LAS VEGAS – There have been a number of significant changes in the senior ranks at HP Canada (NYSE: HPQ) lately, with John Cammalleri coming on board two weeks ago to lead the solution partners organization, and Peter Galanis moving into the president’s office last month.
By comparison, Charles Salameh seems like an HP veteran. Salameh joined HP Canada last summer as vice-president and general manager of the personal systems group, which includes a large chunk of the vendor’s go to market, after a career that included a stint with Nortel Networks. He replaced Derek Smith, who left for the Apple Canada presidency.
CDN sat down with Salameh at HP’s Americas Partner Conference this week in Las Vegas to discuss HP’s PSG go to market in Canada, how they’re tackling the SMB, and their competition with Dell. The following is an edited transcript.
CDN: From a PSG perspective, what are some of the key takeaways you’re hoping to have your partners leave here with this week?
Charles Salameh: I think there’s absolutely a great opportunity. I joined HP after working with a couple of very large companies, and globally with Nortel, and I think in my 25 years in the IT business there have been two phases in the IT evolution that were real opportunity times. Knowing where HP was in terms of the brand, in terms of its positioning, knowing the economic situation which causes a deep hole but then a steep hill in front of you – the year of the refresh – I think the world of opportunity is a key message. It’s a great opportunity for us. Our balance sheet is very solid, especially in Canada. I think the PSG team has grown over two-and-a-half-times greater than the market, and in HP globally, when a country or region shows signs of growth faster than market, global tends to invest heavily in those regions.
Opportunity and growth are the two major themes. The third, which I think is very unique to the channel partners, is this is the channel’s chance to engage us. They’re the ones touching the customers. With an opportunity to leverage the refresh and the economic upturn and the growth investments we’re putting into tackling new markets like SMB and health care, these are great chances for partners to combine their assets with our assets and be untouchable in the market. In Canada in the SMB, there’s a $700 million-plus market out there we’re not even touching yet. And we’re still number one today. So I think growth opportunity, and aggressive partnering.
In Canada in particular, one of my big goals is to reinstate Canada as the innovation nation of the world. I think our partners and us together can do that.
CDN: You mentioned gaining more market share in Canada. Where are you going to have to grow and invest specifically to make that happen?
C.S.: One of the cool things about Canada that I like is that Canada is like 10 little countries. There are broad programs that we’re going to put a lot of effort in growing deeper. We already have fairly strong positioning but we can get deeper relationships with customers in health care and, in Canada, there’s a lot of work between provincial and federal governments through our health care system, and in education. In Canada we have the unique opportunity to sell to boards, unlike in the U.S. where they’re selling to individual schools. That’s a great area for us to grow. And then over a million SMB customers, 300,000 of them in Ontario alone. And they’re different by region. You could have SMBs in Ontario that are more insurance and retail, whereas on the West Coast you could have tourism, hospitality, oil and gas. By region in the SMB we’re going to execute quite uniquely, and I’ve actually organized our PSG team to be very regionally-focused while having a very common strategy by horizontal vertical.
CDN: As we begin the refresh cycle, led by the SMB, where do you see the opportunity coming from? What are the strong segments from a form factor point of view?
C.S.: The interesting thing about the SMB is what our solutions can do, and the unique thing here in Canada is that our three business unit leaders are in the same building. We’re a very tight-knit organization. The unit leaders are all relatively together. And one of the things we’re realizing in SMB is with technology advancing today, it gives our SMB customers a chance to get at fully-integrated services that were generally just provided to the enterprise customers.
What we’re now able to offer is this Virtual CIO concept for SMB customers, to become their virtual trusted adviser, with our channel partners adding even more assets, like management services and break-fix services. We’re now able to penetrate right up the stack, from the form factor of the device which gives them the ability to use networking technology and converged infrastructures, and use it in a manner that’s conducive to their business, whether it’s thin clients or notebooks or work stations. And also, now, be able to integrate their printing activities in terms of our managed print, and leverage the power of distributed computing to be able to access HP productivity software on a per use-basis, all integrated into a particular device. One of the great things our partners can do is actually configure those, specifically designed for an SMB business.
This is very unique I think to what we’re trying to do here in Canada, pushing the power of Virtual CIO through the concept of all of the elements within the HP portfolio, and I think in Canada in particular all those assets are all lined up. When you put them all together you’ve got a recipe to create a virtual CIO capability for any SMB in the country.
So I don’t like to talk to much – especially for the SMB – about a particular form factor or a particular device, because it’s quite irrelevant to the business. It’s about how the device inter-works with networking, and how networking inter-works with the rest of the portfolio, whether its print or content or services to support their business. We’d like to talk more about that to the SMB, and frankly that’s what they see. If they just want a device they can go to Best Buy or Staples. They’re generally looking more for solutions, and that’s where the win for us is going to be.
CDN: How much are you butting heads with Dell in the SMB, and how are you helping your partners move the SMB conversation from one around purchase price to one around lifecycle cost and solutions?
C.S.: In a lot of ways, from using the power of our balance sheet to help with financing to working with major retailers and partners in SMB to get closer and bring customer service reps directly in-store to talk to customers, which is a value only HP can provide.
If we have to compete on price, we will. We have, and our partners have worked with us on a number of bids where we together wanted to make sure this was an HP partner deal. If we have to compete on a bundle and add more features to it, which may make the price higher than the component but you get all the additional features, we’ll add value-added contribution to it.
Like it or not Dell is a good company and they’ve done a good job of building their direct business, both online, and their direct shipped. But they want to get back into the partnership model because they’ve realized that if all they’ve got in the direct business is price they’re going to follow the commoditization cycle down. What we have is a channel partnership that brings a tremendous amount of value-added assets that we can add. If we have to compete on price we’ll go there but in Canada, if you look at the share results versus Dell, we’ve taken share points from them because of the relationships we have with our channel partners. It’s more of a problem in the U.S. In Canada, I think our partners have worked very well with us to keep them out.
