HP partners see opportunity in Fiorina’s departure

With Carly Fiorina’s ouster at Hewlett-Packard Co. (HP), some partners are hoping for a more channel friendly and customer-focused leader at the company.

During Fiorina’s tenure as chairman and chief executive officer (CEO), HP hurt reseller and distributor partners by undercutting them and selling direct to customers as it battled for market share with Dell Inc., several HP partners said. Her successor could limit direct sales and strengthen the channel partnerships, they said.

“We’d like nothing more than to see HP take a step back and reconsider its direct strategy and invest more of its efforts in the channel,” said Keith Bradley, North America president at technology distributor Ingram Micro Inc. “Since 2001, HP has not always been the best partner to the channel.”

Bradley’s comments were echoed by Steve Raymund, chairman and CEO of distributor Tech Data Corp. in Clearwater, Florida. “Carly had cooled her hostile rhetoric towards the channel in recent years, although she remained enamored of the direct approach. In the U.S. we’ve seen more channel equilibrium of late, while in Europe the strategy has been to move forward with more direct sales,” Raymund said. “It will be interesting to see whether her departure results in a re-evaluation of their overall channel strategy.”

Michael Nair, president of Startek Computers Inc., a small HP dealer in Concord, California, also hopes to see changes with Fiorina’s departure. “I have not seen any direction as far as dealers is concerned. I hope they will actually help us sell HP products. I am an HP sales and service provider, but my biggest competitor is HP itself,” he said.

Angie Wong, president of value-added reseller Network Designs Interaction Services Inc. in Fremont, California, was so turned off by HP that she switched about 80 percent of her company’s HP business to IBM Corp. over the last few years.

“In the old days, HP had pretty good channel integrity, they understood that partners were promoting the product and made sure it is profitable for us to sell the product. Since Carly became CEO, the channel conflicts have become pretty crazy. Very often we find that we cannot compete on pricing with HP Direct,” Wong said.

HP could follow IBM in offering a pricing parity program that provides discounts to partners so they are not undercut by the HP direct sales force, Wong said. “In the past few years HP’s primary concern has been to gain market share regardless of how they achieved it. It could be at the expense of their business partner and I hope that is going to change.”

One HP solution provider criticized Fiorina for not being involved enough with customers. “It appeared as though Fiorina was unapproachable for a customer. My hope is that the next person is more approachable and customer focused,” said Tim Joyce, president and CEO of Roundstone Systems Corp. in Alameda, California. “I think this was a change that was a long time in coming and we think that it has the potential of being a very good move for HP,” Joyce said.

There was a lot of change at HP during Fiorina’s almost six years at the helm. HP acquired Compaq Computer Corp. and took on the challenge to compete with IBM on premium computers and services and with Dell on business and consumer systems.

While several partners feel they lost out over the past years, some HP partners don’t feel they got dealt a bad card.

“Carly came on at a time when there was a great deal of integration going on. I have noticed a very consistent approach, consistently supporting the channel,” said John Paget, president and chief operating officer for North America at distributor Synnex Corp. in Fremont, California.

Steven Miller, president and CEO of Berkeley Technika Inc., a solution provider in Emeryville, California, doing business as BTI Infosystems Services, actually saw improvements at HP under Fiorina.

“HP was a little more difficult to work with in the pre-Carly times. With the acquisition of Compaq they become more channel friendly,” Miller said. “Part of that may have occurred because of the acquisition of Compaq … those people were extremely channel friendly and I was strong with both Compaq and HP.”

Next week, HP is hosting many partners at its HP Americas Partner Conference in Las Vegas. Partners will have the opportunity to go over the impact of Fiorina’s departure. Miller is attending and he is a “little concerned” about possible changes. HP’s interim leadership, however, has already given some reassurances by saying the company will continue on the path she charted.

TechData’s Raymund doesn’t expect any major changes in the short term. “Perhaps we’ll see some modest changes in coming months, but it’s hard to imagine that an interim CEO will sanction radical departures from the status quo,” Raymund said.

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