ROUND TABLE The new look HP
- 17 June, 1998 13:52
In the second part of our Hewlett-Packard round table (see ARN, May 27, page 55), ARN's Cameron Tomes and Paul Zucker look at how HP is perceived by its resellers and users. HPers present included John Bieske, general manager, computer channels organisation; Norry McAllister, general manager, enterprise accounts organisation; Chris Grieg, sales and marketing manager, computer channels organisation; Rebekah O'Flaherty, marketing manager, computer channels organisation, and Mike Shove, general manager, Alliances, marketing and operations, GE Capital IT SolutionsARN: It's easy for vendors to announce that they've reinvented themselves and their relationship with the channel. What does it mean to Hewlett-Packard's larger resellers?
John Bieske: What's of real benefit to our enterprise accounts is the alignment of our channels back to delivering the right solution for the customer. That's using or working with the channel partner to supply their expertise for Hewlett-Packard to win that business.
At Hewlett-Packard, we've got to build on that as a clear strength. We've got what some of our competitors are trying to create now. With the direct account focus of our enterprise team on some very focused accounts, working with companies like GE Capital, that advantages our channel.
So how does the enterprise team work with the channel?
What makes that sector unique?
McAllister: When you think of the channel, you think of a homogenous thing, yet there are different parts of the channel that do different things.
At one end you just get product to the market, to supply the demand which is created by the market, and to cover very high volume, low value where you just need to get it there.
At the other end you don't need that sort of channel because the volume is too low to need somebody to just do the logistics. At that level you need to give the customer a broader service. We complement each other by giving a wide coverage in the customer space, both in terms of the more people the customer sees, but also a wider scope of offerings.
There are all sorts of integration services and bits and pieces of other software vendors that need to be pulled together to provide a complete offering so when we're talking to someone like GE Capital about doing that, it's "which customers are we going to target together" and "which specific areas are we going to target in terms of data warehousing" or whatever in terms of supply and so on.
Another thing we discuss is an added value simply in helping the account management because when you're talking to the big customers in Australia, there are literally hundreds of people who want to be touched, who want to be spoken to, and want to know more about what's going on so the more people that we have there covering that, the better the customer service we can provide.
Hewlett-Packard couldn't possibly do that directly as Hewlett-Packard, so we have to do that in conjunction with people like GE Capital who will specialise in doing that sort of coverage.
On the other side, what does GE Capital need from Hewlett-Packard?
Shove: What we're seeing is that we now share the account list. Historically it was "these are our customers and we're not going to tell you" but now it's "here's what we're working on" and we put them on the table.
We'll tell each other what we're going to focus on and then hopefully we have a customer match. What's great is, we become an extension of their sales team so our account manager can sit in an account meeting with all these people and say, "how do we approach this customer", and HP is working at the CEO, CIO level and we're working at this level and the next month, we get together and say, "what did you do", and it's an interesting challenge for HP.
They've got to almost manage our sales people even though they don't own them. They work for us, and it shows a level of maturity in both organisations to have that trust and confidence to share all this historically confidential information. Other vendors talk about it but we can see a real situation here where this is working.
So why do you say your people become an extension of their sales team instead of them becoming an extension of your sales team?
Shove: It really becomes one sales team.
McAllister: The big thing is having a single account plan. We were never big on account plans before, but now for all the customers we work with we have an account plan and that will include who the partners are that we're working with. They'll be party to that account plan and we also share that plan with the customer.
Shove: Because we've got to add more value. We can't survive dropping boxes, at single digit margins.
So do you draw the line at HP getting involved in a program at the CIO, CEO level or will your ego permit them getting down into, say, talking to the network manager, the guy that actually sits there and does the hands-on work. Would you have HP at that level because when you're talking CEOs and CIOs you're talking desk-bound people who are only signing the cheques?
Shove: What we're finding is that both organisations have to work up and down the company. We're not finding HP saying we can't go and talk to the CIO, and we don't tell HP they can't talk to the guy that bolts it together. We help each other, talking to both sets. We have to.
McAllister: Yes, you really have to park your egos at the door to do this type of account planning.
Every indication we hear from the big users is that the short lists are getting shorter and that CIO and CEOs are getting involved and are saying "we want a company that will partner with us, share the vision". There are a lot of words that get thrown around, like customer service, but what does it boil down to? They're betting their business on you, and some of the decisions they're making won't impact for perhaps a couple of years, so what type of demands are they putting on you?
Shove: Well, they're looking for that low risk partner to work with. They need someone who's going to be there long term. The plus for GE Capital is that clearly we're an organisation that'll be there 10 years down the road. But it's helping to understand their issues and make that level of commitment with them.
And so do you have access to experts say in banking and insurance who really understand the business?
Shove: The critical mass isn't here (in Australia) to be able to have that level of expertise. No we're not going to claim that we've got all of that, so that's where Hewlett-Packard comes in.
So partnering isn't just a matter of going in, shaking hands and saying X boxes are going to arrive?
Shove: It could be a two-, three-, four-way partnership. It could be the SAP appli-cation combined with HP hardware, and our inte- gration skills to bring it together. That's what the customer is buying. He needs a number of people at the table.
So you're bringing in the layers?
McAllister: What he (Shove) said is absolutely right and it's one of the reasons that we've restructured the way we have. I run the enterprise organisation in Australia/New Zealand and that organisation was put together specifi-cally to address what he's just said. Nothing else! Since taking that position I've met many of the CIOs across the country and all of them say: "I need someone to partner with me, not just sell to me." And I've put the organisation in place to do specifically that.
Organisations are no longer putting together IT plans, they are putting together business plans that incorporate IT. They got burned back in the '70s and '80s putting in these massive multimillion dollar implementations, but couldn't see the benefits.
McAllister: Yes, so for instance, when we deal with the banks, they expect us to put people in who understand banking. So I have a number of people who work in banking, as well as the sales people. If we were working with GE in a bank, we would provide the industry expertise, professional services that would go round it and they would provide the expertise at the technology and infrastructure level. Again, we need to be providing a broad business plan and the banks are among the most demanding. They say: "I want you to partner with me, I want you to understand where I'm going, I want you to share some risk." Now we don't do that so that we can be nice, we do that because we know that's where the revenues are going to come from and that if we don't do that the revenues are going to go to somebody else.