Hewlett-Packard is embracing the channel again, this time putting an elite six enterprise-focused resellers on a pedestal and showering them with marketing and staff training assistance in return for clear commitments to flog its wares.
The half dozen selected integrators are set to benefit significantly from bypassing distributors, dealing direct with the vendor and receiving preferential treatment from HP's enterprise division direct sales team.
The move is a clear manifestation of a new understanding at HP of the crucial role its integration partners have to play in growing its local enterprise computing sales organisation (ECSO).
In announcing the six systems integrators to be molly-coddled under its Channel 2000 program, launched late last year, HP claimed 40 per cent of its ECSO revenues are now generated by channel partners. Channel 2000 was developed to boost that figure even further.
The six resellers successfully meeting HP's strict volume and accreditation criteria are Leading Solutions, Vigil Tech, Netbridge, Centari Systems, Avnet Integrand and Tripoint. The latter two are brand new partners to HP under this program.
While the chosen resellers are set to benefit from improved marketing and sales support, the program does make it difficult for other potential HP resellers who aspire to enter this space.
The direct relationships Channel 2000 partners have with HP means significant differentiation and value add will have to be generated by those excluded to get a look in because of the margin difference on hardware.
David Lenz, national marketing manager of HP ECSO, said that six is the right number to get good geo-graphical coverage and the right mix of specialty companies. There will be monthly reviews, he said, and the door has not been totally shut on future expansion.
Colin McKenna, managing director of Avnet Integrand, which is perhaps best known as one of Compaq's top shelf resellers, claims to be `already doing well' out of HP enterprise sales. He denied this was `cannibalising' existing Compaq business.
`We have created an HP division,' McKenna said. `Like the Compaq group, it is focused on being a fully functional solutions integrator. We saw it as a growth opportunity. Our new HP group should be rivalling our Compaq sales in a couple of years.
`The key difference is that HP has just six partners, which we find encouraging. Compaq has so many more.'
Glynn Mitchell, Leading Solutions' national manager, connected systems group, pointed to increased `credibility' being an official partner offers to the marketing focus.
`Having a direct relationship with HP is a significant development for our Unix group,' Mitchell said. `There are big advantages for us in being tagged as an HP partner and it certainly means we can work a lot closer with the HP enterprise team without worrying about losing deals.
`Our enterprise people have been dealing through distributors in the past and we have now set aggressive targets for the [Unix] group as a result of the closer working relationship with HP.'
Over at Netbridge, the systems integration arm of AAG Technology Services, around 50 per cent of its `gross profit' was generated around HP-based enterprise solutions prior to Channel 2000 according to its general manager, David Evans.
`We have the proven skills and will now be investing more in the HP solutions which are helping us to push towards more services,' Evans said.
Peter Robinson, managing director of Vigil Tech, claimed that 100 per cent of that business was committed to HP-centric solutions. He said the vendor has not always been easy to do business with in this space but that the Channel 2000 program certainly changes that.
`Having been an HP partner since 1993, they have had their periods where they were not committed to he channel,' Robinson said. `In the past, we have come up against HP in the market occasionally but not any more. There is a much clearer understanding from HP's direct sales force about the role we play in the market.'
Robinson said that the addition of new partners presented the possibility of increased competition, but thought the companies had been carefully selected. `We should be able to co-exist as we tend to move in different circles,' he added.
Naturally, HP was positively beaming about the quality of partners it managed to attract and is expecting its enterprise group to show significant growth in the next 12 months on the back of e-commerce and ASP technologies.
`Channel partners will play a crucial role in that growth,' Lenz said, adding it is they who have `close relationships' with many of the customers currently adopting enterprise-class technologies.
Lenz said Unix-based servers being deployed for ERP and CRM initiatives at the backbone of e-business functionality is driving growth from an increasingly broad range of customers. Other network rollout and storage solutions also contribute to revenues, he said.
Lenz openly acknowledges that embracing the channel is crucial to HP successfully competing against the likes of Sun and IBM in the enterprise space.
`We are seeing a more educated customer and, by default, that means they understand they often need integration partners,' he said. `Customers are looking for complete solutions and as true solutions integrators, these partners can add a lot more to the sales cycle than a Sun salesman who is simply selling a box.
`Channel companies have been attracting a high level of staff and have exceptional skills because they are getting in early. We want to facilitate that.
`They are getting the opportunity to market themselves as an official HP partner and we now view them as an extension of our sales office.'