At its Global Partner Conference in Las Vegas last week, HP made some of its most comprehensive announcements around its partner programme in years – and the message has never been clearer: The more partners invest in HP, the more rewards they will reap.
Among the more sweeping changes the company revealed at the conference was that partners would no longer have to adhere to quarterly or annual targets, caps and gates, an announcement that was greeted by spontaneous applause from the almost 3 000 delegates. And while there were a couple of sceptics within the audience, the majority agreed that this was one of the most significant statements HP has ever made to its partner community.
The decision to remove targets, caps and gates may be a temporary one and could be reviewed in the future. But HP obviously realises that tough times call for tough decisions – and there is no doubt it is a welcome one in the prevailing economic climate.
Alessandra Brambilla, vice-president channel partners and SMB, HP Enterprise Group EMEA, says the company understands the difficulties being faced by partners in the current recessionary market and that the announcements are aimed at easing some of the burden on them.
“For the first time, all of HP is under one umbrella in terms of its partner programme and under one compensation model for all its products,” Brambilla says. “And for our partners it is a big message in terms of simplification.
“By removing targets, gates and caps, we are also showing partners that we understand the difficulties they are facing,” she adds. “Today’s market is very unstable and difficult to predict, therefore, removing targets makes things a little easier. It also ensures that our partners have the opportunity to make money from the first dollar. These are very channel-friendly announcements that we have made.”
HP is also enticing partners towards more specialisation with bigger incentives on offer for those partners who invest in more competencies.
“We will have more differentiation between our partners based on their levels of competency,” Brambilla explains. “So, if a partner takes advantage of the converged infrastructure opportunities that we are offering, they will gain a lot more than a partner that has only ‘professional’ status.
“It’s a case of the more a partner invests in HP, the more they will be rewarded,” she says.
In an industry that has become renowned as “just a numbers game”, some would question whether a world without unit targets or caps would be sustainable. But Brambilla has little doubt that the new model is sustainable.
“We have done all the financials and we think the model is sustainable,” she says. “It’s no longer just a numbers game and we have moved from a tactical approach to a more strategic approach. [Converged infrastructure] is technology we want to develop and drive, we want to invest in these areas, and the more you invest, the more we will reward you for this investment. This is the message we are now delivering to our partners.”
Brambilla says that HP’s distributors have not been forgotten in the new strategy the company is adopting.
“In parallel, we are working with our distributors and moving their compensation model to sell-out instead of sell-in,” she says. “We want to centralise our distribution not by increasing inventory, but by pushing product into the market. By removing targets, gates and caps for them, they have more leeway.
“With this transformation, distributors can now focus more on the market instead of inventory,” she adds. “It makes things much leaner – and more predictable too.
Brambilla says the new partner model will stand the company in good stead in the future.
“We have really been listening to what our partners are saying to us: To be successful they need to grow and grow – but in a profitable way,” she says. “We’re listening to and addressing their issues, and there is a strong commitment to our partners across the whole company – from Meg [Whitman, CEO] to all of us in the field.”