Hewlett-Packard is hiring “hundreds” of salespeople to increase demand across channels as part of a play for market share, CEO Mark Hurd revealed June 19 in an address to resellers at the vendor’s Americas Partners Conference in Las Vegas.
The boost to the direct sales organization, while competing with VARs for business, would ultimately drive demand for HP’s vast portfolio in the market and drive sales for VARs, Hurd said.
“This is not a statement about channel direction,” Hurd told the more than 1,100 resellers. “This is about demand. As we add more salespeople, we add more demand for HP and increase the HP halo in the market. If you’re aligned with us, you will benefit from increased opportunity.”
The Palo Alto, Calif., company will use the additional staff to plug gaps in its coverage model on its march to greater market share, Hurd said. He called HP’s current 4 percent share unacceptable.
HP’s market share more than doubles when the company has at least one salesperson, direct or indirect, assigned to an account, a ratio the company won’t meet at its current configuration, he said.
While the measure is likely to ruffle feathers in HP’s channel, typically cautious of the company’s direct sales force that used to compete directly with its resellers, the theory holds water, said Tiffani Bova, research director of IT channel sales at Gartner Group, based in Sherman Oaks, Calif.
“If HP is creating demand for the product, it can only help resellers,” Bova said. “But they have to be careful how they execute. If they don’t take the proper steps and put in place the proper protocols, they’re only going to multiply the problems [channel conflict and mistrust] they already have.”
In addition to renewed sales pressure, HP plans to approach the market differently, Hurd said, controlling access points, where customers enter the market, and building more of a solution to sell the product.
Along those lines, the company’s market-leading Imaging and Printing Group would need to change its pedigree from a printer company to a printing company, to take advantage of the 11 percent increase in page printing that might not necessarily translate into an increase in printer sales.
HP plans to own more “control points in the market,” which, he said, are the points at which customers access certain services, such as digital photo printing kiosks and an on-demand Web-based commercial printer.
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“We don’t necessarily want to be in the kiosk business or the most omnipresent company on the Web,” Hurd said. “But to have access to the customer now you have to control those access points where they access the market.”
The march toward greater market share will continue to include a greater emphasis on “attach,” a practice to attach additional items to sales—such as monitors and PCs to a document management solution—which HP began trumpeting earlier this year in the channel with added incentives.
Committed to the Channel
Hurd, in his address, also reiterated the company’s commitment to the channel.
“I view the channel as a strategic advantage for HP,” he said. “There is no way to get to buying the points on our own without your help. There is no way to provide the solutions customers want without your help. There is no way to provide the local knowledge and the local presence customers need without your help.”
HP’s staff, and Hurd in particular, has been working to improve relations with channel partners after partners experienced several years of frustration while the vendor appeared bent on competing with them through indirect sales for even some of the smallest accounts in the market.
To exacerbate matters, Hurd appeared to intimate last year, shortly after he took the company’s helm, that the vendor would give preferential treatment to partners who showed their loyalty by favoring the brand at the cost of other vendors. The ill-timed statement frosted partners who already were resentful of HP’s direct efforts.