HPM Networks: $200 Million HP VAR Downplays Managed Services
No doubt, managed services is a hot segment within the IT channel. But here’s a timely reality check from HPM Networks, a Hewlett-Packard solutions provider that expects annual revenues to hit $200 million this year — up from about $93 million last year. The twist: Managed services are not a core part of HPM’s revenue stream, according to CEO Romi Randhawa. Here’s why.
HPM Networks “brings enterprise products to the SMB market,” Randhawa says. His company targets customers with 2000 seats and below. HPM Networks’ sweet spot is companies with roughly 600 to 800 employees. And HPM has bet its entire business on HP products.
When asked about managed services opportunities, Randhawa said he hasn’t shifted to a “recurring revenue” model because “clients are just too savvy” in his Northern California market. Translation: It sounds like most of HPM’s customers have some required IT expertise to manage the solutions HPM deploys.
Randhawa’s success reinforces a key fact: There’s still room for VARs to succeed by working closely with hardware providers, and not all successful VARs have transitioned to managed services.
Of course, The VAR Guy is walking a fine line… After all, our resident blogger spends considerable time reading The VAR Guy’s sister site: MSPmentor. And plenty of MSPs are enjoying rapid growth, according to the annual MSPmentor 100 survey.
But to reiterate: managed services is just one wave within a larger ocean of channel opportunities. That’s why MSP- and services-centric software companies like Autotask and ConnectWise have spent more time speaking with traditional VARs in recent months.
Quite a Conversation
The VAR Guy connected with Randhawa during a Hewlett-Packard phone briefing last week. During the call, HP disclosed plans for a range of new SMB products and services. Plus, HP described its growing SMB Advisory Council.
The 15-member council is led by Meaghan Kelly, VP of Channel Strategy and SMB for HP’s Solution Provider Organization. The council meets quarterly to provide HP channel executives with feedback and guidance on HP’s SMB channel strategy and SMB PartnerONE programs and initiatives, including extending deal registration benefits to all HP partners and expanding SMB Elite benefits and rewards to more HP partners, according to an HP press release.