IN THE HOT SEAT: Keeping the channel in tune

IN THE HOT SEAT: Keeping the channel in tune

At night he plays bass in an original rhythm and blues band, while by day he manages the HP channel. He would love to jam with Eric Clapton and wouldn't turn down the CEO's role if it was offered to him. He is HP's Solutions Partner Organisation (SPO) director, Martin Dare.

What's your background?
Martin Dare (MD): I've been in IT for 25 years and have a technical background. I did software development and systems implementation here and in the US for 15 years, and became the systems manager for Merrill Lynch in New York. I got into sales through that and ended up at HP in December 2000 as branch manager for NSW. When an opportunity to run the channel nationally came up in May last year I not only had some channel experience but had formed relationships with some of our major partners too.

How does that background help in your current role?
MD: Having those channel relationships really helped as I was able to go out and ask our direct and indirect partners what I should be focusing on. They said three things - growth, profitability and satisfaction. We were looking at those things before but not in an organised way. Everything I've done this past year has been around organising the resources HP can offer in those areas. When you have a channel as big as ours - it does $9000 a minute - you have to make sure you are focused on your partners.

Can you give some details on those initiatives?
MD: They have been focused around encouraging and rewarding partners for looking at areas they haven't traditionally done - acquiring new customers or expanding the HP portfolio with their current customers. There is also the HP Rewards Program, which helps across profitability, satisfaction and growth. To try and help with profitability, we have ramped up certification so that more of the channel can offer value products like storage, Unix, Linux and Proliant servers. We have seen an explosion of those value products sales in the last six months as a result.

Why is the market wanting value rather than volume products?
MD: Consolidation continues to be a cost-saving measure and IT departments are making their own decisions on how they upgrade storage. We saw the PC refresh last year and now it is time to go back and look at the backend infrastructure. I would speculate that value sales are from companies now looking to refresh strategic areas of infrastructure. In June last year we also formed a special team with the channels organisation, which focused on supporting and driving value products for our partner network - the Partner Solutions Group.

How are HP's Rules of Engagement on direct and channel sales coming along?
MD: We released them six weeks ago at the Partner Principal Forum. Partners understand we are committed to a hybrid model but they want to know where HP is going direct and the Rules of Engagement help the channel predict where we are going. We have an account list that we share with our partners to avoid conflict. Above and beyond that, it is market forces which dictate where we go. Dell and some of IBM's activities promote the benefits of a direct sale so we need to respond to that.

HP can't compete with a channel offer against a direct one?
MD: In many instances we are able to demonstrate the additional value a channel partner can bring - that's what the Solutions Partner Organisation is all about. When required we can go in with the channel partner and that's often enough to satisfy a customer. It's typically the very large companies who are looking for the direct relationship and the significant price breaks it can bring. PC hardware becoming commodified alone is not justification for our direct strategy - it's also part of establishing a deeper relationship with a customer. Many times the direct strategy is a natural outflow of a customer who has always bought very large infrastructure and sets of services from us and who wants to integrate us better into their value chain. They want the extra confidence to say they can reach into HP pockets if necessary.

So resellers should keep an eye on this Rules Of Engagement document?
MD: Yes, although the channel sales force we have works with channel partners and every six months it puts in place an action plan which articulates the strategy for each product and service we offer. Within that is a set of measurement and monitoring criteria as well as the focuses we will use that half-year. Essentially, HP is looking at forming deep relationships with the top end of town - it's not interested in going direct for the sake of it. Of the thousands of accounts which are out there almost all of them are channel-led.

Has HP had any good bids for its PC division lately?
MD: None that we have accepted.

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