HP Software will cut its number of partners targeting mid-sized enterprises in Europe from 1200 to 300, as it reorganises a channel that had become swollen in the wake of its four-year acquisition drive.
The overhaul comes as part of its Business Class channel program, and coincides with a new focus on the mid-sized enterprise market alongside its traditional large enterprise market, as part of its ten.to.one strategy.
Sabby Gill, vice president of commercial sales for EMEA, said the firm's acquisition spree over the last few years - which saw it suck up firms such as Mercury, Opsware and Peregrine - had left it with a multitude of partners. "With that many acquisitions comes complexity."
Gill said the firm has been undertaking a detailed review of its partner strategy to consolidate its programs, and ensure it was focusing its resources to the most committed partners.
The Business Class program awards bonuses on license sales while directing cash to "growth and shorter payment times". He said HP had put in place a single space for managing claims and payments across the product range. It would offer partners the same training as its own sales people. Partners can also sell HP's education services, as well as its SaaS programs.
However, the price for HP's investment is a dramatic drop in the number of partners. While the firm currently has 1200 partners across EMEA pushing the products that now make up HP Software, the new channel strategy will be restricted to 300, initially at least.
Gill insisted that partners who do not make the cut would not be left out in the cold. Some could be supported by distribution, he suggested. In other cases, if a former partner provided a lead to the firm for fulfillment by HP, or another partner.
If a firm was consistently putting, say, $1m through HP, then they could look again at the partnership. By the same token, there was likely to be wastage from the lineup over time, he said. The 300 figure was not a hard and fast number.
"We believe the right number is 300. Is it the right number? Probably not," he said. Over time, the number could rise or, more likely, fall.
So far the firm has signed up about two thirds of its targeted partners, with the rest likely to sign soon, he said.
Critical to supporting the putative partners would be financing, he said, with cashflow being at the forefront of partners minds as they negotiate an exit from the financial downturn. Cash would be accrued from the first dollar of licence sale.
Meanwhile, he went on, HP's own sales staff would be "paid the same whether business is direct or through the channel". HP's internal sales team would only be compensated on partner business.
HP has already put in place financing for direct sales into the medium enterprise market. Financing for the channel will be put in place later this year.
Gill rejected any suggestion this meant HP had cherry-picked accounts for direct financing ahead of unleashing the channel on this market. Ultimately, he said, most of the value for partners could come from services, not licence sales. ®