A Few Good
3000 Resellers
Art Garcia is on a hunt for buried treasure. Since last November he’s been the leader of a team that’s looking for the HP 3000 channel. Skeptics might say HP is looking for what’s left of 3000 partners after the glory days of the last decade. As Business Manager for the HP 3000’s Americas region, Garcia’s job is to discover what’s happened to the system’s resellers – and make them more successful. He works in the relatively new Americas Marketing Center for the Enterprise Systems Group (ESG), a resource that serves several product lines including the HP 3000. But Garcia’s job is all-3000, and he’s actively looking for the partners HP needs to increase 3000 sales.
That’s what brought him to our notice not long ago, when he called to discuss ways to help locate those partners. He arrived at his current post last November from a job in the mobile products group of HP, the handheld PSG business that delivered marketing manager Roy Breslawski to CSY a few months earlier. Garcia’s 10 years of HP experience include managing channel development for those mobile computing products, inside sales and a stint as a hardcopy product manager.
This year Garcia is a key player in
accomplishing Breslawski’s
goal of 30 percent new business for HP
3000s during fiscal 1998.
He’s also on the critical path for the
success of IA-64 in the
3000 line; analysts say CSY’s move to
support the architecture
will only be significant if enough software
providers write for
the new systems. A growing installed base
and good prospects for
new customers will motivate those
providers. Garcia means to deliver
the extra impact of the new Marketing
Center with changes in hand.
Earlier this year the 3000 resellers and
ISVs saw a change in
marketing funding through co-op dollars, a
new program that demands
a plan before any funding changes hands. We
asked him to explain
the changes that will impact the
3000’s channel, as well as estimate
how much gold is in the hills of the
system’s partner community.
Garcia believes there’s enough of that
existing, buried treasure
to avoid having to dig too deeply for new
partners.
Why is HP serving its HP 3000 reseller
marketing effort through
an external Marketing Center that’s
organized by geography?
It brings extra attention, focus and
liaison to channel partners
in the geographic region. It’s a model
that’s proven itself in
other parts of HP: our hardcopy and PSG
business. Most of our
other major businesses in HP do business in
this Marketing Center-centric
model. CSY has had a European marketing
center. We replicated
that model for the Americas.
Is there a marketing center for
ESG’s Pacific Rim business, and
is there HP 3000 representation in that
center today?
The bulk of HP 3000 business today is
centered around the Americas
and Europe. We get some business from Asia;
however, we haven’t
found it warrants its own specific
marketing center model.
This is an incremental investment, above
and beyond what CSY has
been able to provide in the past. It puts
extra focus, attention
and resources in the form of our team and
everything we do with
the Americas channel partner.
What’s your job in the 3000 market?
I’m responsible for managing the HP
3000 channel development in
the Americas. We provide a level of
championing to the HP 3000
channel partner, whether that would be a
distributor, a reseller
or a solution provider partner. But most
importantly, we represent
the Americas HP 3000 customer to CSY, and
we provide a level of
focus overall in our efforts for CSY to the
Americas.
We provide a day-to-day contact for the distributor with our field partners. We do planning, manage the relationships and champion for the distributors to CSY, along with HP sales force. We have also extended that model to second-tier resellers.
A large part of what we do is also working with our HP field partners in direct sales. Different elements of my team partner with the sales force, whether we’re in a situation with a channel customer approaching an end-user customer, or an HP direct sale going to the end-user customer through one of our channel partners.
Part of my team basically divides our
responsibility up geographically
for sales development. I have somebody that
covers the East Coast
for us, somebody covering the middle part
of the country and another
representative, Wayne Domke, who covers the
Western part of the
country. These are the product line sales
managers.
Those product line sales managers cover
the HP 3000 exclusively?
Our business unit of the marketing center
is HP 3000-centric.
That’s all we do. We are chartered for
providing specific, outbound
focus and drive just for the HP 3000 –
whether it’s to HP sales
force, the HP distributor, the reseller or
information support
to the end-user customer.
What’s your primary objective for
your work with CSY’s resellers
within the next 12 months?
We are making a big push to go back out
there and identify and
catalog software partners – who they
are, what their current situation
is, what are their needs.
About how big do you think the North
American 3000 vendor base
is right now?
I’ve got a couple folks on my team
actually going through the
Americas software partner base, based on
our initial investigations
through Interex files and old Solution
Catalogs. We haven’t contacted
all of these partners to understand what
they’re doing, but at
an initial take it looks like we have 250
partners out there who
have been identified as HP 3000 software
vendors.
I look at engaging those over the next
three to six months, trying
to understand who’s really active.
Having said that, I would say
that we’ll be particularly interested
in working with application
partners from a marketing viewpoint.
It’s those kinds of solution
partners that can bring HP 3000 customers
to the platform.
Are your identified partners lining up
along CSY’s five vertical
focus areas identified for HP 3000
growth?
That’s part of it, but you need to go
deeper than that. There’s
probably a whole other population of
software partners outside
of the key five verticals that we would
love to hear from.
Sure – a company like Distribution
Resources doesn’t fit very
neatly into any of those five segments,
right?
I would put them in the area of ones that
we need to really explore,
and find out what opportunity there is
outside of the other verticals.
There are customers who want to use the
HP 3000 as a general purpose
business computer, because they always
have. Do you think there’s
a future in that?
The answer would be, it depends – on
the application involved,
how it interacts with the platform and what
the end-value proposition
turns out to be. It some cases, absolutely.
In others, it may
not make sense for us as well as the
partner to continue.
If you have an application geared towards OLTP, or positioned towards worry-free, business critical computing – if that’s your proposition as a solution provider, then I’d say there’s a very good likelihood there’s a good fit.
We’re trying to identify HP 3000 software partners and focus on our relationship with them. One of the ways we’re doing that is to co-host with the distributors an appreciation function at HP World. [ESG group vice president] Bill Russell will be speaking, as well as Harper Thorpe, and there will be functional management there for interaction
I’d also like to encourage ISVs to
start thinking about getting
together to provide more of a comprehensive
and integrated solution
for HP customers. We hear a lot from our
end-user customers that
they still need hardware support. The 1-2
punch of an ISV and
a hardware reseller is a much better and
stronger solution. That
partnering works better when they
don’t cross over too much.
Analysts as well as customers are
looking at application availability
as a barometer of the 3000’s ability
to rebound. Do you agree,
and how important do you think applications
are to the 3000’s
future?
For any platform, application availability
is critical. The HP
3000 is no exception.
There aren’t as many
“name-brand” ISVs for the 3000 as for other
platforms. No SAP, no Microsoft Office, for
example. What kind
of impact does this lack of big-time
competition have for an ISV
considering 3000 development?
If you have an application that’s
targeted at that middle market
space, the HP 3000 is a great place, one
where you don’t have
to worry about battling with a Baan or a
Microsoft. Middle market
defined is a company from about $100
million to $1 billion in
revenues.
What kinds of resources would you
like to see for 3000 customers
to locate applications and ISVs?
This is an area that clearly we need to
work on. We need to make
it easier for an HP 3000 customer to
identify applications. In
the near term, the thing we’re working
on is starting to build
an updated Solutions Partner Catalog.
That’s already in progress,
and we’re working on something to show
at HP World.
ISVs and DARs – how do you
distinguish them?
When I think of an ISV I think of an
application partner. We have
a large amount of application-only
partners. When I think of a
DAR, it’s traditionally defined as a
company that is reselling
hardware. We have some partners that do
both, which we tend to
refer to as Solution Resellers, like an
Amisys, SGA or Summit.
The applications are a different game, since they bring an element of new business and new customers as a primary objective. It’s [a direction] we’re headed in this year, bringing new customers to the platform. In order for that to happen, it has to be driven by an application solution of some sort. The application addresses the customer’s business need, and the HP 3000 hardware we drag along in a new business sale. Working with application partners is always important.
In bringing new customers to the
platform, we’re very interested
in working not only with existing
application partners who do
that, but with any partner who thinks they
have a solution.
And who’s in charge of finding
those new partners, those application
providers?
That would fall into Kriss Rant’s
charter. He’s standing back
and looking at the HP 3000 solution as a
whole and looking at
what the end-user customers are asking for
today. He’s aligning
that with what solutions we have today.
He’s identifying whether
or not we need additional partners to meet
what our end-user customers
need. We just don’t know that yet; we
have to let Kriss do some
homework there. It will be driven by him,
and our marketing center
will implement whatever program he works
out. He’s also working
with the European HP 3000 marketing center.
[CSY marketing manager] Roy Breslawski
said this spring that he
wants to end what he called “marketing
welfare,” by changing the
terms of channel partners’ co-op
funding. Is more planning now
required to qualify for HP funding? Why is
the program being changed?
We are going to a brand new model, one
which allows CSY to focus
our channel investment on the distributors
and resellers who are
the HP 3000 Best in Class partners. We
think that partner will
be more effective, as they’re able to
invest in higher-impact,
longer-term sales generating activities.
Partners would get a
larger commitment by HP in the form of
up-front activity, better
and more timely information, as well as
better planning resources
available to them.
In addition, we think the value of the channel to the end-user increases because of the higher-impact activities they will be able to carry out. It’s primarily a plan-based model overall, but the details are HP proprietary and I’m not in a position to talk about them.
The old model did not work out in the way we had expected to, or the way the channel expected it to roll out. We had feedback from our end-user customers that they wanted to see some changes in the model. They asked for changes in how we addressed our channel partners. The funding model is a large part of that, because that’s what really drives channel partner behavior.
Customers have told us in a lot of cases they’d like to see more value-added [services] coming from our channel partners, as opposed to our opportunistic sales generating activities. For example, we had a lot of behavior in the channel where the same base of resellers were concentrating on a certain set of HP 3000 end-user customers – and yet there was a larger population of customers that were not being addressed by the channel.
On the West Coast, a good example that
we rolled out to remedy
this is called Customer Care. The intent is
to align channel partners
with key end-user customers in certain
geographies. This builds
relationships on a fairly exclusive basis.
The idea is that the
channel gets a certain territory, a set of
customers they would
be able to own and manage exclusive to any
other partner.
Another goal of Roy’s was
establishing a hierarchy of channel
partners – that’s to say, not all
ISVs and VARs are equal because
they work at varying levels, some more
active than others in placing
HP 3000s. How are you distinguishing
channel partners?
In terms of the ISVs, Kriss Rant will be
defining the program
once he comes on board in August. In terms
of my team and the
channel, I’m a little uncomfortable
with the terminology that
we’re “establishing a hierarchy
of partners.” That’s not the way
I’d prefer to look at this. We’ve
always continued to welcome
partnerships with all HP 3000 resellers.
Our channel strategy
at the end of the day maps to our targeted
end-user customers.
My team has been brought together with the mission of empowering and engaging and building a successful HP 3000 channel of distribution. We work with distributors, resellers, and the very few VARs that are out there [like Smith-Gardner, Amisys]. Our role is to engage above the levels of investment CSY has ever made. With the new Marketing Center-centric model that we’re going to, we’ll be able to put a level of attention and investment with our channel partners that we’ve not been able to get to before.
A lot of different activity in surveys
is defining what the needs
are of the respective channel partners. Our
program, which isn’t
final at this point, is intended to meet
the needs of the channel
partners in those respective spaces. The
details and criteria
are believed to be HP confidential.
Well, how do you share these plans with
prospective DARs in the
Americas if the details are HP
confidential?
We have the right players, and the right
amount of players, out
there that we think we need to be
successful in the years to come.
We are looking not necessarily at building
our channel base –
we’re very comfortable with the number
of partners we have out
there today. We’re concentrating on
making them more successful
with more targeted programs.
What could an ISV or reseller expect for
hardware sales opportunities
if they have a significant value-add, like
a new HP 3000 application?
HP asks that all resellers work through
territories. The HP field
organization manages which resellers are
selling in which geography,
and we break up the country into 16 trading
zones. What we ask
is that a HP reseller, just selling
hardware, would need to meet
sales and certification requirements on a
geography-by-geography
basis, so they are meeting the same levels
as current partners.
On top of that, they have to work with the
local field organization
to understand whether it makes sense to
have another reseller
there. In a lot of cases, several markets
are already oversaturated
with resellers. From HP’s standpoint,
throwing in one competitor
in a saturated market may make things
worse, instead of improving
things. It takes the pie and shifts it.
One way to transcend most of the
boundaries is if you are able
to show significant value-add in your sales
model. Typically that
can be with an application.
It seems being limited to one of 16
regions across the US might
not provide enough opportunity for an ISV
to earn a significant
amount off the hardware end of the sale.
If an ISV wants to be national, they can do
that – and partner
with the level of [hardware] reseller that
gets them the presence
they would like to have, let’s say
somebody like a Forsythe. If
you have the reseller focus on the systems
part of the sale, what
we find is generally the leverage tends to
better for all parties.
The software provider focuses on what they
do best and lets someone
else run the cables to the boxes. The
relationship we’d rather
see is one of the ISV partnering with the
hardware reseller at
the level they’d like to do business.
Then they can each stay
in their core competencies.
Do you think that locks the ISV out of
the financial benefits
of selling hardware at the same time they
sell the software?
As a rule, we don’t get software
providers who cross competencies
well, unless they’re very big, like a
Baan or an SAP. We don’t
find a lot of cases where ISVs are looking
to expand to other
competencies. If you have an application,
the rules of engagement
for doing business are much less than if
you were a reseller looking
to expand hardware sales into other
territories. There’s a significant
value in all of our infrastructure for
software provider solutions.
Art Garcia
HP 3000
Americas Region
Business Manager
Copyright 1998, The 3000 NewsWire. All rights reserved.
Copyright 1998 The 3000 NewsWire. All rights reserved