Meg Whitman, president and CEO of HP opened up her keynoting at the global partner event here in Las Vegas by stressing the importance of the channel. “I love the channel,” she said. “You are a huge part of our success and a huge part of our future. “I want to provide an update to HP’s strategy and growth, demonstrate our commitment to the channel and to make it more profitable for the channel to do business with Hewlett Packard.”
“The last couple of years at Hewlett Packard haven’t been easy,” she said. But HP is turning itself round. “We know what needs to get done and we’re doing it.” Last year she laid out a four year plan for Hewlett Packard. “My management team needed to come together with a realistic view of what we needed to do and what we needed to change.”
2014 will mean a recovery and the basis for future expansion, she said. “You won’t have to wait until 2015 to see progress. You will see the results this year. In 2013 we are on a very strong financial footing. Last year HP generated $10.6 billion of cash flow from operations. That’s more operating cash flow than Coca Cola, Disney and Fedex. A company with $10.6 billion in cash flow is a force to be reckoned wth.”
One of the biggest problems HP has had in the last few years has been churn in top management, she admitted. HP has taken some of its old HR systems and revised them. Last year HP invested more in R&D, it launched a new advertising campain, and revised its entire communications and PR strategy. HP has put an increased focus on the channel, she said. HP created a party advisory board and surveyed 6,000 channel partners.
That showed HP was too complex to do business with, there are too mny complicated programmes and HP’s tools and processes were hard to navigate, Whitman said. It has implemented a single channel programme. HP now has a very clear policy about taking business away from the channel and going direct. “This will simply not be tolerated,” she said, raising heavy applause from the channel audience.
“Partners are part of the DNA of Hewlett Packard and are an essential part of our future,” she said. HP will make it simpler and more consistent to do business with its partners and strengthen trust and loyalty. HP has simplified the management of the channel and will work hand in hand in business growth. “A fast no is far better than a slow no. A long yes isn’t satisfying either,” she said.
HP will rationalise sales and technical specifications and will simplify the support profile. There will be one partner programme across the whole of HP, she reiterated. HP will implement a simple compensation model generating rebates from the first sale. It will also remove caps and allow an unlimited pay out. It will put more focus on making its compensation structure clear. There will be a new HP tool to simplify channel business. HP Financial Services will also chip in on the channel front.
She said that HP has a number of products so popular that there is a shortage, such as its storage portfolio and its Elite tablet, aimed at the enterprise market. She said that the leadership across the channel business had the power to do their best now. HP has kept its best and brightest executives but has brought in some new members of the management team.