Months before Hewlett-Packard’s Global Partner Conference, which took place on 24-26 March in Las Vegas, chief executive Meg Whitman asked for the list of top partners who hadn’t yet confirmed they were attending. Soon after, she grabbed a conference room and spent three hours, starting at 6am, calling solution providers to personally invite them.
Later that same day, she was back on the phone, from 7pm to 9pm, dialling more names on her list. Making personal pleas to solution providers to attend a partner conference is a task most CEOs would pass on. But not Whitman, who found several partners on the other end of the line thinking it was a prank call. “No one hung up, but there were a few that were like, ‘I’m being had’,” chuckles Whitman.
The calls were no joke. Of the 80 partners Whitman personally called, about one-third committed to make the trip. “It was the personal touch,” she says. Whitman had also set up a contest with the members of her top executive team aimed at bringing more partners to the table as part of an all-out channel sales growth charge for 2014.
The tireless Whitman, who has been working 18 hours a day and regularly doing business meetings on weekends in non-stop turnaround mode, has been doing more than her fair share to move the channel sales needle. Over the past 12 months, she has met with more than 1,000 partners.
The former eBay CEO says she knew “in her bones” when she took the HP job that it would be partners that would power an HP turnaround. So she made the decision to personally oversee a complete overhaul of the company’s partner strategy and programs. Not only, she decided, did HP need to reinvest in product innovation to restore the company’s legacy as one of the crown jewels of Silicon Valley, it needed to reinvest in partners to restore HP’s rich partner heritage.
Whitman is driving what in HP parlance is called a ‘new style of IT’. With it comes a new style of IT partner. That has required investment of over $100 million in a sales transformation initiative that includes a single unified channel sales platform called Unison, based on Salesforce.com. It also required a companywide effort to put partners at the centre of everything HP – from product planning to sales and even a massive marketing overhaul aimed at letting partners leverage the $112 billion computer giant’s multibillion-dollar marketing muscle.
“There has to be a growth plan for every single one of our partners,” says Whitman, who reviews the business plan in Unison of every partner she meets with. “What market segments are you going to go after, what products, with what marketing campaigns, how are we going to collectively grow the business, down to a quite granular level. The devil is in the details.” Whitman’s hard work is beginning to pay off. So far, all of HP’s top-tier Platinum partners and 20 percent of Gold partners have business plans with the company. Solution providers that two years ago were shifting business away from HP to competitors such as Cisco and EMC are now building out rigorous business plans aimed at driving big gains in their HP sales and profits. The change in the partner conversation from fear, uncertainty and doubt to confidence regarding HP’s channel commitment and future has Whitman feeling good about the company’s progress, but not ready to declare victory.
The channel is now HP’s fastest growth route to market, making up 75 percent of HP’s sales. “It is growing faster than the rest of the business,” she says. “It is not fast enough for me. But it is growing faster.”
It is not insignificant that Whitman has used some of the lessons she learned in her unsuccessful run for governor of California to restore partner faith in HP. “In politics when you are explaining yourself, you are losing, and it is like that with the channel. But when you are talking about
how we are going to grow the business together and what the opportunities are, that is when you are winning. That is the big difference.”
Driving the channel
The next chapter in the HP story is a stepped-up pace of product and channel innovation. HP, in fact, is rolling out a number of major channel initiatives aimed at taking the turnaround to another level, including getting more partners on its Unison Salesforce.com platform; significantly increasing the number of partners bringing HP software and services to the market; and the launch of a new executive sponsorship program that requires all of HP’s senior vice presidents and vice presidents to oversee partner accounts, doing quarterly reviews and visiting those partner accounts on-site twice a year.
The Unison platform, the work of some 300 developers over 18 months, may well be the biggest game changer in creating a tighter alignment between HP and its partners. “No other company that connects with the channel has a collaborative platform like this,” says John Hinshaw, a former Boeing CIO who was Whitman’s first senior executive hire and is the driving force behind the Unison development effort.
Today, there are 50,000 partners with joint business plans on Unison collaborating with HP partner business managers and sales teams, sharing leads through the platform, using Salesforce.com Chatter to get questions answered and getting sped-up quotes on HP products.
In the second half of the year, Hinshaw, executive vice president of technology and operations, is promising what he calls the “holy grail” for partners: a compensation component that allows them to instantly see the bottom-line commission impact of any deal. Even without this, Unison has had a dramatic impact on solution provider satisfaction, with scores for those using Unison shooting up to as high as 88 percent from 60 percent before the platform. Unison is helping drive a channel renaissance for a company that was focused on cutting costs to make earnings and had clearly “lost its way with the channel,” says Hinshaw. That changed under Whitman, with HP investing two times more in channel sales tools versus direct sales tools. “You have to invest in order to grow in the sales channel,” says Hinshaw. “So we made those investments and they are paying off.”
Investing more in software and leveraging partners broadly to sell it is a critical piece of the next phase of the HP turnaround. George Kadifa, executive vice president, software, who oversees a team of 4,000 engineers and developers, says the company’s $600 million software research and development budget is on the rise. And so, he says, are investments in teaming with solution providers. The software move is not a niche play but, rather, a broad and deep partner strategy powered by a new generation of converged infrastructure software appliances such as the HP Converged System 300 for Vertica.
“We are trying for 100 percent coverage,” says Kadifa, adding that he is confident that the converged infrastructure appliance software strategy will kick the partner software quotient into high gear.
“We needed products where our partners could actually succeed, and not be a full change in personality for them,” he says.
To take that software strategy to the next level, Kadifa has brought on board former Oracle colleague Harry Gould as vice president of software, worldwide alliances and channels. Over the past year, Gould has been aggressively ramping the software partner push. HP software is now part and parcel of the HP PartnerOne channel program with software requirements to hit top-tier Platinum targets.
What’s more, just four months ago Gould rolled out new software subscription consumption models for managed service providers: the Cloud MSP and MSSP (Managed Security Service Provider) programs. “It is subscription-based so it is recurring revenue, and these partners are now embedding us into their managed service platform,” he says.
Walk in their shoes
The executive sponsorship program, meanwhile, began rolling out in December. About 150 senior executives already have partners, with another 250 senior executives in the process of teaming with partners.
The senior executives are rolling out detailed ‘heat maps’ that analyse where solution providers can increase sales and profits by targeting specific product areas or market segments.
“We are going to partners with market intelligence,” says Printing and Personal Systems senior vice president Jos Brenkel. “You can see if partners are missing out on the hottest parts of the market.”
Lynn Anderson, a senior vice president and chief of staff for HP who is part of the executive sponsorship program, says the program has changed the dynamic in HP by getting senior executives to walk in a partner’s shoes.
“We are sitting across the desk from the partner, understanding the challenges and adding value,” she says. “You come back to HP with a very different view about the life of a partner.”
Whitman’s leadership has led to a striking difference in how HP approaches partnering with the channel versus competitors, according to Anderson. “Our competitors say, ‘Here is how you can go deliver value as a partner,’ ” she says. “At HP, we believe we have shifted to the power of ‘we’, and together HP and its partners are going to drive growth.”
Lightning speed
It is that kind of sales alignment that has partners looking back at the chaos that engulfed HP when Whitman took the helm as a distant memory. Mike Strohl, who for the past 20 years has chartered the IT landscape as CEO of California-based Entisys Solutions, says he has simply never seen the kind of channel turnaround that Whitman has engineered in such a short period of time.
He credits Whitman for going beyond the traditional CEO channel rhetoric and instilling a deep-seated change in the sales trenches. “We are light years away from where we were,” says Strohl.
“It’s like night and day. The partnership doesn’t feel like the traditional reseller-vendor partnership. We are going to market with HP with our interests aligned.”
That alignment is driving big sales growth for Entisys, whose HP business went from US$12 million in 2012 to US$33 million in 2013, with profits up 60 percent based on the PartnerOne program changes. Strohl says this is a period of unprecedented HP sales growth for Entisys. He sees the company’s HP business growing to as high as $50 million in 2014 with another 50 percent rise in his profitability based on PartnerOne changes.
Team building
The changing partner conversation is in no small part due to the sense that the HP culture has changed under Whitman from a group of siloed business units pitted against one another to a single, unified HP. The new HP fiscal year that began 1 November marks the first time Whitman has the advantage of a new unified channel program backed up by her own handpicked executive management team. In June, Whitman named Dion Weisler executive vice president of Printing and Personal Systems and then two months later named former COO Bill Veghte as executive vice president of the Enterprise Group.
Veghte says Whitman has focused the team on the opportunity in the market and made it fun to work at HP. “We have a lot of work still to do but the cycle of courage and confidence is there now,” he says.
His message to the market is this: “We have a vision, we have innovation, we have a really strong leadership team, and we are moving with tenacity and courage. Bet against us at your own risk. Bet with us for growth.”
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