Check out this exclusive one-on-one interview with Sue Barsamian, who talks about how HP is moving full speed ahead with partners alongside. "There is work to be done. But we do feel that a lot of heavy lifting is behind us at a period when other others are just getting started."

May 29, 2014

8 Min Read
Exclusive: Amid Surprise Layoffs, HP's Sue Barsamian Has High Hopes for Enterprise Group, Partners

By TC Doyle

HP’s surprise announcement that it will reduce its workforce by an additional 11,000-16,000 people has put the company’s turnaround in the spotlight again. But HP Senior Vice President Sue Barsamian has high hopes for the company’s Enterprise Group and its hybrid cloud solutions.

Barsamian is the senior vice president and general manager for Enterprise Group (EG) Worldwide Indirect Sales. Her mission is to increase sales and productivity through indirect channels, including resellers, distributors, alliance partners and OEMs. It’s a big job. So far, Barsamian has received wide praise for how she handles it, though the enterprise group, where much of the HP’s best intellectual property resides, saw sales dip by 2 percent in the quarter ended April 30. While enterprise server and networking sales grew, the group overall was pulled down by weakness in the storage and business critical systems divisions.

In this exclusive interview with Channel Partners’ executive editor T.C. Doyle, Barsamian explained how the group is positioning itself for improved results. The newest layoffs notwithstanding, Barsamian is confident that HP is returning to form after two difficult years. She believes HP is ready again “to play offense.” And she gives a lot of the credit for the repositioning to CEO Meg Whitman, who took charge amid an accounting scandal, an exodus of talent and whole lot of questions about the company’s future.

Since joining the company, Whitman has restored stability both inside and outside the company. Partners report that they are more confident than at any time in the past several years, and customer satisfaction (pockets of it, anyway) has improved.

While the latest job cuts and lukewarm outlook left some company watchers scratching their heads — the total number of job cuts related the Whitman’s turnaround plan will be close 50,000, which is a number roughly equal to the entire size of Google’s worldwide workforce — Barsamian’s confidence is rising. Here’s a sampling from the interview.

Channel Partners: HP has made numerous changes in the past few years. Where are you today?

Sue Barsamian: We feel we have done a lot and are coming out as others, including Dell, NetApp and Cisco, are heading in. It’s not a walk in the park [for us]. There is work to be done. But we do feel that a lot of heavy lifting is behind us at a period when other others are just getting started. Our goal is to start playing full offense.

CP: Are you on offense?

SB: We definitely are. As IBM begins to sell those x86 [server] assets to Lenovo, we are moving forward with our plans. In contrast, they are dealing with perception that they are leaving hardware. First the PCs went. Now the x86 servers.

CP: So what has that meant to you?

SB: For one thing, we have had more interest on the Unix side of our portfolio — something that is, arguably, on a glide path down. The Unix market is in secular decline; that’s not going to change. But all of a sudden, there is a little extra life in that business for us. And when we look into it, we realize that there are a lot of the IBM AIX and pSeries customers who are wondering if IBM is getting out of hardware. And they want to find another safe haven. The same is true in storage. So my point is it is very hard to contain these [messages], particularly when, in their case, it’s the second of what people then see as a series of actions. We’re in the mode now that we have to capitalize on this. As an example, we have put a program in place around getting as many customers and partners over to HP as that [IBM] asset transitions to Lenovo. Lenovo has a lot of strengths as a vendor, obviously, but their profile is very different than IBM, particularly if you look at the partner community. The IBM reseller base was a very value and solution-oriented reseller base. And they were true portfolio players. They were selling x86, they were selling Unix, they were selling storage, they were selling software, etc. I think the assumption for many of them now is that when Lenovo takes that IBM asset, it is going to end up with a company that is not currently playing at the value end of the stack. That’s not Lenovo’s model. They are a ferocious competitor at the volume, transactional end of the market. Can they build the muscle memory required for playing at the value end of the spectrum? I’m sure they can over time. But how long? Do they have the ISV relationships that it takes to build things like HP does such as converged systems offerings pre-integrated with Microsoft or VMware, etc.?

CP: What has happened with the HP partner community as a result of all the changes there?

SB: Well, it’s impossible to say definitively. But let me give you some perspectives. If you go back six years, some of the pure-play HP partners picked up other brands. That sustained them through the rocky periods of HP’s transitions. It’s not that they disengaged with us so much as they engaged with other players. Now we are back, fully engaged with them. From my perspective, we aren’t perfect, but we are back better than we have been in the channel in a very long time.

CP: So you have re-engaged and reinvigorated with the partners that you had. Are you [recruiting] from other people? Are you picking off those old AIX partners or maybe Cisco partners that don’t like the direction that it is taking with its “Intercloud”?

SB: A lot of that looks like share-shift within partner portfolios. As you know, a lot of HP partners are Cisco partners, for example. They may be network-server-storage with us, but network-server with them. Though some are exclusive, the vast majority of partners carry multiple brands in the core categories. A very typical scenario is that a partner will have us in three categories and Cisco in two. What we are focused on is shifting that balance of share. Our objective is to know where we stack. And so we are having those tough conversations. We don’t expect people to be exclusive. But we expect to be the dominant player with our partners. That’s our objective. And so we need to put a value proposition around partners that makes that good for them. One of the things we have worked on is making “better together” truly “better together.” If dealing with one company isn’t ultimately easier than dealing with three companies, then, even though all the assets could come from HP, it will still feel like a multicompany engagement. I think historically as we built out assets through different business groups through acquisitions and what have you, we still had some heavy lifting to do [in terms of] an experience perspective, a partner perspective and an ease-of-doing business perspective. We knew we could do better. That means one partner portal, one place to manage all your marketing MDF across all the different pillars of our portfolio, etc. We are now on the path where I can say that “better together” really is “better together.” You can get it all from us.

CP: What’s the biggest misconception about HP today?

SB: That we are a printer or a PC company. And I can tell you why: When you have a company that plays in the consumer and the commercial space, you find that the vast majority of your brand awareness [is tied to what consumers see.] It’s simple math: there are simply many more consumers than commercial customers. If you go around the world, and you look at the number of people who have an HP printer or camera at home, or a laptop or tablet, it’s massive. Therefore if you go to a cocktail party, it’s the consumer side of the business that has a larger chance of having a human touchpoint. Well, maybe not if you’re at a cocktail party in Palo Alto, Calif.,…but you get the picture.

CP: What’s the No. 1 thing partners ask of you today?

SB: Make it easier to get more from you, meaning us. And it’s on a couple of fronts. We worked really hard knocking down some programmatic challenges and some process challenges. We didn’t have everything in the same partner program, for example. Dumb, right? [laughs] Software, where I started, was treated different. So we spent 12-18 months working to improve things. We’re not perfect but I think we did a great job. We looked at all the programs, we listened to all the input we got from our partners and we did exhaustive focus groups. We came out and put a unified, cohesive, end-to-end program in place around the company’s assets. It is simple, predictable and delivers great profit. Does that mean we will not need to continue to improve the partner program? No. But we are a lot happier. We had some ease-of-doing-business things we had to fix. Quoting. Configuring. Pricing. Those things don’t manifest themselves as much when people buy in silos. But when people started doing what we wanted — buying more of the HP portfolio — that’s when we found out that things weren’t as easy to operate as they needed to be. Now we want to take the breadth of these assets and make them more consumable for resellers trying to package things up for [hybrid clouds].

CP: What positive things are you hearing from partners?

SB: The feel-good story is HP’s engagement with the channel. If you ask any of our resellers, they would say that HP’s coming out of the two-year period of restructuring and engaging with them as part of the process has been very positive. From Meg on down, the entire company has been focused on the channel. And the partners feel it. The attention. The integrity. It’s there more than ever.

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