Archive for August, 2008

HP has put a stake in the ground for channel managers, how will you respond?

Monday, August 25th, 2008

Hewlett-Packard is a bellwether company in many respects, so if your job touches any facet of channel management, you’d better be studying its overhaul of the PartnerOne program last week closely.

There are three pretty profound things I’d like to highlight.

  1. First, the company is ditching the Gold, Platinum and other precious metals-inspired tiering conventions that many of us have become accustomed to over the years. Instead, a VAR can be an HP Business Partner, an HP Preferred Partner (better) or an HP Elite Partner (best). The rationale is that customers understand these terms better, and HP will use these titles more copiously in its end-user marketing.
  2. Second, these titles will apply across the entire company, which is kind of neat for VARs who may be big in one HP line, but smaller in others and who now may be inspired to sell a more complete representation of the HP product line.
  3. And third, any extra special consideration in terms of pricing and marketing support that a solution provider might receive is predicated on that VAR’s investment in total solutions skills. As an example, one of the first “Elite” designations that HP will roll out this year will center on Virtualization.

It would be impossible to cover every change in this blog, so I’ll direct you to this separate link for the complete press kit and more information.

Thanks to Tom LaRocca, vice president of marketing and strategy for the Solution Partners Organization – Americas, HP, for helping me out with a briefing about the changes.

So, here’s my initial reaction to all this.

Simpler is better. If a company as big as HP can actually succeed with enforcing a more or less single program across all of its product divisions, I say, BRAVO! One of the complaints I hear most often from VARs is how difficult it is to get simple answers from their so-called vendor partners. From a competitive standpoint, if your company makes a point product, the power of HP’s approach could become a threat since it makes it more compelling for a VAR to sell products from other HP divisions rather than having to negotiate a partner relationship with another company.

Solutions are where it’s at. With this latest move, both HP and Cisco Systems (through its Industry Solutions Partner Network) now have substantial energy behind what I’ll call real solutions. That is, integrated hardware and software that can’t simply be plucked off the shelf and that require both technology skills and business savvy for a VAR or reseller to represent. For far too long, product certifications and check-off lists have outweighed true knowledge in the real world. HP’s recognition of solutions specializations is welcome.

If there’s one thing I’ve learned in 19 years of cover the IT channel, it’s that change takes time.

By no means will the spirit of HP’s PartnerOne changes become habit with this simple announcement. But as the business world dons a new attitude about technology, so too must the companies that sell it — across the IT channel. As your own partners grapple with the HP policy changes, you’d be foolish not to use this as a time to initiate meaningful dialog about your own program. I’ve helped several different high-tech vendors gather this sort of feedback since leaving my post at CRN a year ago to help validate changes they were considering. Remember, perception equals reality, so now is as good a time as any to find out just what the perception is about your own program.

The economy has the channel talking, but the news ain’t all that bad

Friday, August 15th, 2008

Last week, I was gratified to moderate a keynote panel at Breakaway, the annual conference held by the Computing Technology Industry Association (more affectionately known as CompTIA). I was, frankly, a little nervous about this particular session because the topic was the economy. I didn’t want the discussion to be a downer, but much of the business news coverage lately hasn’t been on my side. I don’t need to regurgitate all the data, but the United States continues to face the very real possibility of a recession. You’d think the sky was falling.

The thing is, though, many solution providers or MSPs focused on small businesses and midsize companies (affectionately known as SMBs for those of you who prefer acronyms) haven’t seemed to notice. During the conference, I spoke with Oli Thordarson, founder and principal of Alvaka Networks, who says he has been astonishingly gratified by sales activity this year. He advises those of his salespeople who fret over the economic picture to focus on the positive: how technology and technology services can help businesses become more efficient, which in turn allows them to be more innovative.

Oli wasn’t the only one who told me pretty much the same thing. In many ways, in fact, the economic picture is helping support the dual mantras of solution-selling and managed services that smart solution providers have embraced as their business creed moving into the last two years of this decade. It’s very telling that productivity growth still hovers around 2.5 percent. It was less than 0.7 percent in the last seven U.S. recessions. Technology solutions play a big role here.

Like the solution provider at the event, the vendors on my panel last week also professed to respectable growth this year. Even the financial services industry, which has been hammered this year by write-downs and layoffs and scandals, oh my, is still investing in technology such as virtualization solutions. Because it just makes senses. Admittedly all of the panelists represented global organizations that can count on other markets to fuel sales even if things have slowed domestically. But they were pretty optimistic, all things considered. Here’s a blog report filed by someone on behalf of CompTIA.

Things got really heated when I asked for a reality check about green technology, which is a pet topic of mine that I cover in my blog GreenTech Pastures. While such a question would have been shrugged off as frivolous just a year ago, all of these vendors are deadly serious that green philosophies must be closely wedded to solution design, energy efficiency policies and managed services. While one VAR questioned the impact on small business from the audience, others suggested they are starting to feel the ripple effect from work being done at the enterprise level. Ignore the green debate at your peril, the panelists suggested, a sentiment that was echoed by many in the audience.

Four ingredients of a successful business planning engagement

Friday, August 1st, 2008

First, let me say that I never ever have been a channel manager nor have I ever tried to sell technology solutions to put food on my table. But I have interviewed scads of smart people from all parts of the high-tech channel and feel beholden to share what I have learned and heard.

I get the sense that one of the most controversial topics you can introduce to a channel account manager OR a solution provider business manager is the concept of joint business planning. Some people associate it with all sorts of paperwork, which then lives in a document somewhere gathering cyber-cobwebs, while others give it almost too much weight, expecting a one-time session to solve underlying process issues or disconnects. I prefer to think of it, instead, as the underlying dialogue informing a healthy relationship between a VAR and one of its strategic suppliers.

I wouldn’t dream of telling you what the best business plan format is for you and your channel partners. Because, after all, this is something that needs to be pertinent to YOUR and THEIR business. But SWOT Management Group believes that there are four fundamental principles underlying any successful joint business planning process. These are.

  • VISION
  • COLLABORATION
  • TRUST
  • RESULTS

A moment on each of these concepts.

VISION is, in effect, your guidance system for the partnership. There are two big things you need to focus on here, Disclosure and Buy-in. In the disclosure process, you need to discuss joint expectations, the investments required on both sides (in terms of people and hard costs) as well as the way “success” will be measured. During this phase, you should insist on a formal planning session, one that includes key executives from both the partner and the vendor’s management team. Without that buy-in, the plan could be doomed at the field execution phase.

COLLABORATION refers to your ability to create an information-sharing culture, in which knowledge is shared transparently between the partner and the vendor’s field team. A communications breakdown could impede progress. To make this thing work, you have to think like one big team. Way harder than it sounds, I know.

Successful collaboration leads to TRUST, which in turn leads to better collaboration. Chicken-and-egg style. According to an article published in the Harvard Business Review, those resellers that had a high degree of trust in their manufacturer partners contributed 78 percent more sales than those who had a lower level of trust. The trust factor correlates directly with financial performance, effectiveness of field execution and resource allocation.

RESULTS could come in a number of different forms, only you can set the agenda there. But a good business plan could do any or all of the following: Drive your sales scale, improve your field execution or grow your revenue.

None of this is stuff you don’t already know. But since many of you just started a new fiscal year, it might be a good time to revisit these simple ideas. Any thoughts?