HP: Keeping the value proposition simple

HP: Keeping the value proposition simple

Regional storage and servers boss, Adrian Jones, talks to ARN about channel evolution, cloud computing, and what HP has planned this year

HP's Adrian Jones

HP's Adrian Jones

HP Asia-Pacific vice-president of Enterprise, Storage, Servers and Networking (ESSN), Adrian Jones, has a long history in global channels with Quantum, McData and HP. He has also flagged a strong commitment to driving business through partners in his latest role.

Jones was in Sydney this month to catch up with local partners and spoke to NADIA CAMERON about the changing channel landscape, cloud computing and the vendor’s plans for 2010.

Have you seen the role of the channel change over your years in the IT industry?

Adrian Jones (AJ): For more than 10 years, the channel has evolved, but I don’t think the fundamentals have changed that much. People and companies change, organisations consolidate, the industry gets buzzwords around virtualisation or solutions, and we have moved from selling point products. When I started at Quantum many years ago, we would just ship container loads of disk drives to distribution to resellers and it was all point focused – so whether it was 52GB, which was all the rage back then. Now, we put a solution together for the datacentre using hardware and software products. I think partners have evolved to be more value-add, rather than fulfilment, in many ways. There are still some partners doing more fulfilment than value-add, and certainly during my time running HP’s Americas channel, it was about how we drive partners to add more value by looking at the competency levels they bring to the table, versus just product certifications. I think the industry is still getting to that stage – even a company as old as HP, which has been in the channel for over 30 years, we’re still learning about things we should differently.

We’re humble about the fact that we have a list of things where we screwed up and need to fix things. At the same time, we want guidance from partners about strategically where we should place our bets and help them grow their business. We are trying to do as much as we can to listen to partners. I think a lot of vendors say that, but I think HP executes more around the listening part than most, and from our CEO all the way down, we’re out there listening because partners represent a huge percentage of our business. We have 144,000 channel partners worldwide today.

The channel has evolved because we have evolved certain areas of the channel to focus on specific areas. I’d say we’ve been more surgical in recent years about where we’ve wanted to drive business, versus just recruitment of partners. We have gone from just having product certified partners, to how they add value – whether it’s data protection, security or virtualisation. We want both sides to grow profitably.

Is that newer approach being driven by market maturity generally, or by specific technologies?

AJ: Pieces of it are maturity of the market, but I think HP is also driving partners that way. I don’t think every company out there is trying to drive partners that way – I think they use partner for coverage and influencing, but they’re very product focused. It takes time. I think partners are also shifting that way as they realise they have to add more value. For us, it’s about getting a total customer experience.

What do you see as the biggest hurdles for channel partners today?

AJ: : There are two things. First of all, the effect of coming off the back of 2009, which everyone wants to forget. We as a company, did okay in 2009, but we want to do better in 2010. In Australia specifically, there are partners that haven’t made it through and those that have changed, and I still think we will see more consolidation over time. In the US, we didn’t actually see that many partners go under, partly because the credit situation is managed differently there versus here. Distributors managed the credit differently in the US, as they utilised working capital differently and managed to stay afloat. Whether the distributors here were not utilising their working capital to help resellers or not, I’m not sure. We helped with that too – we had a program to help drive credit to those smaller resellers and help keep them alive. And I think it worked. In 2010, they will still be adapting. It will be a better year, but I can’t tell you if we’re going to see organisations dramatically changing their businesses.

Secondly, consolidation is inevitable – whether you’re in the channel or HP. We did 38 acquisitions in four years and spent $US20 million on it. Are we going to do more? Yes. We acquired 3Com a few months ago and we’re now looking at how we strengthen our portfolio and how to gain more avenues to market, and how our channel partners play a role in those new markets.

Is the competency work you’re doing based more on sales or technology solutions?

AJ: For us, it’s more selling a solution and how we get these guys not to just take a product. They can add more value sometimes than an HP employee can – whether it’s other vendors in their portfolio or skills. And they get a better rate for attaching more products to the sale and selling a broader portfolio of HP products. In this region, we haven’t moved towards the full competency model, but over time, we will and we will pay partners on the value they bring to the deal and certification they have.

Do you see more partnering between partners?

AJ: I think that can happen. In the US when I left [in October] there were discussions about peer-to-peer ecosystems based around how partners can not leverage technology skills from each other as much as leveraging information for certain accounts or deals. For example, it could be something they sold into high-end computing, or something HP can do that another partner didn’t know about. We are looking at building that peer-to-peer ecosystem in the US to aid with information. I think partners are somewhat reluctant to sit in a room and brainstorm each other for ideas. But in the same way social networking has arisen, I think peer-to-peer networking could happen.

Should vendors be responsible for that?

AJ: I think HP proactively has to play a role and we’ve started that in the US through pilots. I don’t think we’ve proven if it’s valuable enough yet, but if it is, we’ll extend it out to other places.

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