HP channel chief pushes franchise concept

Las Vegas – HP (NYSE: HPQ) Americas channel chief Stephen DiFranco admits he is a numbers guy. He told the channel partners in attendance at the annual Americas Partner Conference that he’s not smart enough to make key decisions without the proper analytics.

One of the more startling figures he shared with audience, of which 130 are from Canada, was solution providers who are selling all HP product lines and do 70 per cent or more with the Palo Alto, Calif-based vendor grew 50 per cent last year. The rest of the channel grew 18 per cent.

DiFranco called these partners franchises. One solution provider BayShore Technologies Inc. of Tampa Bay, Fla., reported revenue growth of a whopping 145 per cent. “Let that (growth figure) sink in for a while,” he said.

One of DiFranco’s plans is to enable more channel partners to become franchise partners.

Kent MacDonald, vice president of Calgary-based solution provider Long View Systems, said that his company grew its HP business by 30 per cent and they have stepped up to become a converged infrastructure partner. He also sees the benefits of franchising, but said that Long View’s focus on the data centre is best served by having an open relationship with all vendors who want to partner with them.

Another interesting stat DiFranco provided was the total IT spend in the Americas. According to his analysis, its at $600 billion and the channel services about $200 billion of that currently. “That’s your market,” he said. DiFranco has also broken it down by city area in the U.S. For example, Long Island, N.Y.’s total addressable market is $492 million of which 20 per cent of that is handled by HP resellers. HP’s channel team is working on breakdowns for Canadian cities as well as Latin American cities.

The hot areas of the market are SMB, healthcare, mobility, cloud, and audio visual. Again DiFranco provided the total addressable market in each:

$71 billion in SMB;

$143 billion in cloud;

$26.4 billion in mobility;

$39.6 billion in audio-visual; and

$33.3 billion in healthcare ($2.3 billion in Canada).

What DiFranco is asking the channel partners to do with these hot markets is to build a practice around SMB, cloud, and mobility.

MacDonald said his company already has a mobility practice but its does not include WebOS. After listening to DiFranco he has decided that the it should. “We have not leveraged WebOS, but the demand is there for mobility and it will need to be secure as well,” he said.

The WebOS will also have its own channel program, DiFranco said. This program will look similar to others with a deal registration component, rebates and market development funds. It too will be slated for the Elite section of PartnerOne. “We want solution providers to build a practice in the cloud and for mobility. They are big markets and the channel needs to address this,” DiFranco said.

DiFranco also said that he wants to bring a harmonized approach to the Americas channel for HP.

In the past, each region operated separately and had its own costs.

What DiFranco wants to do is remove as much cost from repeated programs and to share in best practices. For example, HP Canada’s Blue Carpet plan is being considered for the U.S. region, according to Canadian channel chief John Cammalleri.

HP’s channel programs also needed simplification. “It was a maze,” he said. While most programs were streamlined DiFranco did add mobility and software to the PartnerOne program.

In the Elite side of channel operations the channel team at HP included Office Print Solutions as an Elite designation.

From last year to this year HP increased its channel revenue by 20 per cent in the Americas, added 263 new solution providers to its network and paid out more than $50 million more in rebates to the channel from 2009.

“As we exited the recession, we re-engineered the program and drove more dollars into the program. We were compressed by a majority of partners doing most of the business. And, while that is wonderful; it’s not exactly healthy,” DiFranco said.

One of the things he has invested in was hiring a CIO for the channel team at HP.

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Paolo Del Nibletto
Paolo Del Nibletto
Former editor of Computer Dealer News, covering Canada's IT channel community.

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