By
Craig Zarley
16 July 2007 07:45AM
Tags:
global | 2000 | gambit | hp | pays | var | sales | rep | salaries
Hewlett-Packard is upping the ante in its bid to wrestle Global 2000 accounts away from rival vendors.
Hewlett-Packard is upping the ante in its bid to wrestle Global 2000 accounts away from rival vendors with a new sales plan that funds solution provider sales rep salaries.
The new plan, called the Account Investment Program (AIP), calls for HP to fund all or part of the salary of solution provider employees for six quarters while the channel partner prospects for new business in select accounts assigned to the partner by HP.
The program is aimed at bringing the computer giant business in Global 2000 accounts where HP has little market share. HP declined to reveal the number of solution providers or accounts involved, but sources familiar with AIP put the figure of SPs currently participating in the plan at close to 20 and the number of accounts they are targeting at about 90.
What's more, solution providers say that at least some of the accounts are ones that were previously on HP's list of direct accounts, signaling that HP needs more help from the channel if it hopes to penetrate the Global 2000. Solution providers say the program was piloted for about six months and then rolled out to a broader group of solution providers in May. Adrian Jones, HP's vice president and general manager, Americas Solution Partners organization, called AIP a "no coverage" initiative model.
"It's where we don't have the coverage that we'd like today from the end user sales team," he said. "[We said] let's make sure we have coverage in these key end users and have channel partners go cover these accounts. This no coverage initiative is a jointly funded HP/partner effort to go after those accounts and that's what we are doing in the mid market space." While vendors have a long history of paying all or part of a solution provider's employee salary for a period of time to push specific products, HP's initiative appears to more strategic in that it's designed to grow HP's share in the mid market through a sustained channel-led effort.
"It's well funded and well thought out," said Geoffrey Lilien, CEO of Lilien Systems, an HP solution provider in Larkspur, Calif. Lilien noted that previous HP sales initiatives often came from individual HP businesses such as storage or BCS. "One of the best things about [AIP] is that they are going across business units and not just one unit is paying for it," he said. "Sometimes the money at HP is silohed. One group will end up paying for what will end up being good results for another group." Larry Holzenthaler, executive vice president, sales and marketing at Total Tec Systems, an HP solution provider in Edison, N.J. added that the AIP accounts his company has been assigned have the potential to turn into an annual run rate of several million dollars in HP products.
"The channel has some hunters that [HP] can use," he said. "This is a way to put some our proven people out into going after new accounts that would be difficult for us to afford." Holzenthaler noted that most often his sales people spend time maintaining current accounts and less time prospecting for new ones. "This allows us to take a proven hunter and turn him loose on prospecting," he said. Still solution providers note that HP's approach works best for solution providers who are virtually exclusive to the vendor they represent.
"The fact that we are HP exclusive and just carry complimentary products, 70 percent of our sales are HP products and we don't carry, IBM, EMC or Sun. That makes us an appealing partner to make an investment with," Holzenthaler said.