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Adapting To A New HP

Armed with a new channel strategy that melds its commercial and enterprise units into a single channel organization, an additional $50 million in funding, and the launch of new programs

Hewlett-Packard Chairman and CEO Carly Fiorina is preaching unity. Armed with a new channel strategy that melds its commercial and enterprise units into a single channel organization, an additional $50 million in funding, and the launch of new programs to team with partners on services, Fiorina is set to take on HP's one true technology rival, IBM.

Stressing that HP solution providers account for more than two-thirds of the company's annual revenue, Fiorina vowed last week at the vendor's annual Americas Partner Conference in Los Angeles that HP would forge tighter alliances with partners. The reason: HP can't reach its strategic goals without working closely with the channel.

In an exclusive interview last week with CRN and sister publication VARBusiness, Fiorina said the unified channel structure opens the door for HP and its partners to line up together and present a single face to the customer. "We will not be successful,and I'm not talking about surviving and making money; we all agree, we've been through that,unless our strategies and our partners' strategies are lined up," she said. "We have to think about ourselves as a single value chain, a single value to a customer. There's huge power in that, but it means that we've got to really address partners like this. That means that we have to have the conversations about where are we complementary. We have to have the conversations about where do both of us have costs that maybe one of us needs to get rid of."

In her keynote, Fiorina said $50 billion of the company's $73 billion in annual revenue for 2003 was generated and influenced by the channel. Although this number includes substantial retail-related contributions, it is more than 72 percent higher than the $29 billion that IBM says it generated in conjunction with partners last year, she said. Moreover, HP generated more revenue with partners last year than IBM, Sun Microsystems, EMC and Dell combined, Fiorina said.

Fiorina's channel march comes as HP, Palo Alto, Calif., faces fierce competition for the mind share of solution providers, particularly in the enterprise segment, where IBM claims it has recruited globally close to 400 formerly HP-exclusive partners in the past two years. It also comes with HP battling IBM's on-demand computing strategy with its own Adaptive Enterprise initiative. Fiorina, in fact, said the unified channel structure is critical to the success of Adaptive Enterprise, the mantra driving the feature set for all HP products going forward.

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