HP’s Hurd wants partners to dive deeper, drive attach

Published: April 28th, 2010

Las Vegas –As much as partners want predictability and reliability from their vendors, Mark Hurd says vendors also want the same from their partners. The Hewlett Packard Co. (Nasdaq: HPQ) CEO went about fulfilling his half of the bargain in his keynote Tuesday at HP’s Americas Partner conference, promising partners more profitability if they dive deeper into HP’s product portfolio.

While HP hasn’t always been a company that puts the channel first, Hurd said HP has worked hard to get to a point now where it’s driving more revenue through the channel than ever before, and it has done it by ensuring HP is completely neutral on the economics of the different routes to market, reducing channel conflict.

“We’re completely neutral on the economics, and we do a lot of work on that,” said Hurd. “Economically it’s immaterial to us what method of distribution we use, and therefore you’re huge to us.”

HP is working hard to drive standard components across multiple product lines as much as possible, particularly with the walls breaking down between servers, storage and networking. Hurd calls that evolution a fait-accompli and, with 80 per cent gross margins vs. the lean margins in PCs and servers, there’s profitability potential for both HP and its partners.

To that end, Hurd said he wants partners to drive deeper and deeper into the HP product portfolio, seeing the breadth of HP’s solutions as a key competitive differentiator over its competitors in point markets. It’s on the ability to integrate from end-point device to networking to data centre, enabled by trusted channel advisers, that HP wants to differentiate.

“When we deal with partners we want them to deal with a portfolio of products and drive attach at every turn,” said Hurd. “You’re not going to be able to be, in isolation, a network player or a storage player or a server player.”

Hurd said HP is committed to the networking space, where it has grown-out its ProCurve play with the addition of 3Com, now going to market as HP Networking and butting heads with incumbents such as Cisco Systems (Nasdaq: CSCO).

Here, it’s again HP’s converged infrastructure vision for the data centre that it’s betting will be successful.

“You’ve probably heard speeches that the world will revolve around the network. Well, go and check their profit and loss, I’m going to bet their business revolves around the network,” said Hurd. “I’m suspicious of anyone that says their intellectual property will dominate, because I don’t think that’s how it’s going to work. We’ll need to be prepared to mix and match capabilities based on business needs, and we’ll need the intellectual property and capability to adjust.”

If partners are going to go deeper with HP though, Hurd acknowledged the vendor will have to address channel complexity. Admitting that HP has made it too complicated for partners to get invested, trained and certified across multiple silos with different configuration tools and access points, Hurd said that complexity must be addressed.

“The deeper the channel is invested in us, the better off we feel. But we need to make it easier for you,” said Hurd. “In spite of popular belief, we actually have no strategy to make it harder. We’re actually trying to make it easier.”

While HP isn’t there yet, Glenn Siverns, chief technology officer of Surrey, B.C.-based HP partner Basic Business Systems, said he believes they’re on the right track.

“I get the feeling that HP sees where they need to be, they see where I think they should be, and I think they know where they’re lacking,” said Siverns. “I don’t think they’re quite there yet, but I get the feeling from this event that Mark Hurd certainly feels our pain and knows what we’re looking for to be successful.”

With Basic Business Systems playing primarily in the SMB space, Siverns also said the converged infrastructure messaging is compelling for Canada’s SMB-dominant market.

“I think small businesses need a complete solution, just like enterprises do, so to be able to go to a single vendor and have all those products is important, and I think it’s going to bring management costs down,” said Siverns. “Certainly you’re going to see Cisco and other players come to the table and start to match that view of how the computing model should look.”

The converged messaging is also finding favour with Winnipeg-based HP partner Epic Information Solutions. Epic president and CEO David Reid said HP has always had a strong, broad-based portfolio, so bringing the value-proposition together makes sense.

“It’s well overdue for HP to bring all the different components together and try to start creating a message about how important it is to have things that work well together, with one provider. So I think it’s a good message, and it will be interesting to see how it plays in the market,” said Reid. “The next 12 months will be interesting for sure. At the end of the day, it’s going to be our customers that decide who they want to buy from and what the best technology is for their business.”

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