HP Seeks to Make Amends

Hewlett-Packard partners are skeptical of the company's new pledge to correct the mistakes it made in fraying channel relationships. It is the small and medium business (SMB) market which took a specific hit from HP's actions, and those partners in particular are uncertain of the future.

Over the last year, it has materialized that HP has not been able to communicate its strategic channel decisions well with its partners (for example, the reducing of help for small and medium business-focused partners, and the rebranding of its Solution Partners Organizations [SPO]).

Matters have still not improved much for HP partners, and some competitors have been using HP's situation to pull away from the SMB channel business.

Pete Busam, the principal of the Marlton, New Jersey-based Equilibrium Consulting, a firm which works with partners of HP, has stated that HP recasted its previous SMB channel representatives as field representatives aided partners with annual sales of a minimum $250,000. All other partners can only receive help from the HP call center.

Busam stated: "The small guys are more frustrated than ever, and they are going to partners such as Lenovo, and even Dell, because they can get someone on the phone to help them. HP's partnerships are fragile and they need serious improvements quickly, because this is hurting sales."

Another problem is that medium-sized businesses which are doing really well are unable to attract the attention of HP. One partner, who wishes to remain anonymous, grew his HP business from $400,000 to $1.2 million over the course of 2012. However, HP persists that a third-party firm, MarketStar, is most suited to support him.

The partner was, additionally, only able to utilize the company's SMB call center; this comes in spite of the fact that this partner was doing well over $250,000 in HP business in 2011: "HP is a huge company that does not understand what it's like to work with them from a perspective of a smaller company. That is, and has always been, part of the problem."

HP denies that channel support is divided over the revenue generated by particular partners, stating: "Not all partners have dedicated sales reps, HP does not have a set revenue bar for determining sales coverage."

In 2004, HP formed Solution Partners Organization (SPO), which merged the company's enterprise and commercial channels into one worldwide entity. This included a sales and marketing team which supported over 25,000 partners and distributors of HP. Although SPO was renamed to Channel Marketing Organization, HP maintains that the functions and programs have not changed.

However, partners do not agree with this latter statement; SPO was a strong advocate for partners and was able to provide cohesiveness over the business units of HP; Channel Marketing Organization does not appear to be able to do the same.

Last week, HP spoke of the need to "rebuild [its] business relationships with [their] channel partners." The company plans to increase investment in the channel this year, although the amount remains unclear. A spokesperson stated: "We are committed to our channel partners, and we continue to work to drive more business through the channel. As such, associated investments in driving channel growth will increase [in 2013]."

The Printing and Personal Systems channel organization has been arranged so that it is able to cover more partners, and funding to distributors with dedicated support resources for SMB partners has been increased.

It is still uncertain how successful these moves will be but one partner, John Gunn of ISG Technology, stated: "I believe that HP has listened to partners and customers and no longer has its head in the sand." (CY) Link