Five Steps To Fix HP's Channel Woes

Five Steps To Fix HP's Channel Woes

Some of Hewlett-Packard's exclusive partners say the vendor's flagship Attach Plus rebate program is fraught with sales data reporting errors that often dramatically understate their own sales numbers. The upshot is that many of HP's best and brightest solution providers can't track, can't predict and sometimes are missing out on rebates. That dilemma, coupled with gaps in HP's storage lineup, has some HP exclusive partners exploring new relationships with competing vendors. Here are five steps partners say HP can take to fix the problem.

1.Get the numbers right.
As unbelievable as it seems, some HP solution providers say that their own internal sales-out data rarely match the vendor's numbers. And some say the numbers are sometimes off by a mile. Since a huge chunk of partner profitability hinges on HP's complex PartnerOne rebate formulas, HP should fix this quickly.

2. Get rid of look-back growth goals.
The way it's structured now, Growth Accelerator rebates are contingent upon hitting specific growth goals. But if a solution provider has one blowout year or one great quarter, that means it's likely to miss out on growth rebates the following year unless it can hit a home run every time. A solution: Pay rebates on sales volumes and partner growth and profitability will follow.

3. Beef up storage.
HP partners say that NetApp and EMC consistently beat HP in competitive situations. Many HP-only partners say their storage business is flat or showing anemic growth and, as a result, they are forced to explore partnerships with rival storage vendors if they want to stay in the game. HP and Hurd say storage is a top priority for 2008. The vendor better fix this quickly or it could face mass solution provider defections to rival storage vendors.

4. Double down on your most loyal partners.
It's been more than a year since Hurd promised to do just that. But some exclusive HP partners—those that have bet their companies on ties with the vendor—say they are still waiting to see benefits. They say Hurd's lieutenants don't seem to be getting the message that HP-only partners are part of the family and that they aren't getting leads from the field, don't get the help they need in closing deals and the promised big payouts in rebate money are mired in technical difficulties. Many of HP's most loyal partners are now asking, "What are the benefits in being HP-exclusive?" HP should answer that question decisively before the double-down bet is lost.

5. Get to know your best solution providers.
The perception among HP's most loyal partners is that HP executives too often don't speak to the people who fight their wars on a daily basis. For vendors, loyalty has to be more than just a partner program. HP is the new IT industry revenue leader. If it wants to stay on top, it needs to know how business is conducted at the street level. As one solution provider noted, "HP people move at a glacial pace in an industry that requires you to turn on a dime."