HP Enterprise Boss Rallies Partners To Capitalize On IBM, Dell Uncertainty

Hewlett-Packard Enterprise Group Executive Vice President Dave Donatelli Monday rallied the company's partners to capitalize on the indecision surrounding the potential sale of IBM's x86 server business and Dell's proposed $24.4 billion leveraged buyout.

"Everybody who works at HP will tell you that certainty is very important in the enterprise," said Donatelli in a solution provider webcast that came just two days before aggressive new HP PartnerOne program changes go into effect in the sales trenches. "We have certainly learned that ourselves. Anytime you have lack of clarity and you have concern about what the future is, it is a great business opportunity. Our strategy is very clear."

With HP's new Moonshot server, software-defined networking product set and 3Par storage solutions heralding a new IT architecture inflection point, Donatelli said the time is right for partners to bring next-generation solutions to customers.

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"We have a very clear product road map," said Donatelli. "And we think the potential impact here is that we can go get customers who are concerned about the future of their platforms and then sell them our next-generation products."

Neither IBM, in regards to the potential sale of the IBM x86 server business to Lenovo, nor Dell, regarding the leveraged buyout, would comment on the HP partner call for partners to capitalize on the uncertainty.

CRN has reported that IBM's negotiations to sell its x86 server business to Lenovo are "moving quickly" and that the deal could come at any time. IBM is reportedly seeking $5 billion to $6 billion for its x86 server business.

"On the rumored [x86 server business] sale [to Lenovo] at IBM, I think you have players deciding are they going to opt in and play or are they going to opt out?" said Donatelli "You have other players saying 'My business model is very challenged by this change; how do I deal with that business model change?' -- which is what I think is what is happening in the case of Dell."

Dell just last week approved a program authorizing $91 million to be used as cash bonus reward to aid in the retention of Dell employees in the midst of the leveraged buyout.

Donatelli's comments came as HP Monday announced an enterprise group restructuring aimed at accelerating the pace of HP innovation in the server marketplace.

HP on Monday not only created a new business unit to focus exclusively on the big data converged infrastructure opportunity but also merged its two separate server businesses into a $14 billion HP server business group.

Donatelli said the changes are aimed at driving explosive new business opportunities for HP partners playing in the next-generation data center market. He said HP customers are clamoring for next-generation solutions like HP's Moonshot servers, which HP itself is using to run a major part of HP.com.

In HP's case, Donatelli said, the Moonshot server has resulted in 90 percent savings in both data center footprint and power costs for HP, which is running a part of its HP.com website on Moonshot. He said the breakthrough technology amounts to HP running HP.com on the energy equivalent of 12 60-watt light bulbs.

NEXT: HP Partners Say They Are Committed To Selling End To End HP Solutions

Dean Cappellazzo, CEO of Bedrock Technology Partners, Sunnyvale, Calif., who has restructured his business to put more resources into selling an end-to-end HP solution, said he sees HP making big gains based on sales and channel changes.

"We have changed our sales approach based on the executive management of HP and their communication with the partners," he said. "We are taking a single-threaded approach from a partner standpoint, going to market with the full family of HP products and services. We believe in it. We see Dell and IBM having issues and HP getting stronger."

Cappellazzo said he made the big changes to commit more resources to the HP relationship after the HP partner conference in February in large part because of the HP PartnerOne channel program improvements and the strong next-generation HP product set. "If you sell all HP, including services, support and full solutions, your profit and margins increase dramatically," he said.

One top solution provider CEO, who did not want to comment on the record for fear of alienating other vendor partners, said he expects both his HP enterprise business and printer and personal systems business to double this year as a result of the channel program changes and better sales relationships in the field with HP reps. He credited HP CEO Meg Whitman with reinvigorating HP partner sales relationships.

"HP has invested and we have invested in deepening the relationship, and it's working," said the CEO. ""Our drive into the data center with HP is paying off. We don't see a need to do business with an IBM or Dell."

Rick Chernick, the CEO of Camera Corner Connecting Point, a Green Bay, Wis.-based HP partner, said he sees HP getting more aggressive working hand in hand with partners to take server share from all comers including IBM and Dell. He said he was fired up to grab share with next-generation HP products after the partner webcast.

Chernick also credited Whitman with revitalizing HP's channel sales force. "Meg knows the only way to win this war is to fight in the sales trenches with partners," he said. "HP is becoming more partner-centric under Meg. She is dialed into engaging directly with the partner channel. HP is listening to partners and making changes."

"The fact that HP is getting partners together and communicating with us regularly is a giant breakthrough in the industry in terms of partner commitment," said Chernick of the 90-minute call with HP partners that included Whitman, Donatelli, HP Printing and Personal Systems Executive Vice President Todd Bradley, HP Software Executive Vice President George Kadifa and HP Senior Vice President of HP Enterprise Group Sales Sue Barsamian. "I have never seen a vendor that regularly puts their top executives on a partner webcast for 90 minutes. HP is listening to partners and getting it done."

PUBLISHED APRIL 29, 2013