John Bieske is one of Australia's channel veterans, having looked after Hewlett-Packard's channel operation for the last 10 years. He first joined HP 29 years ago as an electronic engineer, but at the end of last year decided to pull up stumps and retire. In his last interview at Hewlett-Packard, Bieske spoke to ARN editor Philip Sim about the changes he has seen in the channel, and the changes he sees coming.
ARN: What have been some of the bigger changes you've seen?
Bieske: The growth of the channel has been amazing and the amount of business that is now going through it is sensational.
The channel is very much segmented these days. Instead of being one size fits all, it's been rapidly changing. We now have corporate resellers, wholesalers, supply specialists, resellers, mass merchants, retailers, workgroup partners and so on.
Are resellers providing the right services to customers?
Resellers have had to determine what business they are really in. It used to be mainly traditional box moving, then it became value-add within that and now it's in the services arena. And they have had to segment different parts of the business, according to whether it is based on high value-add or whether it's simply pushing boxes.
They have had to figure out what are the businesses they are operating in and align the costs in each one, because there are different profit models.
How well positioned is the channel today?
I think it's pretty well positioned. Clearly, from my point of view, our customers want to deal with a reseller. If you look at some of the direct models, they're nearly getting 20 per cent of their revenue through the channel and it is growing. So the channel has a lot to offer an end-user customer. Hewlett-Packard has always been and will con-tinue to be a huge supporter of the channel.
Where do you see things moving over, say, the next three years?
We are moving into interesting times, particularly with the Merced roll out. That's going to generate rapid change. Companies are going to have to be very agile to take advantage of these changes that come along, but there are certainly great opportunities there for the channel.
To take advantage of them, it just has to con-tinue along the lines it's got at present. There are small, medium and large resellers who are very well placed to take advantage of being able to offer higher value-added content that is capable of winning business in the top couple of hundred accounts.
There are also some very good niche players in the channel who know their business and are focused on it.
How well do you feel Hewlett-Packard has its bases covered?
I think we've got all our bases covered. We have the channel very well segmented, but we'll have to watch trends arising from Europe and the US and be very plugged in. Perhaps then we can anticipate and be agile enough to take advantage of new opportunities.
How do you think HP is positioned compared to your main competitors, IBM and Compaq?
IBM is always a strong competitor, but I think we've got a better model with all the different segments we're focused on.
Compaq seems to be saying some confusing things at the moment in regard to their direct strategy. They're playing into HP's hands, because the channel isn't going to go away. It is going to be reinforced and will only become more important in the future.
Lew Platt [HP's CEO] also made some remarks which could have been seen as intimating a direct strategy, though.
There will always be a number of accounts that want to deal directly with a vendor. But for us nothing is changing. We've worked with corporates through our corporate account reps - either alone or with a reseller. Some want to work with a reseller, some the vendor, but in the end the business has always gone back through the channel. We've worked that way all along. This is just an endorsement for large end-user corporate accounts. We want to have more people out there dealing directly with large accounts, but who are also still very plugged in to the channel.
What advice do you have for the channel?
Again, it needs to understand the business, understand exactly what the business is that it's playing in and align the skills and costs of its people to match that. Most likely, it'll be in multiple businesses, so it's important to understand each of them.
It's also very important for the future of the channel that it gets even closer with its suppliers and understands the supplier's business. Suppliers like HP are relying more and more on resellers, so it's important to leverage that alliance.
Does that mean exclusive arrangements?
I don't think so. You have to keep your options open. I think this business is evolving and changing so rapidly that you can't lock yourself up.
So why have you decided it's time to move on?
I'm taking retirement at an age where I can still do something and put something back into the channel. I'll be seeking some consultancy roles over the next several years.
I've been in the business and I think it will be exciting to help channel partners be successful in the future, because they're going to be challenged right, left and centre.
Hopefully I've got something to contribute to those that need that expertise.