Whitman: channel investments critical to HP’s success

HP CEO Meg Whitman told analysts this week the company's channel was intrinsic to its success but the vendor needed to focus on simplicity, consistency and profitability to harness partners' full potential.

Speaking at the company's first quarter results briefing, Whitman noted the important contribution of the channel in stabilising HP’s core server business in the last quarter. However, the company acknowledged some problems remain in other areas.

CFO Cathie Lesjak said, for instance, that while enterprise group, printers and PCs all delivered channel inventory within acceptable ranges, on the consumer side of the business, “...we ended channel inventory a bit higher than we would like.”

Whitman meanwhile told analysts, “our channel partners are critical to our success so we’re making significant investments to our channel program.”

She said the changes announced at the company’s global partner conference in Las Vegas last week were done “... to address what they want from us; a simplified compensation model, higher rebates or higher special designations, and new IT investment.”

Other channel bugbears which she said HP tackled related to the time provided to partners to use their marketing development funds, as well as simplified sales and technical certifications.

“In addition we’re rolling out a new platform to improve communication and joint business planning with our channel partners.”

Whitman also used the call to flag the Q2 release of the first commercial product from the company’s Project Moonshot which she described as a game changer.

“We expect this to truly revolutionise the economics of the data centre with an entirely new category of server that consumes up to 89 per cent less energy, 94 per cent less phase, and 63 per cent less costs than traditional x86 server environments. This is exactly the technological inflection that can fuel exponential growth of hyper-scale computing.”

“To put that in perspective, if just 10 large web services providers switch their traditional x86 servers to Moonshot, they could save a combined $120 million in energy operating expense and nearly one million metric tons of CO2 per year, the equivalent of taking over 180,000 cars of the road for the year.”

A full transcript of the analyst conference call is available from Seeking Alpha.