|Channeling a Stream of New
Murphys job is to ensure e3000 end users dont notice his
company. But few organizations are more essential to the North
American HP 3000 owner, especially in these times of rising sales.
The president of the e3000s North American distributor for the
system leads a team whose objective is to make purchasing or
upgrading a 3000 a seamless experience. About four out of every five
North American e3000s come off the companys configuration line
in Denver, Colorado. In this springs rainstorm of new product
numbers, parts and components, Murphys company is the collector
that turns the flood of technical promise into a stream of
In the past
two years the distributor launched two other services: its Internet
portal, 3kworld.com, and the authorized resale supply point Phoenix
3000. 3kworld is the end user customer-centered operation, while
Phoenix brings used 3000s to North American resellers, which sell the
units to end-users. Murphy is at the head of the organization that
operates all three entities.
Client Systems in 1994, after 17 years of experience with several
large manufacturers. Murphy came to the distributor from a 3000
end-users seat, calling on experience in quality control,
inventory management, receivables management accounting
fundamentals, as well as an in-depth understanding of two-tier
channels at the manufacturers where he worked.
started as Client Systems first accountant, repositioning and
substantiating the viability of the company as a sound distributor.
In early 1995 he designed, developed and implemented the
distributors operational model, one that could effectively
compete with any other distributor. Managing operational, logistical,
and inside sales areas, Murphy laid the plumbing that delivered
systems to the customers through resellers.
he was promoted to VP and GM of Client Systems, assuming the
responsibilities of the entire distribution business. In September
Client Systems board of directors appointed him to the board
and named him as president. We checked in with him as his company was
swamped with orders and new hardware, to see how the firm was
directing the rising tide of new systems.
You came to the
HP 3000 world from the customer side, didnt you?
I came into Client
Systems to get its books up and running and get some processes and
procedures in place so it could continue to move forward and
be a viable distribution channel for Hewlett-Packard.
joining Client Systems I didnt do anything specifically with HP
3000s except work with one at Pella Window Company. Ive
primarily been associated with the accounting field. They were
manufacturing-distribution organizations which sold into a two-tier
channel. Its interesting to be an accountant with one firm and
go to another company and find out those businesses are related.
That two-tier model sounds a lot like the kind of
business that Client Systems is in for the e3000. How does what you
do impact the North American 3000 customer base?
distributes 100 percent of HPs indirect [North American 3000]
channel. Outside of a few enterprise accounts, we do it all. We do a
lot thats centered around the product life extension of the
3000, everything from demand fulfillment to presale technical support
to integration services and marketing services. We do program
management for HP, call center routing. The primary function we play
is to make a seamless process from HP all the way down to the end
The big thing on everybodys mind now is the
new systems. What kind of preparations has Client Systems been going
through for the new rollout?
business partner with HP, and in our position we have to do a lot of
work in preparation for any kind of product launch. Weve done
things like collaborative program management pieces, collateral
materials around the A- and N-Class, involvement in the Webcasts and
Webinars, doing sales tool diagnostics, product structure validation,
training, supply and logistical issues. All of this is to ensure that
when the product is ready for release, its absolutely seamless.
Theres been months and months of preparation to get to that
It sounds like you folks have to learn these new
systems better than anyone except maybe the HP factory itself.
We provide all the presale technical support for our reseller
channel. We need to be able to help them on any technical questions
that they have. Thats the reason we do factory training and
internals training. We know the product inside and out. We sent our
integration team out to California [to the factory]. That way
theres no difference in how the systems get integrated, a
seamless process between the factory and Client Systems.
Without getting too technical, it looks like these
new systems are very different from their predecessors. Did the level
of training prove that to be the case?
certainly a lot of differences between them. Its a matter of
understanding what those differences are. At first they look like
they might be cumbersome and really different, but when you get down
to it, I think for the most part customers will find this product has
an awful lot to offer. It certainly addresses many areas that have
been expressed concerns before.
What kind of reaction have you gotten from the
resellers about the system offerings?
The good news is
that were absolutely slammed, as orders are coming in for both
products. I always joke with the people in the integration center,
My goal is to break you.
tremendous level of excitement and enthusiasm around this product. I
hear it on a regular basis. Once they understand it, theres
been a high level of appreciation and enthusiasm for this. Its
been a remarkable time, and theres no question about HPs
couldnt be any higher. Deals we did, quotes for six or nine
months ago, are being re-quoted on the new product. Were seeing
a tremendous response in both quotes and accounts we havent
seen much activity in historically over the last couple of years.
Were seeing some of the older quotes turn into live and active
quotes. Weve got purchase orders flowing daily.
Are the configurations HP first announced meeting
the resellers immediate needs?
theyve got addresses the most immediate needs the customers
have, particularly around the 9x7.
We were a little surprised to find so many 9x7
owners looking at N-Class purchases instead of A-Class. Did you see
surprised at that. I always felt many of our 9x7 customers would find
the N box very attractive, and it would be a sweet spot for HP.
Well see it on both the A and the N, but Im not surprised
at the number of them [who are considering the N-Class]. When you
look at the performance, it really depends on where the 9x7 is. If
theyre on the higher 9x7, clearly theyre going to want to
begin to look at the N-Class for scalability.
How would you rate the impact of the channel
consolidation we talked about last year? Has it helped service levels
to the customer base?
improved the service levels. But Id caution that improvement is
not just from the consolidation alone. Its all the different
things that go along with the consolidation: the introduction of the
new product, an improvement in the communications process, both
within the channel and direct to the customers. If you look at all
the things weve been working on over the last year, we
dont want to look at the consolidation of the channel as an
event. Its an ongoing process, and as the market continues to
evolve, so too will the channel.
It certainly was
necessary. With that in place, its culminating into positive
things for the customer.
Will there be
more consolidation of e3000 resellers in the months to come? Is this
an annual process, having reseller contracts renewed each year?
We have to be
careful, and avoid asking Is there going to be change in the
channel? Change is inevitable, and the fact is that HPs
committed to focusing on the product and the service and ensuring the
customer is receiving the highest level of service. It may or may not
mean changes in the channel. HPs really coming from improving
the total customer experience throughout the entire value chain.
Whats changed with 3kworlds mission?
Will you be proceeding with e-commerce parts of the original business
plan, or have those needs changed in the 3000 community?
has changed with 3kworlds mission. What may have changed are
some of the functions that 3kworld was exploring, such as e-commerce.
We do not believe that e-commerce is a functionality thats
viable for 3kworld at this point.
complexity of integrating the product, Im not sure thats
the correct direction for 3kworld. Another example is the auctions.
We wanted to try them and see if it was a viable service, and the
answer came back no. What youll see moving forward is a much
more intense focus on the ISVs, and some of the tools makers and
other folks that bring things to the market.
Do you think those ISVs will be offering things
over 3kworld they havent offered before?
tremendous opportunity for some of the non-reselling ISVs, tools and
middleware. Its a great way to help them extend the reach into
the market. It will be more apparent where these things are on the
site. The navigation will be easier. By adding those features up
front, instead of burying them in the site, it will be easier for an
end user to find applications that they need.
We recognized an opportunity and created
3kworld to fill a void in the marketplace. As weve gone through
an evolution, we recognized some things worked very well, and some
things have not quite panned out.
How has the portals business model has
worked out for you?
been successful. This is why were tweaking it a little bit. It
provides a great opportunity. It certainly has substantiated its
value, both to Client Systems and to the market. I believe we can do
a lot more with it. Well continue to make it more and more
How will the Phoenix 3000 offerings change this
year, now that every system has been given an end-of-service date
except the A- and N-Class? Will the 9x7 owners find it easy to get
certified, authorized 9x9 systems?
more over to the newer product, we expect to see some of that other
[e3000] product that is not normally churning in the pre-owned
equipment channel today. We believe that Phoenix will be able to stay
its course and provide the channel with an alternative solution, to
help the reseller customers get to a point thats good for their
business. If we cant move them to the newest product, we
certainly feel we offer the channel a solution with equipment.
Is Phoenix selling anything direct to customers,
or is it simply a source for systems that authorized resellers
authorized to either sell into the direct channel on behalf of HP, as
well as its reseller channel. If we have opportunities and leads we
funnel those back through our resellers.
Something else thats on everyones mind
is the economys downturn. What advice would you give a 3000
solution provider in these slow times? Do you think the 3000 might
have some kind of advantage in a market thats become
This is a
difficult question, in that I dont want to provide business
advice or strategy. I think each of our ISVs and providers operate in
a different market. My belief is that the 3000 certainly has an
advantage in these type of times. If you go back to the HP Run
it, Trust it, Evolve it, message, we have a very strong, loyal
customer base that loves the 3000. This is one of those opportunities
where we will fare well. I think most businesses will look at that
and recognize its not the time to move.
My advice to
providers is to stay focused. Focus on your core competencies and the
application that works extraordinarily well on a system that is
absolutely reliable during a period of time when you
dont need radical changes and uncertainty. Well fare very
well in these times. Youve got great products coming out with
huge performance benefits. Its on an operating system that
youve been able to trust for more than 25 years. We expect a
lot of wonderful things to happen this year, despite the economy.