HP's Hurd wants partners to dive deeper

As much as partners want predictability and reliability from their vendors, Mark Hurd says vendors also want the same from their partners. The Hewlett Packard Co. (Nasdaq: HPQ) CEO went about fulfilling his half of the bargain in his keynote Tuesday at HP's Americas Partner conference, promising partners more profitability if they dive deeper into HP's product portfolio.

While HP hasn't always been a company that puts the channel first, Hurd said HP has worked hard to get to a point now where it's driving more revenue through the channel than ever before, and it has done it by ensuring HP is completely neutral on the economics of the different routes to market, reducing channel conflict.

"We're completely neutral on the economics, and we do a lot of work on that," said Hurd. "Economically it's immaterial to us what method of distribution we use, and therefore you're huge to us."

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As much as partners want predictability and reliability from their vendors, Mark Hurd says vendors also want the same from their partners. The Hewlett Packard Co. (Nasdaq: HPQ) CEO went about fulfilling his half of the bargain in his keynote Tuesday at HP's Americas Partner conference, promising partners more profitability if they dive deeper into HP's product portfolio.

While HP hasn't always been a company that puts the channel first, Hurd said HP has worked hard to get to a point now where it's driving more revenue through the channel than ever before, and it has done it by ensuring HP is completely neutral on the economics of the different routes to market, reducing channel conflict.

"We're completely neutral on the economics, and we do a lot of work on that," said Hurd. "Economically it's immaterial to us what method of distribution we use, and therefore you're huge to us."

HP is working hard to drive standard components across multiple product lines as much as possible, particularly with the walls breaking down between servers, storage and networking. Hurd calls that evolution a fait-accompli and, with 80 per cent gross margins vs. the lean margins in PCs and servers, there's profitability potential for both HP and its partners.

To that end, Hurd said he wants partners to drive deeper and deeper into the HP product portfolio, seeing the breadth of HP's solutions as a key competitive differentiator over its competitors in point markets. It's on the ability to integrate from end-point device to networking to data centre, enabled by trusted channel advisers, that HP wants to differentiate.

"When we deal with partners we want them to deal with a portfolio of products and drive attach at every turn," said Hurd. "You're not going to be able to be, in isolation, a network player or a storage player or a server player."

Hurd said HP is committed to the networking space, where it has grown-out its ProCurve play with the addition of 3Com, now going to market as HP Networking and butting heads with incumbents such as Cisco Systems (Nasdaq: CSCO).

Here, it's again HP's converged infrastructure vision for the data centre that it's betting will be successful.

"You've probably heard speeches that the world will revolve around the network. Well, go and check their profit and loss, I'm going to bet their business revolves around the network," said Hurd. "I'm suspicious of anyone that says their intellectual property will dominate, because I don't think that's how it's going to work. We'll need to be prepared to mix and match capabilities based on business needs, and we'll need the intellectual property and capability to adjust."

If partners are going to go deeper with HP though, Hurd acknowledged the vendor will have to address channel complexity. Admitting that HP has made it too complicated for partners to get invested, trained and certified across multiple silos with different configuration tools and access points, Hurd said that complexity must be addressed.