HP Adds Blade Servers To Enterprise Sales Mix

Hewlett-Packard changed its compensation plan to target the fastest-growing market segment and will now pay its enterprise sales force for blade server sales.

May 26, 2006

2 Min Read
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Hewlett-Packard changed its compensation plan and will now pay its enterprise sales force for blade server sales.

Solution providers said the move became effective May 1 and alters a compensation plan launched at the beginning of HP’s fiscal year in November. Under the original plan, HP’s enterprise sales force was no longer responsible for industry-standard server sales, which included blades, and was only compensated for enterprise products such as SANs, Unix servers and OpenView.

The original plan was designed to push salespeople to sell higher-margin enterprise servers and storage rather than higher-volume, lower-margin ProLiant servers. Solution providers had pointed out that too many enterprise salespeople were hitting their numbers by relying on volume ProLiant sales rather than focusing on higher-margin enterprise products and solutions.

But they added that while stand-alone ProLiant servers may be lower-margin volume products, industry-standard blades are the fastest-growing enterprise server segment.

“That’s a terrific move because so much of the activity in servers lately has been blade-related,” said Tim Joyce, president and CEO of Roundstone Systems, an HP enterprise solution provider in Alameda, Calif.Solution providers, too, said the switch puts weight behind their contention that blades are, in fact, an enterprise-value sale rather than a commodity-volume sale.

Don Richie, CEO of Sequel Data Systems, an HP enterprise solution provider in Austin, Texas, welcomed the move, noting it is very narrowly focused and lets HP enterprise salespeople work with partners on the hottest segment of the server market without taking too much attention away from Unix and Integrity server sales.

John Thompson, HP’s vice president and general manager, Solution Partners Organization, Americas, said the move ties into the Palo Alto, Calif.-based company’s strategy to stay in front of the market.

“As we look at what’s happening in the blade technology space, we are seeing a lot of server consolidation and infrastructure utilization of the blades with software and management tools, services and enterprise solutions," Thompson said. "We’ve ensured that we’ve aligned not only the partner compensation but the HP compensation to drive upticks in what we believe to be a very important segment of the market.”

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