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Tracking Down
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