HP rationalizes Partner First Program for omni-channel era

Simplification was the theme on changes to HP’s Partner First program. On one level, they will make it easier for all partners to do business with HP. On another, they will limit the access some partners in the old Business Partner classification have to some types of product.


Thomas Jensen, vice president and head of worldwide channel sales strategy at HP

BOSTON – At its Global Partner Conference here, HP Inc. announced some significant changes to the structure of its Partner First partner program. The number of tiers has been reduced, and access to some products limited, in an effort to better control their value proposition. Changes have been made in program structure to make HP easier to do business with. The company also announced a new HP Device as a Service (DaaS) certification, to provide training on the new offering it announced this summer, one of several new certifications that are on the way.

“Partners want HP to help create sales and growth for them, but also to keep it simple and be easy to do business with,” said Thomas Jensen, vice president and head of worldwide channel sales strategy at HP.

Jensen said that the groundwork for the changes announced had been laid down doing separation, HP decided, however, to put off the changes until now because they didn’t want to both do the separation and redo the channel program at the same time.

“Because we didn’t want to do both at once, we worked on the changes, and reworked them again, based on partner feedback,” Jensen said.

What will likely be the most significant change is the move from four membership tiers in the Partner First program to three – platinum, gold and silver – with the old Business Partner level, which had been the lowest tier, gone.

“We gain simplicity moving from a four tier to a three tier partner program,” Jensen said. “However, we are not going to closed distribution model. The remaining partners who fall outside these three tiers will get products through distribution. To this end, we are empowering our distributors to work more closely with this group of partners.”

Christoph Schell, President of the Americas at HP, provided more explanation on the logic behind the changes.

“We said early on that we wanted to invest in partners that invest with us. The market landscape is also changing. In an omnichannel world, if you give products to everyone, you lose control of the value proposition. We’ve already come a long way there in changing that. For example, in supplies, we have significantly shrunk the amount of partners who have access to HP toner. This has helped our value proposition. This is required in an omnichannel world, where one value proposition wrongly set can dictate the value proposition for all.”

“The benefits associated with Partner First have changed somewhat to recognize the difference in those types of partners,” said John Cammalleri, Canadian channel head at HP Canada. “There will be certain benefits that will be new. For others, there will be changes to the program where certain elements won’t be available. The changes do mean though that there will be more Platinum, Gold and Silver partners in Partner First than before.”

The program also now allows partners at all three levels to fit within different new sales tracks tied to volume selling, global systems integration and specialized solutions. The volume track focuses on print supplies, printers and PCs. The specialization tracks let partners build competencies around select products, services and contractual solutions.

“This allows us to recognize partners for the value they bring to HP,” Cammalleri said. “With these different tracks, you can have different levels in different areas. This allows us to reward partners specifically in areas where they thrive, and not try to force fit them into an area that’s unnatural to them.”

Increased simplicity was also a theme of changes to make it easier to do business with HP.

“Partners told us they needed to have a PhD in HP to manage the programs,” Jensen said.

One of the changes is the introduction of a simplified and globally standardized compensation model. The new framework eliminates redundancies, has fewer variables on which partners are measured and focuses on three key categories: core compensation, specialists and new business opportunities.

“We tended to over-individualize things country by country,” Jensen said. “There are countries where we do need to cater to local legislation, but not to the degree that we did. The old program was also geared to measuring all things channel, but we are going to focus on the most important things. We plan to reduce complexity by 60 per cent as of November 1.”

“On the compensation front, we have reduced the number of variables going in by 66 per cent,” Jon Flaxman, HP’s COO, told partners. “This means 80 per cent of your claims will be processed in 30 minutes. With the introduction of integrated quoting, we have gone from days to get you a price quote to getting it instantly. These investments in consolidating platforms, shortening turnaround times and automating how we process information are designed to help you win, close deals and make more money.”

New certifications are coming as well, in the new A3 printing business related to the Samsung acquisition, in mobility, and in Device as a Service (DaaS). All these are planned to roll out by the first half of 2017.

One of them, the Device as a Service certification, was formally announced at the GPC event and is scheduled to be available November 1. It provides training and validation of skills on HP DaaS, which was launched earlier this summer, and which bundles computing systems and services under a single contract with no up-front costs. Starting in November, partners who become a DaaS Specialist can access exclusive HP Partner First benefits tied to the offering, including sales tools, in-depth reporting and analytics solutions, flexible financing, sales and marketing support and a strong partner compensation model.

“We expect the majority of revenue for device as a service to come through the channel, which is why we have built out this set of tools, and have done 12 pilots around this,” said Ron Coughlin, President of Personal Systems at HP.

Jensen also reiterated HP’s commitment to the channel, and noted that the fulfillment of CEO Weisler’s pledge to raise the channel business from 80 to 87 per cent is just the start of a trend.

“We expect the 87 per cent number to increase as we go forward,” he said. “It’s not just a one time off thing. It’s about being a channel-dedicated company. The old HP had a five year period where we skewed away from being a channel company. This was modelled on Dell, and cutting out the middleman. We took too many customers direct. Even then, we were still over 70 per cent channel. Now we teach out salesforce to use the sales reps of partners to give them much better reach.”