HP Adds Cloud Specializations, Incentives To PartnerOne Program

Hewlett Packard is unleashing for the first time the full power of its lucrative PartnerOne program to accelerate the solution provider transition to new cloud computing business models.

In what is surely the biggest potential partner profitability game changer at this week's HP Global Partner Conference, HP is officially bringing new cloud computing specializations to PartnerOne with new training, incentives and rebates in what is being referred to as PartnerOne for Cloud.

"This is awesome," said John Kolimago, vice president of technology solution sales at Anexinet, an HP Platinum converged infrastructure partner based in Blue Bell, Pa. "This is going to remunerate us for extending the private infrastructures we are building today into HP's hybrid cloud and OpenStack technologies and into the HP public cloud."

[Related: HP's Whitman: Stoking The Partner Growth Engine ]

Ultimately, putting cloud into the "industry leading partner program" sets the stage for future cloud computing sales growth for Anexinet, said Kolimago."This is the way the world is moving and we have to embrace it," he said. "This absolutely makes it easier for us to do that. HP has been a great partner to us for so long. They understand us. We call on the same customers together. It is a natural extension of our selling model."

The new PartnerOne for Cloud comes with virtually 100 percent of Anexinet's customers looking at cloud computing options, said Kolimago. "The ones that concern me the most are the ones that aren't having the cloud conversation with me today," he said. "If they are not having that conversation with me they are having it with somebody else that wants to eat my lunch. What better way to take that conversation to them than in the context of the biggest brand out there in IT -- HP."

Under the new HP program, which will be rolled out in more detail in May and officially be put into PartnerOne effective Nov. 1, there will be three new cloud specializations: HP CloudBuilder, HP CloudReseller and HP CloudProvider.

"We are going to help our partners on every step of this cloud journey as they evolve their business models," said Steven Dietch, vice president of worldwide cloud for HP's Enterprise Group. "We are lighting a fire with this program. HP intends to be the leader in this market."

HP PartnerOne for Cloud is providing the critical training and investments to help partners move to the new style of IT that is reshaping the marketplace, said HP PartnerOne Director of Marketing Strategy Patrick Eitenbichler. "Partners need to invest to future proof their business," he said. "The annuities are small at first, but a few years from now they will be ten times what they are now and life will be very good for partners. If partners wait three or four years and don't get into the game now it will be very, very difficult for them."

The PartnerOne cloud incentives are robust, according to HP. For example, HP's current crop of 100 CloudBuilders that are building on premise private clouds for customers make up to 23 percent rebates combined in up front and back end rebates, said Eitenbichler.

Under the HP CloudProvider for PartnerOne for Service Providers, the current crop of several hundred HP powered cloud service providers, which grew 50 percent year over year, are provided market development funds (MDF) for demand generation along with co-selling opportunities with HP sales reps and HP solution providers, said Eitenbichler.

HP is also upping the ante with its CloudReseller program by training its HP Gold and HP Silver partners to do the high margin cloud systems integration services work, said Eitenbichler. "This is going to allow partners to maintain their trusted advisor relationship with the customer," he said.

Some partners have been walking away from systems integration cloud services opportunities as customers move applications like ERP to the cloud, said Eitenbichler.

"That is the worst thing they could do," he said. "They lose their trusted relationship with the customer and walk away from lucrative services revenue. We are going to enable them to do integration work whatever it may be. We want the reseller to advise the customer on SLAs (Service Level Agreements) and then integrate the cloud services with on-site IT to deliver a consistent seamless experience to the end user. That way they maintain their trusted relationship and get the high margins on the services that make up 70 percent of the cloud sale in the first year."

NEXT: HP CloudReseller Levels And Incentives

HP Gold partners will be required to have seven to ten days of training for solution provider technical staff for HP CloudReseller status providing education on multiple SLA IT environments, said Eitenbichler. HP Gold Advanced Sales Certified requires an additional day of training along with the prerequisite Silver training.

HP Silver level CloudReseller training provides technical staff with three days of systems integration implementation. HP Silver level requires at least two sales staff certified for one day each of training.

HP partners will achieve Platinum Cloud status by achieving two of three Gold specializations which includes HP software specializations. That opens the door for partners to operate in multiple cloud models.

One sign of the times: midmarket customers are moving to the cloud quickly even though the return on investment to move to the cloud is worse than on premise solutions. That's because midmarket customers are constantly grappling with limited IT staff that cannot keep up with demands from the business. "This is where our partners need to seize the opportunity, move quickly into that market," said Eitenbichler.

Eitenbichler believes that only a small number of partners are aggressively moving to the new cloud computing business models. He said the challenge for partners is to move from the capital expenditure solution to operating expense based annuity cloud offerings with partner managed services. The key is making the shift to annuity based solutions before it is too late, said Eitenbichler. "The new style of IT is here," he said. "Now is the time. We are enabling partners to make that shift."

The Blue Bell, Pa. headquartered Anexinet, No. 213 on the CRN SP500 list, a ranking of the top solution providers in North America by revenue, has had its most success with selling cloud when it has layered its own branded managed services on top of cloud offerings, said Kolimago.

"That Anexinet managed service is what creates the true value for our customers," Kolimago said. "You can move workloads into the cloud but that doesn't make anything better per say. What our customers really want is to focus on the innovation in IT not the build, run and manage. We think having a strong cloud provider like HP with a program that enables us to add value through Anexinet delivered managed services on top really addresses the sweet spot of what our customers want: the ability to hand it off and know that it will work."

HP PartnerOne provides significant advantages over dealing with regional service providers that often struggle to invest to scale the business, said Kolimago. "HP is already there, they have six of the biggest data centers in the world, they have access to the greatest compute, storage and networking technologies," he said. "They have the global reach that our customers are looking for so they are an ideal partner for any cloud initiative we undertake."

Rick Chernick, CEO of Camera Corner Connecting Point, Green Bay, Wis., a longtime member of HP's SMB partner council, said he is glad to see HP stepping up to help partners cross the cloud computing chasm. "This is big," he said of the new PartnerOne for Cloud. "HP is educating us and then rewarding us for making cloud investments so we can get fired up and go out and sell it. Resellers know cloud is where the money is, but it takes time to understand and to get your staff and inside support people up and running on the cloud opportunity. This program gives resellers a cloud road map."

The HP incentives around cloud are going to be critical for partners to make the transition, said Chernick. "The backend rebates and special funds in total is the difference between us making money or not making money at the end of the year," he said. "We pay very close attention to the PartnerOne program and look at how we can go all in and make some money."

Kelly Ireland, founder and CEO of CB Technologies, a Westminster, Calif.-based HP enterprise partner, said she sees the PartnerOne for Cloud initiative as the next major step in HP CEO Meg Whitman's strategy to accelerate partner sales growth.

"What I see is Meg doing with cloud what she has done with everything else at HP," said Ireland. "She has put the right people in the right places with the right systems and set it up the way it should be so it can be successful in the channel. HP took its time with this and got it right. That's beneficial for the channel."​