In a year of significant product releases and evolving technology trends for Hewlett Packard, the channel chief of HP Canada (NYSE: HPQ) says the channel highlight of 2008 may well have been the significant growth the vendor experiences in its Canadian channel.
While the year-end numbers are still being crunched, Dave Frederickson says HP Canada paid out 30 per cent more through its Partner One program than in 2007, and drove some excellent results as the vendor worked closely with partners to help them build their competencies in key technology and business areas.
HP grew the size of its partner business by 15 per cent in 2008, says Frederickson, with impressive growth in Canada as well. He also credits the channel for driving a number of key milestones for the vendor during the year.
“We took number one market share in the PC business, and our partners were fundamental in achieving that,” said Frederickson. “We had a terrific year in our blade server business with greater than 50 per cent growth, and maintained our number one share throughout the year on the industry standard server and blade side.”
In the storage arena, Frederickson says HP had two “very significant” releases that had some great success in 2008, with the EVA 4400 and its new MSA products.
“Those really hit the sweet spot in terms of customers looking for SAN solutions at a very effective price point and ease of implementation in huge volumes,” said Frederickson.
He credits the movement to virtualization in 2008 for driving the significant growth HP saw in the blade arena, and being a strong factor in HP’s overall success.
Frederickson cautions, however, that particularly in the second half, HP has begun to see a slowdown in terms of the overall volume of business in the marketplace.
Perhaps the biggest move by HP this year came in May, with its US$13.9 billion acquisition of IT services player EDS Corp., which has seen HP fold its own services business into EDS, with the unit being led by EDS CEO Ron Rittenmeyer. HP’s services practice is designed to be complimentary to its channel partners, and HP president and CEO Mark Hurd said in a conference call announcement in May that the channel focus wouldn’t be changing with this acquisition. “It’s good for HP, so I think it’s going to be good for our channel partners,” said Hurd. “Our commitment to channel partners is in the very DNA of the company. I don’t think there’s going to be anything but goodness (for the channel).”
The integration of EDS proceeded ahead of schedule, and Frederickson says from his perspective there hasn’t been a whole lot of effect on HP’s partner community. EDS is very focused with a select number of very large customers, particularly in the government space, and he says wherever partners had an engagement with EDS that relationship has continued.
“In terms of partners repackaging or reselling EDS services and making them available through the channel we haven’t gotten to that yet, but look for that in 2009,” said Frederickson. “But there’s been very little to none in terms of channel conflict, as they’re in different spaces and have different offerings than the majority of our partners.”
Building on the success HP achieved with its partners in 2008, the year ahead looks to be a busy one as well. At HP Canada’s executive partner event in September it announced a series of reforms to its Partner One partner program. The changes began to roll-out in November, but Frederickson says the bulk will come in 2009.
New to the program will be the Elite and Preferred Partner designations. Both these designations will be based on channel partner competencies, which is an area HP is interested in building more of in its channel network.
In Elite, HP is trying to get customers to recognize the value of an Elite channel partner. For example, if a customer is looking for a virtualization solution, they can write into an RFP that they will only accept Elite virtualization partners.
“This is the next evolution of our partner program,” says Frederickson. “The key is the Elite program, and the specialties, such as virtualization. What we want it to mean from a business and partner perspective is to ensure partners have that level of competency.”
The next key element in reforming Partner One, says Frederickson, is to ensure that the program offers benefits that are tangible and real for smaller partners. Improving the effectiveness of the program for smaller partners is a priority for HP in 2009, says Fredrickson, particularly as the vendor looks to grow in geographies were it needs better coverage.
“We’re going to be focusing in investment and reinvestment to take advantage of the small partner space, where we feel we could have been doing a better job building-up that ecosystem,” said Frederickson.
Earlier this week, HP Canada announced Dave Frederickson will be leaving his post as the company’s channel chief to pursue a new opportunity within the organization. Taking his place, will be Greg Chappell, HP’s current vice-president of Enterprise Storage and Servers Group (ESS). Frederickson and Chappell will be switching roles because Frederickson said he was “looking for an opportunity to get involved in the profit and loss and deep-strategy side in product technology, while still working closely with partners and developing relationships with end-customers.”
The leadership transition is currently in place and is expected to be completed sometime early next year.
