities for partners?

For cloud it is the CSA [Cloud Service Automation] and for backup and manageability it is basically the StoreOnce and the data protect from Autonomy. A lot of partners sell private cloud, so we have integrated our CSA on top and also our monitoring and automation tools. We are also doing the same thing with our backup and recovery software. It is software on top of StoreOnce backup and recovery and archiving software. There we are working with our storage group to have one integrated model.

-- Kadifa

How critical are partners to customers grappling with how to adapt to the ’new style of IT?'

Customers desperately need partners to be superheroes. The visual I use is the dude in the red cape. You go into these small and medium-size businesses and IT is a core part of how they run their business and, whether you call it mobile, cloud or big data, whatever you call it, they have got to be able to take that next step. And it is really, really hard. They desperately need people that can help make them superheroes. And the channel has that role. What we all have to do is step up our game. The channel has to move at the rate that the market demands.

-- Veghte

How many partners do you want to reach with HP software?

We want to do it in a seamless way. We want to do it for 100 percent of our channel. We are not going and selecting people. We want to be as broad and as helpful as possible. You can segment the market 12,000 ways and select partners. We are not following that. We are following a broad horizontal play with volume capabilities. So, for example, on the cloud side you could be in health care, retailing or any kind of company as long as you know how to position cloud services on top of our cloud converged infrastructure
-- Kadifa

What is the mood of the HP executive team going into 2014?

It's ’fun' and I use that word consciously. It's a group of people that are clear on where we want to go, and where we want to go in the context of the customer and in the context of the role of the channel. There is a level of clarity and mission and focus that is energizing. You can go into the security group in software. You can go into the server group in EG [Enterprise Group] and what we have effectively been able to do in the last year and half, and it is sort of what I have spent my life doing, is building this.

-- Veghte

Talk about the collaboration between Enterprise Group and the Software Group.

What we are doing is basically aligning the two groups with common incentives. It is not like suddenly you are unplugging the whole thing and unbundling it. We have a bundled solution with one price and all the backup and supporting material is there. So we are very confident that it should work. We are observing it. I get a weekly report. I know exactly what the pipeline is right now, which accounts, where it is and with whom.

-- Kadifa

What impact has CEO Meg Whitman had with regard to the turnaround?

Meg has just been a remarkable addition to the equation, getting people focused on the sense of opportunity. I give Meg a lot of credit for this, which is how you set the tone at the top with what you accept and what you don't accept. It matters. She is out to win. She is out to deliver better customer outcomes. She is out for HP to be successful. And when you show up in a conversation and you say, ’How does that help the customer? How does that help the partner? How does that help us win against the competition?' If it doesn't, what the heck are you doing?

-- Veghte

What is the channel progress in the security software segment?

With security we are a little bit higher than 60 percent [sales through the channel], and the channels are very healthy. We are really feeling good on the security side. We are almost at mission-accomplished level in security. You get to 65 percent to 70 percent, then I have to look at my sales force and say, ’Why do I need you guys?' Maybe we will come to the conclusion that we don't. But we are not there yet. We have made a lot of good progress on security.
-- Kadifa

Talk about how you feel about the future of the Enterprise Group.

I think we have an enormous opportunity, but we have got to earn it every single day. I respect what the competition can do. I love Andy Grove's mantra that only the paranoid survive. We have to be paranoid and we have to move every second, every minute, every day, every week and every month because this is a race. It is a race to provide the very best value every single time. We have made huge progress over the last two and a half years. But we have to make the same progress again.

-- Veghte

What is the Vertica partner opportunity?

Vertica did not have really a channel strategy. I think channel is like 4 percent [of Vertica] sales. That is all upside. If I am an HP partner I look at Vertica and the Vertica appliance, and I say this is for us to take. I would encourage everyone to do that. We want to drive a higher level of partnership with Vertica.

-- Kadifa

What are top two or three opportunities for partners going forward?

The market needs a better way to virtualize -- 45 days is insane. The market needs someone to help them on this journey to a hybrid cloud. Mobility is not a device; it is an experience. The cost around remote office branch office is crazy. There is still a bunch of IT that needs to be modernized. The list goes on and on. There is a lot of modernization that still needs to occur. The ability to take this ocean of data and translate it into analytics cannot be something that only Fortune 50 companies address.

-- Veghte

How far has HP come in the last year in software partnering?

I feel like we are 200 percent better than we were a year ago. We needed [channel] leadership. We needed structure where the sales force was integrated with our partners. Those two got accomplished. We needed products where our partners could actually succeed and it is not going to be a full change in personality for them. And we have management systems tracking where we are, where we are heading and we are measuring it. Are we perfect? No. But I am very, very encouraged.

-- Kadifa

How do you view the role of the channel in the Enterprise Group?

Every single day I get up and say, ’What is the most efficient way to deliver this outcome for customers?' And the most efficient way has an element around innovation, the most efficient way has an element around operating model, and the most efficient way has an element around go-to-market. And I firmly believe that in many, many cases -- and I say this to my team every single day in most cases -- the partner is going to do it better than you. So we are going to figure out how we simplify and enable our partners. Because if we do not, we will die.

-- Veghte

Talk about how important it was to add software to PartnerOne.

It is necessary because we want to be one HP and help out. We could not declare victory just because we are in PartnerOne and think that everything works. There is a lot to be done. This is like you belong to a church but you have to show up every Sunday. Otherwise it doesn't count. It is the same story here.

-- Kadifa

What is the message to the channel as you head into the Global Partner Conference?

The channel and HP are in business to deliver better outcomes for customers and get profitable growth. We have a community and a team of people that are better than any of our singular competitors in the marketplace. What I want the competitors to know coming out of GPC understanding is: We have a vision, we have innovation, we have a really strong leadership team and we are moving with tenacity and courage. Bet against us at your own risk. Bet with us for growth.
-- Veghte

How big an impact has Whitman had on the partnering culture at HP?

The impact is huge. On the partner side, I remember the day she put the EC [Executive Committee] in the room and said this company was built on partnership and we have kind of forgotten about it and we need to make sure that happens. She has been very consistent in that message. She delivered it at GPC last year and she will deliver it this year. She is constantly engaged. Every time she visits a partner she usually sends us an email. To her a partner is the same as a customer. There is no difference.

--Kadifa

What is the spirit of HP today under Whitman?

Meg has us operating as a team. When you cook a meal, you need a chef. The correct ingredients alone are not enough. The team spirit that she instituted in us is the enemy is outside and not inside. Break the boundaries between the various organizations and focus on customers and partners. That is very, very important. In the old days, the business units used to basically be positioned against each other, almost like a holding company. Her strategy is more of an integration company to offer the best value to our customers.

--Kadifa