HP Inc. 1 Year Post-Split: Partners Drive 87% of Revenue

HP Inc. says its channel partners are doing well after it and Hewlett Packard Enterprise split off from their parent company.

The two companies officially split from HP a year ago, with HPE focusing on software, storage, servers and networking and HP Inc. focusing on PCs and printing.

Thomas Jensen, vice president of channel sales strategy for HP Inc., says his company transferred 3,000 direct customers to its partners as a part of an effort to be “channel-driven.”

Jensen chatted with Channel Partners about the past year for HP Inc.’s Partner First program and its future. The transcript has been edited for length and clarity.

Channel Partners: What have the major changes been for HP partners since the split?

Thomas Jensen: I think first and foremost, since the separation on Nov. 1 last year, our partners have seen an HP that is much more agile, nimble and focused, much more dedicated to the channel than we have before, which is something we don’t take lightly because we’ve always been a channel-driven company. So when we go out and take pride in saying, “We’re more channel-driven than ever before,” we put some weight behind those words.

One of the things that we’ve done is, very early on we sent out a message to our partners that we were restructuring the way we work with the customers [with whom] we had direct business and essentially moved a great proportion of that so by the end of our currently finished fiscal year, we are now conducting more than 87 percent of our revenue through our channel partners, which is a testament to the fact that we are actually driving more business through the channel, and we envision to see this number rising. On top of that, we have restructured our partner program so that it’s more intuitive and more simple to do business with us, and generally put a lot of effort behind being focused on the partners. And we tend to brand ourselves after the separation as a Fortune 100 with the muscle and brain of Fortune 100 company but the heart and vision and energy of a startup.{ad}

CP: Since the split, what have partners been telling you about their experience with the Partner First program?

TJ: First and foremost, let me start by telling you what they told us around the split. What they told us was, “It seems like you haven’t separated, in the sense that it was a non-event for us. We didn’t notice it.” Which I think is the greatest compliment that we could ever get, because our core objective was to ensure that we had as little disruption for our partners as possible. So when they tell us that it was a non-event, that was the biggest compliment we could get around the preparation work that we’ve done in the year leading up to the separation. Then once you’re past the separation, you move to business as usual, and what we’ve heard there is that …

{vpipagebreak}

… our partners attribute [to] us … a core skill that we are exercising and listening. They comment to us, “You listen to us like you have never listened to us before. You ask us what we think before you make significant change to your programs, to your go-to-market structures, and we highly value that.”

And what we announced on the day of the separation was that we see the partners as an independent extension of our sales force. And just as we ask our sales force on a continual basis on how we can improve the way we sell out products and our solutions toward our customers, similarly have we done it to our partners and similarly have we done it around the Partner First program.

Then thirdly, what we’ve heard from them is that they feel that the quest that we have endeavored on to make things simpler and easier and act with speed is moving very strongly in the right direction. We have reduced the number of variables in our conversation structure, so we’ve actually reduced complexity by 60 percent moving into this new financial year.

CP: How does the different portfolio change the way partners interact with their end users?

TJ: Yes, the portfolio has changed significantly, and we have invested a huge amount of dollars in innovation in ensuring that we have the right products for the right solutions for our partners, and in driving the right demand in the market. The portfolio is not only an up-to-date portfolio; it is a leading-edge portfolio of which we are accredited from our partners that we are having the most attractive portfolio in the market from an innovation, design, feature, capability perspective.{ad}

Secondly, we have brought a number of new solutions to market. We have brought the world’s thinnest and lightest business PC to the market, which enables business persons like ourselves to get a very thin and light yet very functional business-grade computer. We have brought a brand new category to the market in computing – the HP X3, which is both a PC, a tablet and a mobile device. We have introduced our first device-as-a-service offering, which enables both SMBs and enterprises to get an as-a-service offering on compute. We have launched our first A3 print line to enable us to tap into the caulking market. We have refined our managed print services offerings to make them more agile and customer-focused. And we have launched our first 3D printer to enable us to disrupt the market for manufacturing.

These are the things we have brought to the market, which are all with the channel in mind and which are all tailored to help our partners tap into more business opportunities.

CP: What kind of collaboration exists between HP Inc. and HPE right now in terms of partners?

TJ: A lot of collaboration. We are like brothers and sisters with a lot of business together yet two very independent companies living out our independent lives on Wall Street and in real life. We work very closely as customers, as partners, in the way that we …

{vpipagebreak}

… optimize each other’s business. However, from a partner perspective, one of the core reasons of separating (one our partners have also attributed) is that, “You guys are more effective and supportive of us by working independently, because the synergies between your two businesses was one of the inhibitors in terms of driving simplicity, speed and agility.” So what we are ensuring is that we are not continuing to operate with a one-channel strategy as one company. On the contrary, we are two separate companies. Therefore, we do not collaborate on that part.

CP: What can we expect to see in the future to the Partner First program in the upcoming year?

TJ: I think you will see a number of things. They will all be concentrated around speed, simplicity and sales. You will see us driving further simplification of our program infrastructure. You will see us driving more specialization for our partners as well in terms of focused program specializations around mobility, around device-as-a-service, around our new A3 lineup, around 3D print. We will start developing various specializations that are supporting our current innovation.

And then you will see us embracing the channel more than ever before in terms of having joint sales opportunities. Not only have we launched in this year… a centralized hub for partners for all things HP to support them selling, we have launched a social selling portal, which gives them access to social sales collaboration content, syndication of material that goes beyond just HP products and solutions but anything related to the industry that they can use to create their social profile and to drive more awareness to their customers.{ad}

CP: Is there anything else you’d like to add?

TJ: I think the core is that you will see HP continue to be a channel-focused company that will growth with the channel and through the channel, and you will see our share of business through the channel growing. You will see us listening to our channel partners, as we’ve done for the past year and continue to do so. We will use the channel partners to get feedback, insights before driving core decisions, and in essence, I think you will see us growing proportionally more with our channel than any other vendor in the market, and we will intend to take the market share and to win business together with our partners.