HP wants the channel to ride an SMB wave
Hewlett Packard (NYSE: HPQ) used the opening day of its Americas partner conference to pledge a new approach and commitment to the small and medium-sized business market (SMB), to become an easier company for partners to do business with, and to take more market share from rival Dell or, as it's known around here, "our friends from Texas."
Taking the stage just a few months after joining HP as vice-president and general manager, Americas solutions partner organization, Stephen Di Franco announced three specific initiatives: an expansion of the HP SMB Elite program (much of which is already in place in Canada), the creation of a Healthcare Elite program, and the bringing together of printing and supplies sales to allow resellers to leverage both opportunities.
The underlying theme, though, for DiFranco was the SMB market, which he said has led every economic recovery and he believes will also led this one, with IT-driven efficiencies at the forefront.
"This is the next critical piece for our channel, where the next major growth will come from," said DiFranco.
He added he sees major untapped potential here. In Canada, HP identifies a total addressable market of $15 billion, of which $7 billion flows through the channel. HP only has 21 per cent of that market today -- De Witt wants half.
HP sees the key to getting there laying in the breadth of its portfolio. The vendor leads in 15 of the 19 markets it competes in, and it wants to lead in all of them. Combined with over 187,000 worldwide partners and Stephen DeWitt, senior vice-president and general manager, Americas region for HP's personal systems group, said its a potent combination.
"Collectively we're untouchable,"said DeWitt. "We're not unbeatable, but we're untouchable in terms of scale."
Retail and education will all be focus areas, but again for DeWitt SMB is the key.
"We know historically we haven't executed well here, and our competition has done a better job here than we have. But we're changing the game," said DeWitt. "We've listened to you, we've heard what you've said, and we're making some historic changes."
In addition to the partner enablement programs to accelerate profitability partner entry into key markets, DeWitt said HP is also investing in analytics to avoid channel conflict and focusing on building relationships.
While Dell has began to match and adapt some of HP's pricing programs, DeWitt said that's not where HP believes the battle will be won.
"Like the dinosaurs, one would expect (Dell) would evolve, But you've got to walk the walk and talk the talk in this game, and you can't fake it," said DeWitt. "The simple fact is we've brought into the channel through our Smart Buys a much better model for doing business. We believe we have a more robust collective portfolio."
While HP is comfortable fighting the battle with Dell in pricing, and will do so if necessary, at the end of the day DeWitt said it's about total cost of ownership over the product life-cycle, and here HP has the materials and metrics to show it has Dell beat handily.
"Price isn't what defines client computing, it's just a piece of the pie. It's overall economics of life-cycle that defines who has the best return on investment, and we blow them away," said DeWitt. "We're comfortable measuring any aspect of that life-cycle relative to our friends from Texas."
To grow that SMB market share in Canada, Charles Salameh, vice-president and general manager for HP Canada's personal systems group, said they'll be looking at Canada as 10 little countries, with broad programs as well as regional-specific focuses to address varying vertical opportunities.
"We're now able to offer a virtual CIO concept for the SMB customer, to become their virtual trusted adviser, with our channel partners adding even more assets like management services and break-fix services," said Salameh.
HP's breadth now allows it to offer SMBs the right form factor product for their needs, an integrated print solution configured by the channel, networking and managed services. It's an integrated and broad-based offering that a point player such as Dell can't match, said Salameh. It's also about the combined innovation of HP and its channel partners taking these offerings to market in unique ways.
"Dell wants it really badly. They want what we have. Our partners want us to be more aggressive with them supporting their growth, and we want their insight," said Salameh.