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HP’s Whitman Lauds Channel at Morgan Stanley ConferenceHP’s Whitman Lauds Channel at Morgan Stanley Conference

At the Morgan Stanley technology conference, HP CEO Meg Whitman again talked up the channel’s part in the vendor’s recovery, basically telling analysts that partners saved the Hewlett-Packard's bacon while the company was on the critical list.

DH Kass

March 4, 2014

3 Min Read
HP CEO Meg Whitman
HP CEO Meg Whitman

Hewlett-Packard (HPQ) CEO Meg Whitman’s been saying a lot of good things about the channel lately. The latest example: In a March 3 presentation at the Morgan Stanley Technology, Media & Telecom Conference in San Francisco, Whitman again talked up the channel’s part in HP’s recovery, in areas ranging from hardware sales to servers, storage, printers, networking and even Chromebooks.

Bluntly speaking, Whitman told analysts in no uncertain terms that the channel saved HP’s bacon while the company was on the critical list.

Specifically, Whitman told analysts that the vendor’s channel partners, which generate as much as 75 percent of its hardware business, are vital to its ability to grow. And, she reiterated how hard HP has worked in the last two years to regain the channel’s trust.

From SeekingAlpha, here’s an excerpt from her top-level channel comments:

“If the channel is not healthy and we don’t have a great relationship with innovative products that they can sell and make money on, we’re not going to grow the company. And I think one of things that we’ve worked on very hard over the last two years, which is bearing fruit, is our relationship with the channel. They have trust and confidence in us. They like the innovative products that they make money on.

So, if we’re going to grow, the channel has to represent HP, and they have to grow their business with their customers.”

Whitman also touched on the importance of product innovation–no great revelation there–but tied introductions of new products for its mid-tier 3PAR line, new PCs and tablets, networking and converged infrastructure equipment to how useful they are to the channel.

“These are products that are innovative that the channel [loves],” she said. “Our new converged system for example, which we call Sharks, we just introduced in December, we have a lot of hope that that’s going to be a pretty big opportunity for us and the channel.”

In addition, Whitman elaborated on IBM’s $2.3 billion sale of its x86 business to Lenovo and the negative impact it might have on the channel in the short term. Whitman made similar statements on a recent HP earnings call — suggesting IBM’s move affords HP an opportunity to grab some lost market share and sales.

Here are snippets from her comments along those lines:

“What I have learned about this business through our own tough experience in August of 2007 is, instability is not our friend…And what we saw when we said we might be getting out of the PC business back in August of 2011 that shook the confidence of the channel. So any disruption is not a good thing.

And so, we think there is a real near-term opportunity for HP to actually gain share among some of our competitors who appear to be a little less stable than we do right now. I’ve to say we look like the paradigm of stability in the industry right now, and so we’d aim to capitalize on that.”

Whitman also promoted HP’s upcoming Global Partner Conference in Las Vegas starting on March 24.

Here are more nuggets:

“The lens [the channel views] all of these big cap technology providers is how do I make money with you? Is it easy to do business with HP? Are programs rewarding me? Am I going to make the investment?

We have to win the economic battle here, and we have to win hearts and minds, which is we’re here to stay, we’ve got an innovation roadmap that will make you money, we have a customer support and service organization that will make it easy for you to do business with us. ..it is consistency, consistency, consistency that wins the battle here.”

Whitman is the first HP CEO in recent memory to speak so frequently about channel relationships. It’s refreshing, but the turnaround remains a work in progress.

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About the Author(s)

DH Kass

Senior Contributing Blogger, The VAR Guy

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