Server
IBM is back
The server category in 2009 saw IBM wrest the Channel Champion crown from HP. It may be recalled that IBM was rated the Channel Champion in 2007, but lost the position to HP in 2008.
Sun, which ranked third last year, failed to make the cut because it polled less than 10 percent of the overall votes cast in the category. Oracle’s acquisition of Sun and the lack of clarity about the future of Sun’s business led many partners to switch to either HP or IBM.
In 2009, Dell’s focus on developing the server and storage partner network helped it poll more votes than Sun; even so, the company failed to get 10 percent of the votes. This could be because Dell engages with very select partners and doesn’t have a stock-and-sell model for its servers. To the company’s credit, the select partners who voted for it said Dell was making good progress and has evolved a good partner engagement policy.
IBM
At the beginning of 2009, IBM came up with its rules of partner engagement; this played a role in improving its preference among partners. The new policy lists out named accounts, and the company has done a good job of mapping customer accounts in order to avoid any conflict between partners.
IBM scored high on partner profitability. Respondents said that the company managed the market operating price (MOP) of its entry-level servers and provided an opportunity for everyone in the channel to make good margins.
According to respondents, IBM invested in customer marketing initiatives, especially in the SMB segment, and conducted several partner-customer forums. Many HP partners said that at a time when HP cut down on its customer and channel marketing, IBM got aggressive.
IBM has improved its special price clearance (SPC) which has reduced its response time from over 10 days to two. The company’s lead generation has also improved. Many IBM partners said that they get regular and validated leads from the company.
Hewlett-Packard
Several of HP’s premium business partners admit that the company’s overall channel engagement suffered due to frequent changes in team structures and policies.
The company’s delivery lead-time on built-to-order (BTO) models is almost 6-8 weeks, the longest among its peers.
Partner profitability took a back seat as the company, in order to remain price competitive, had to offer deep discounts.
HP’s online SPC tool, Smart Quote, introduced in February 2009, resulted in delays, and many respondents said that its SPC took 7-15 days.
While they said the tool is good, they blamed the delay on the account managers responsible for approving the online SPC request. However, over the last couple of months, HP has streamlined the process and the SPC has now come down to a maximum of three days.
HP had issues in maintaining the MOP of its entry-level models, particularly the ML range, which are also pushed through sub-distributors. Respondents said that the distributor’s transfer price to authorized partners was often 6-8 percent more than that offered by sub-distributors.
The consolidation of HP’s authorized service delivery partners (ASDPs) during H1 2009 and the company’s move to neutral service providers (NSPs) has impacted the quality of its warranty support and created dissatisfaction among the ASDPs who were terminated. According to respondents, HP has more than halved the number of its ASDPs, and even more consolidation is in the process.
In addition, the existing ASDPs who took the survey complained that their service calls and overall revenues from servicing HP have come down with the introduction of NSPs; this is putting pressure on their business because over the years they have invested heavily in building skill-sets around HP products for providing post-sales service. What’s more, HP has rationalized the service rate-card for ASDPs, and this has not gone down well with them.
Decision-making continues to be a bottleneck with HP. The company has different product managers for different product categories, making it difficult to get timely pre-sales support and SPC. HP partners in Gujarat questioned the company’s decision to club the Gujarat territory with Pune; they believe that local channel engagement and decision-making will suffer.
The one criterion where HP did better than IBM was channel training and certification. HP’s regular training programs (such as Fridays with Proliant) have been well-appreciated.
Starting November 2009, HP has taken a series of initiatives to improve its channel engagement. It has made its named-account policy simpler, and has put more customer accounts in the partner domain. It has also cut down its customer account management team, thus giving partners more independence in managing accounts.
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