Jesse Chavez is vice president of worldwide channel sales and alliances in Hewlett-Packard's Enterprise Group. Dan Tindall is vice president of worldwide channel sales in HP's Printing and Personal Systems Group. Both groups came into being last year in conjunction with a consolidation initiative aimed at simplifying the company's reporting structure and partnering processes. In these excerpts from a conversation with ChannelPro-SMB recorded shortly before president and CEO Meg Whitman's keynote speech at HP's recent Global Partner Conference, Chavez and Tindall discuss what partners are saying about the new organization specifically and HP generally in the wake of its recent turmoil.
Q: HP has changed the way partners interact with the company recently. So for a typical SMB partner, how did it work before and how does it work now? Do they interact with both organizations?
Tindall: Yes, but only both of our organizations. So like in PPS it used to be [two groups], the personal systems group and the imaging and printing group. And that came together into PPS.
Chavez: And in the Enterprise Group we had ESSN - enterprise storage, server, and networking - and we had a separate organization on technical services and then global accounts. So we combined that into the Enterprise Group. So where there was multiple interfaces into those five different organizations we now really have a worldwide perspective, two people that the partners can interface with on a worldwide basis.
Q: What kind of feedback are you getting so far about the new structure?
Chavez: A lot of this is new to them to a certain extent, right? But I think that overall what we've been getting is that it's been positive that we are simplifying the organization. And through that simplification we've now been able to add the capability of simplifying our programs…So far, from a partner perspective, PPS and EG, we've been getting a lot of positive feedback.
Q: I don't want to steal Meg Whitman's thunder, but there are some partner program-related announcements coming up during the keynote having to do with how and when partners get paid. Can you talk at all about that?
Tindall: So the main announcement is effective May 1st…partners get paid from first unit sold. There's no longer what we called gated compensation…They had to [exceed] some number to go through a gate and then retroactively they could get comped on what they had sold. This caused a certain amount of unpredictability to a partner because the partner's sometimes not quite sure will I make it through the gate or not? And there winds up being a lot of kind of back and forth between HP and the partner. And we just said, you know what, let's simplify this. Let's remove that gate.
And then secondly, we had earning caps in place in some of our businesses that said you could earn up to X and you could not earn more than X. And we removed that as well. So it's again trying to drive predictability in the compensation model.
Q: Is your SMB channel growing, shrinking, holding steady? What's the general health of your SMB channel?
Tindall: I'd say the health is pretty good. I'm not sure that it's something that's growing faster than market or anything like this, but I think all in all the channel is good.
Chavez: I'd say it's stable.
Q: If you were to give an SMB reseller their marching orders coming out of this conference on what to focus on over the next 12 months, what might they be?
Tindall: I would say it depends a little bit on what it is that they offer from us. I think that we do have some channel-focused products that we'll be talking about, and EG does [too]. In PPS, for example, we have a new printer for the SMB. It's an inkjet printer. We haven't historically sold inkjet into the SMB. This is the Officejet Pro X. We think it's an awesome printer for SMBs and so we would very much want them to focus on that. The way that model works, I think people know, is it creates quite a nice profit stream down the road in ink refills and things like this.
Chavez: What we're doing is, from a storage perspective as an example…we're bundling storage that's really more midrange and putting our software stack [in] to be able to back up easily…So you're going to see us be a lot more deliberate about offering products in that way to make it easier for our SMB partners to sell into the marketplace.