Fiorina: HP's Success Hinges On Channel

In a keynote speech Wednesday night here to members and guests of the Global Technology Distribution Council, Fiorina said that trusted partnerships between HP and its distributors and solution providers serve as the company's competitive edge as it exits its integration mode and continues its execution mode.

"Something that's fundamentally different from our competitors, other than our portfolio, is our collaboration with partners," Fiorina said. "Our success is measured on what we can achieve together with our partners. Two-thirds of our $75 billion business comes as a direct result of our collaboration with our partners and our channel."

In other comments, Fiorina said the Compaq brand will remain for at least the next six months because it still accounts for strong retail sales. "Compaq retains value in the PC retail space," she said. "What we've done was use two brands (HP and Compaq) to maintain shelf space and that has been very successful. Will Compaq be around 10 years from now? I doubt it."

Fiorina also said it's difficult to determine how an end to the war in Iraq will affect IT spending, but it should cause corporations to be less risk averse. "With uncertainty hanging over the market, there was no reason for people to make a decision if they didn't have to." she said. "[But] once the conflict is resolved, there will be other uncertainties, like how strong our fundamental economy is and how long will it take to bring stability to [Iraq]."

Fiorina based most of her talk on the theme of adaptation. Customers today, unlike during the dot.com boom, demand high ROI from effective, low-cost solutions delivered by fewer partners, she said. A large vendor with a wide breadth of value-driven solution providers is the best enabler of that strategy, she said. "We think companies with scope and scale can truly take on business and social challenges and lead the industry," she said. "You, our partners, are fundamental to that strategy."

Solution providers will be particularly important in helping HP deliver its technology to small and medium-size businesses, Fiorina said. But solution providers, no matter what market they serve, must be willing to add tangible value or they should find a different vendor partner, she said. "We must recognize we can't capitalize on opportunities without making hard choices and tough calls," she said.

Distributors and solution providers in the audience said they appreciate that Fiorina and her channel team have been consistent in delivering the same strategy message since HP merged with Compaq almost a year ago. "On the enterprise side, they have been collaborating well with us," said Mike Long, president of Arrow North American Computer Products. "They've been meeting with us, asking questions and trying to get it right."

Steve Raymund, chairman and CEO of broadline distributor Tech Data, often worries about HP's increased direct sales efforts, but said his concerns are often passed on from HP's channel directors straight to Fiorina. "I can hear in her words echoes of what Kevin [Gilroy, HP vice president and general manager of commercial channels, Americas] and I have talked about," he said. "That tells me that what we talk about gets back to her. From what she says, she has a deep understanding of the channel."