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HP Channel Partner Programs--Channels of Distinction
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VAC-A01.GAL
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..picturea:\vac\VAC-A01.GAL,65535,49151,1,37,13,
This customer slide pitch is to be used for recruiting new HP Channel
Partners or presenting new VAC programs to current Channel Partners.
The slides are geared for Channel Partners within the Americas and not
worldwide. The presentation is directed at HP Channel Partners whose
solutions will run on HP Computer Systems Organization's (CSO)
products. The target audience is ISVs, SIs, VARs, OEMs, distributors,
DAR, CWRs, and master VARs.
There are over 80 slides within the presentation. The pitch has been
designed modularly so you can pick and choose appropriate slides and
customize the presentation. The slides are formatted into sections A-I
(e.g., VAC-A01.GAL) that consist of overview slides followed by detail
slides. There are several anchor slides so that you may insert HP's
product slides and IMpact program slides. An Appendix Section houses
HP-confidential slides that can assist you in the presentation but are
not to be given to Channel Partners.
The slide set does not include CPO's strategy or products.
.PA
HP's Program for HP Channel Partners
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VAC-A02.GAL
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..pictureA:\VAC\VAC-A02.GAL,65535,49151,1,37,13,
The presentation discusses six main topics:
o The Commitment Section (Section C, slides VAC-C01 - 13.GAL) contains
quotes from top management, results of HP's rating from VARBUSINESS
magazine, and percentages of HP business leveraged through indirect
channels.
o The Infrastructure Section (Section D, slides VAC-D01 - 17.GAL)
describes the field sales organization, VAC Marketing Center, and
sponsoring entities that support channels. It also outlines each
marketing sponsor (Americas Industry Marketing, GSY, CSY, WSG) target
markets, and applications areas.
o The Flexible Relationship Section (Section E, slides VAC-E01 -
09.GAL) defines leveraging, reselling, and two-tier reselling channel
relationships.
o The Financial Incentives Section (Section F, slides VAC-F01 -
21.GAL) covers the economic benefits for each Channel Partner who teams
with HP.
o The Marketing Programs Section (Section G, slides VAC-G01 - 15.GAL)
lists various marketing programs that communicate, develop, and promote
HP Channel Partners.
o The Product Value Section (Section H, slides VAC-H01 - 03.GAL)
describes CSO products available to Channel Partners and HP's strengths
(company, products, industry).
Sections B and I are the Introductory and Summary Sections,
respectively. The Introduction Section gives a brief summary of HP's
programs, industry terminology comparisons, and HP's Channel Partner
definitions. The Summary Section recaps this slide (VAC-A02.GAL) and
bullets the main presentation points.
Under the Appendix Section there are two HP confidential slides: HP
Sales Rep Compensation Program and Financial Highlights Recap for
leveraging and reselling Channel Partners. The two slides should not
be copied and given to Channel Partners. Use them to discuss how HP
SRs are given incentives to work with Channel Partners or as your
reference tool to recap HP's Channel Partner compensation program.
.PA
Introduction
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VAC-B01.GAL
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..pictureA:\VAC\VAC-B01.GAL,65535,49151,1,37,13,
Introduction
------------
There are seven slides in this section that briefly explain what
Channel Partners expect from an indirect channel program, Channel
Partner terminology used by major hardware vendors, HP's Channel
Partner definitions, and what Channel Partners receive when they team
with HP.
.PA
A Program for Success
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VAC-B02.GAL
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..pictureA:\VAC\VAC-B02.GAL,65535,49151,1,37,13,
HP's channel programs meet the needs of Channel Partners, and--in
comparison to DEC, IBM, and Sun--HP is the easiest company to do
business with.
.PA
Channels Terminology Comparison
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VAC-B03.GAL
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..pictureA:\VAC\VAC-B03.GAL,65535,49151,1,37,13,
To help the new Channel Partner with HP's terminology, this slide has
been developed to show corresponding terminology within DEC, IBM, and
Sun. The information is in two parts and continues on the next slide.
.PA
Channels Terminology Comparisons (cont.)
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VAC-B04.GAL
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..pictureA:\VAC\VAC-B04.GAL,65535,49151,1,37,13,
.PA
HP Channel Partner Definitions
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VAC-B05.GAL
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HP Channel Partner Definitions (cont.)
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VAC-B06.GAL
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..pictureA:\VAC\VAC-B06.GAL,65535,49151,1,37,13,
These slides list definitions of HP Channel Partners. More detailed
descriptions will follow under Sections E and F.
.PA
What You Get as an HP Channel Partner
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VAC-B07.GAL
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..pictureA:\VAC\VAC-B07.GAL,65535,49151,1,37,13,
By teaming with HP, the Channel Partner has the opportunity to work
with the number one company (products, customer service, and standards-
based computing), to select from a broad range of products, and have
access to a variety of indirect channels programs. With HP's strengths
and the Channel Partner's vertical market expertise, HP has the
greatest opportunity to provide end-user customers with the best
solutions in the market.
.PA
HP's Commitment to Channel Partners
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VAC-C01.GAL
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..pictureA:\VAC\VAC-C01.GAL,65535,49151,1,37,13,
Commitment
----------
HP's success in indirect channels is based on our ability to partner
with third-party vendors that have expertise in various vertical
markets. This section provides quotes from Franz Nawratil and Lew
Platt who each express HP's need to extend beyond our single
organization to provide customers with total solutions.
Excerpts from VARBUSINESS magazine show HP's #1 rating for the past
five years over our competitors, the survey categories in which HP
received first place, and a quote from the Annual Report Card Review.
The pie charts are designed to show HP CSO's historical success with
the indirect channel and its forecast for continual success with a
projected growth of 22 percent CAGR in the next five years.
.PA
HP Business Positioning
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VAC-C02.GAL
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..pictureA:\VAC\VAC-C02.GAL,65535,49151,1,37,13,
Franz rallies behind diverse channels because they allow HP products to
be delivered to all types of businesses, from the very large to the
very small.
This quote was extracted from his October 1991 speech entitled
"Changes, Channels & Churning on the Way to the Information Age."
.PA
HP Business Positioning (cont.)
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VAC-C03.GAL
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..pictureA:\VAC\VAC-C03.GAL,65535,49151,1,37,13,
This Lew Platt quote was taken from the July 1992 UniForum Monthly
magazine. The title of the article is "From Measurement to Computing."
In the interview Lew was asked, "What results do you expect from the
workstation-reseller program you are starting?" The quote above is his
response.
This quote indicates HP's current indirect sales volume and its
anticipated growth over time.
.PA
Indirect Channels Strategic Focus
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VAC-C04.GAL
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..pictureA:\VAC\VAC-C04.GAL,65535,49151,1,37,13,
VMC's vision is to own the greatest mind and market share of our
Channel Partners; therefore, our mission is to develop and deliver the
best channel programs that are competitive and profitable for HP and
our Channel Partners.
.PA
HP Computer Systems Organization's Channels Strategy
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VAC-C05.GAL
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..pictureA:\VAC\VAC-C05.GAL,65535,49151,1,37,13,
o HP's use of indirect channels allows our products to be sold to
individual users, small or large businesses, and niche markets.
o Leveraging Channel Partners include independent software vendors
(ISVs) and systems integrators (SIs) that jointly sell their solutions
with HP's direct sales reps. Resellers include SIs, value-added
resellers (VARs), and original equipment manufacturers (OEMs) that sell
to end-user customers.
o Two-tier Channel Partners include distributors, franchisors, and
master VARs that buy products from HP for resale to second-tier
resellers (distributor-authorized resellers [DARs] and franchisees)
that sell to end-user customers. Sometimes OEMs buy their HP equipment
from two-tier Channel Partners.
o Within a two-tier structure the first tier handles pricing,
equipment availability, integration capability, training, support,
tools, marketing, financing/credit, and the recruiting of second-tier
resellers. Second-tier resellers are responsible for delivery, end-
user customer satisfaction, and added value.
(Note: This slide does not include CPO strategy.)
.PA
HP's Indirect Channels Structure
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VAC-C06.GAL
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..pictureA:\VAC\VAC-C06.GAL,65535,49151,1,37,13,
HP's commitment to Channel Partners is demonstrated through the various
groups that interface with them. The Channel Partner sales account
manager (field sales rep) is responsible for recruiting and promoting,
VAC marketing develops and implements various channel programs, and the
sponsoring entity provides industry marketing expertise.
Indirect channels are a cost-effective method for HP to have the
broadest market reach, which gives individual users or large businesses
the convenience of buying standard products from an array of sources.
.PA
HP's Sales Force Deployment
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VAC-C07.GAL
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..pictureA:\VAC\VAC-C07.GAL,65535,49151,1,37,13,
This slide shows how HP deploys its sales force and how HP depends on
its Channel Partners' expertise and added value to penetrate customer
accounts.
o Within the field:
áááááThe Industry/Account Management team (red) sells into named
accounts in selected strategic industries. HP EUSRs team with HP
Channel Partners to leverage total solutions (hardware, software,
service/support) into end-user customer accounts.
áááááThe Territory Management team (blue) sells into accounts (non-
named accounts) within a geography. They also team with HP Channel
Partners to leverage total solutions into end-user accounts.
áááááThe Channel Partner Sales Account Manager (green) manages HP
Channel Partners as an assigned rep or as a telesales rep.
o ISV, SI, and VAR sales reps team with HP EUSRs to target selected
strategic accounts.
o HP depends on ISVs, SIs, and VARs to provide vertical market
expertise to the sales process.
o SIs supply custom solutions and project management services.
o OEMs sell independently of HP EUSR. The OEM's end product reflects
the OEM's identity rather than HP's. OEMs determine their target
accounts/markets which may parallel HP's geographic and named accounts.
o HP EUSRs pass leads to DARs, CWRs, ISVs, VARs, and SIs.
o DARs and CWRs may sell into major accounts and geographic accounts.
.PA
HP's Account & Channel Strategy
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VAC-C08.GAL
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..pictureA:\VAC\VAC-C08.GAL,65535,49151,1,37,13,
This slide is an overall graphic of HP's account and channel strategy.
o Account management of specific named accounts in strategic
industries is handled by HP industry/account SRs who team with Channel
Partners to leverage total solutions (hardware, software,
service/support) into named, end-user customer accounts.
o Channel Partners are managed by Channel Partner sales reps who
provide direct support or telephone support from HP's Telesales Center.
The management criteria is based on sales leveraged by the Channel
Partner.
o All Channel Partners are associated with HP through direct
contractual agreements or, in the case of DARs, through certification.
.PA
HP's Success Depends on Yours
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VAC-C09.GAL
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..pictureA:\VAC\VAC-C09.GAL,65535,49151,1,37,13,
This pie chart expresses the importance of indirect channels to the
overall success of HP's business. The chart includes CSO business sold
through indirect channels worldwide.
o "Direct" includes HP EUSR sales.
If CPO products were included, Channel Partners would account for 59
percent of HP's computer sales. HP's commitment is paying off!
.PA
HP's Success Depends on Yours (cont.)
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VAC-C10.GAL
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..pictureA:\VAC\VAC-C10.GAL,65535,49151,1,37,13,
Indirect channels will continue to increase HP's revenue share. By
1996, indirect channels are expected to grow by 22 percent for a total
of 60 percent. The 60 percent includes a 45-percent growth for
resellers and 15-percent growth for leveragers (ISVs and non-reselling
SIs).
This chart is CSO business only and includes worldwide sales.
(Note: CSO's worldwide revenue for 1991 was $3.4 billion and is
projected to double to $6.4 billion in 1996. In 1991, 51 percent of
the $3.4 billion was generated by HP's direct sales, 12 percent by
leveragers, and 37 percent by reseller channels.)
.PA
HP Rated #1 of Major Computer Vendors
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VAC-C11.GAL
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..pictureA:\VAC\VAC-C11.GAL,65535,49151,1,37,13,
This slide shows VARBUSINESS magazine's rating of HP against DEC, IBM,
and Sun. The annual survey reflects HP's superior VAR program ratings
from 1988-92 over our leading competitors.
VARBUSINESS surveyed VARs in two groups: VARs with over $2 million and
VARs with under $2 million in revenue. The bar graph reflects survey
results of VARs over $2 million; however, for VARs under $2 million, HP
scored 7.15 compared to DEC's 6.90, IBM's 6.74, and Sun's 6.55.
.PA
1992 VARBUSINESS Survey
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VAC-C12.GAL
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..pictureA:\VAC\VAC-C12.GAL,65535,49151,1,37,13,
This is a delineation of the categories that allowed HP to receive our
overall 7.46 score.
VARBUSINESS surveyed VARs in two groups: VARs with over $2 million and
VARs with less than $2 million in revenue. This list reflects survey
results of VARs over $2 million; however, VARs under $2 million ranked
HP first in product breadth, product quality, and end-user support.
o The under $2 million VARs placed HP ahead of DEC, IBM, and Sun in 10
out of 18 categories.
o The over $2 million VARs placed HP ahead in 15 categories.
o HP had 13 first place wins overall, IBM had 2, and DEC and Sun did
not finish first in any category with either group.
.PA
Why Choose HP?
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VAC-C13.GAL
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..pictureA:\VAC\VAC-C13.GAL,65535,49151,1,37,13,
This slide contains further testimony of VARBUSINESS magazine's
impression of HP according to HP VARs surveyed.
.PA
HP's Infrastructure for Channel Partner Support
************
VAC-D01.GAL
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..pictureA:\VAC\VAC-D01.GAL,65535,49151,1,37,13,
Infrastructure
--------------
This slide lists infrastructure and the responsibilities of HP sales,
sponsoring entities, and the Value-Added Marketing Center for HP
Channel Partner support.
.PA
HP Organizations and Functions
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VAC-D02.GAL
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..pictureA:\VAC\VAC-D02.GAL,64586,49151,1,37,13,
Each of the three groups within the circles will be discussed in
detail.
This slide reflects the team work between field sales, VAC Marketing
Center, and the sponsoring entity. Each group provides a level of
marketing expertise to give full support to Channel Partners.
.PA
CSO/Americas
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VAC-D03.GAL
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..pictureA:\VAC\VAC-D03.GAL,65535,49151,1,37,13,
This is the CSO/Americas organizational chart. It indicates assigned
industries reporting to field industry sales:
o Bob Sudkamp has aerospace, electronics, automotive/heavy equipment,
and federal government industry groups
o Jerry Tartaglia has process manufacturing, financial services, oil
and gas, distribution, transportation, packaged goods, and chemical and
pharmaceutical industry groups.
o Bob Stringer has telecom, utilities, media, and publishing industry
groups
Territory and Channel Partner management teams report to Clark Straw.
Two industries, state and local government and education, also report
to Clark's organization.
Alan Nonnenberg is the Channel Manager and has responsibilities for
channel marketing programs.
.PA
CSO/Americas--Geography
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VAC-D04.GAL
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..pictureA:\VAC\VAC-D04.GAL,65535,49151,1,37,13,
CSO/Americas--Industry Sales/Discrete Manufacturing
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VAC-D04A.GAL
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..pictureA:\VAC\VAC-D04A.GAL,65535,49151,1,37,13,
.PA
CSO/Americas--Industry Sales/Process Manufacturing & Financial Services
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VAC-D04B.GAL
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..pictureA:\VAC\VAC-D04B.GAL,65535,49151,1,37,13,
CSO/Americas--Industry Sales/Telecom
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VAC-D04C.GAL
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..pictureA:\VAC\VAC-D04C.GAL,65535,49151,1,37,13,
.PA
Target Industries
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VAC-D13.GAL
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..pictureA:\VAC\VAC-D13.GAL,65535,49151,1,37,13,
Americas Industry Marketing group has marketing programs for each of
the industries listed in this slide. HP sells into named accounts
within these industries through its direct channel (HP EUSR) teaming
with Channel Partners. HP has leveraged many systems within each named
HP industry, thus generating a loyal customer base. HP has and will
continue to develop Channel Partner relationships to leverage
additional sales within each of these industries.
.PA
INSERT FIELD ORG CHART HERE
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VAC-D05.GAL
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..pictureA:\VAC\VAC-D05.GAL,65535,49132,1,37,13,
.PA
Channel Partner Account Manager
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VAC-D07.GAL
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..pictureA:\VAC\VAC-D07.GAL,65535,49151,1,37,13,
The field is responsible for:
o being the primary contact for the Channel Partner
o tracking and administering contracts within HP
o promoting Channel Partners locally
o conducting local seminars
o promoting Channel Partners to customers and within HP
o being the primary owner of Channel Partner recruitment and
management
.PA
CSO/Americas Channels Program
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VAC-D08.GAL
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..pictureA:\VAC\VAC-D08.GAL,65535,49151,1,37,13,
This is an organization chart of channel marketing under Alan
Nonnenberg.
.PA
VAC Marketing Center
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VAC-D09.GAL
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..pictureA:\VAC\VAC-D09.GAL,65535,49151,1,37,13,
VMC administers and tracks the PSP program. It provides comprehensive
and industry-leading channel marketing programs:
o HP News Network (HPNN)
o advisory councils
o IMpact program
o PSP program
o conferences and events
VMC also manages and develops indirect channels:
o Distributor program management
o CWR program management
o ISV, VAR, and SI program management
.PA
Computer Systems Organization
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VAC-D10.GAL
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..pictureA:\VAC\VAC-D10.GAL,65535,49151,1,37,13,
The sole purpose of this slide is to present a generic view of a CSO
organization that supports HP Channel Partners. The group or divisions
could be WSG, CSY, or GSY (each of these organizations' org charts are
more complex than the simple illustration given above).
Within the CSO group each division's marketing unit provides product
marketing and indirect channel marketing. The sponsoring entities
identify which Channel Partners to recruit, provide account support,
and promote Channel Partners to industry/account (red) and territory
(blue) sales reps.
.PA
Sponsoring Entity
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VAC-D11.GAL
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..pictureA:\VAC\VAC-D11.GAL,65535,49151,1,37,13,
A sponsoring entity provides the above functions from the Workstation
Systems Group (WSG); Systems and Servers Group that contains CSY, GSY,
and CCSY; and Americas Sales/Marketing that contains Industries
Marketing. Sponsors define the HP target markets and align Channel
Partners into them. Sponsors also:
o identify Channel Partners for recruitment
o develop annual comarketing plans with the field
o create industry awareness programs
o generate training and sales tools (overall market)
o launch industry lead-generation programs
o leverage new HP technology within Channel Partner market segments
o represent Channel Partners to HP end-user customers at factory
visits
.PA
Target Industries--GSY
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VAC-D14.GAL
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..pictureA:\VAC\VAC-D14.GAL,65535,49151,1,37,13,
GSY targets a subset of industries targeted by the Americas Industry
Marketing group. GSY also targets corporate applications.
GSY's core industries are manufacturing and telecom. Its leveraged
industries are retail, financial services, and corporate applications.
HP has and will continue to develop Channel Partner relationships to
leverage additional sales within each of these industries.
.PA
Target Industries--CSY
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VAC-D15.GAL
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..pictureA:\VAC\VAC-D15.GAL,65535,49151,1,37,13,
This slide lists strategic target market segments for the HP 3000.
CSY's objective is to develop and recruit a competitive portfolio of
high-quality Channel Partners to support HP 3000 business strategies.
CSY wants to grow current Channel Partners and recruit additional
mainframe applications to enable easy migration for customers to the HP
3000.
HP has and will continue to develop Channel Partner relationships to
leverage additional sales within each of these industries.
.PA
Target Applications
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VAC-D16.GAL
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..pictureA:\VAC\VAC-D16.GAL,65535,49151,1,37,13,
Unlike the other two divisions, WSG targets application areas rather
than target industries. The slides list strategic applications for
HP's workstation Channel Partners. Many of the application areas cross
over multiple industries (i.e., GIS applications are strategic for
state and local government and can also be sold into retail, telecom,
education, and federal markets).
HP has and will continue to develop Channel Partner relationships to
leverage additional sales within each of these application areas.
.PA
HP's Industry Marketing Presentation
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VAC-D17.GAL
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..pictureA:\VAC\VAC-D17.GAL,65535,49151,1,37,13,
If industry marketing programs will be discussed, replace this anchor
slide with that slide pitch.
.PA
Flexible Channel Partner Relationships
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VAC-E01.GAL
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..pictureA:\VAC\VAC-E01.GAL,65535,49151,1,37,13,
Flexible Relationship
---------------------
This section defines HP's various indirect channels: ISV, SI (non-
reselling and reselling), VAR, OEM, CWR (independent, franchisor, and
franchisee), distributor, master VAR, and DAR.
(Note: CSO Channel Partners are those partners whose solutions are
delivered on CSO platforms: HP 3000, HP 9000 Series 800, HP 1000, HP
Apollo 9000 RISC and Motorola workstations, X Stations, and hardware
and software products associated with these platforms. These slides do
not include the channels within CPO.)
.PA
HP Channel Partner
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VAC-E02.GAL
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..pictureA:\VAC\VAC-E02.GAL,65535,49151,1,37,13,
We have examined HP's company and product strengths and our commitment
to indirect channels. Now it is time to examine what HP expects from a
Channel Partner.
HP teams with companies that adhere to the attributes listed in this
slide.
.PA
Types of HP Channel Partners
************
VAC-E03.GAL
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..pictureA:\VAC\VAC-E03.GAL,65535,49151,1,37,13,
Summary of HP Channel Partners:
o Leveragers' value-added software or services may be essential to the
selling of HP systems in particular end-user accounts. Leveraging
Channel Partners also include reselling SIs or VARs acting as ISVs.
o Reselling Channel Partners are either one-tier, selling directly to
end-user customers, or two-tier, reselling HP equipment to second-tier
vendors that sell directly to end-user customers.
o OEMs can purchase HP products directly from HP or from two-tier
Channel Partners.
o DARs purchase HP products from distributors or master VARs and
resell to end-user customers.
Definitions for each Channel Partner are outlined in slides VAC-E04 -
08.GAL.
.PA
Leveraging Channel Partners
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VAC-E04.GAL
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Leveraging Channel Partners market their solutions with HP SRs.
o ISVs and non-reselling SIs are referred to as leveragers because
their added-value software or services assist in selling HP systems.
ISVs develop and market computer software products and associated
support services that are used in conjunction with HP's products.
Leveragers' application software can be standard or customized.
Leveragers' software products can include databases and 4GLs.
o Conversion specialists provide conversion services and associated
support services that may be used in conjunction with HP's products.
o SIs team with HP to develop custom software solutions in response to
customer specifications. A custom solution is an integration of
hardware, software, and project management services that an SI uniquely
designs for a specific project and does not offer for general
commercial sale. HP provides the HP products directly to end-user
customers.
Leveraging Channel Partners may team directly with HP EUSRs or with
HP's two-tier Channel Partners to leverage HP sales into end-user
customer accounts.
.PA
Reselling Channel Partners
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VAC-E05.GAL
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..pictureA:\VAC\VAC-E05.GAL,65535,49151,1,37,13,
VARs sell standard or customized solutions to end-user customers. VARs
can conduct business in any market with any size customer. Even though
VARs typically resell HP equipment to end-user customers, they can act
as ISVs when customers choose to acquire equipment directly from HP.
SI customers are either government (federal, state, local) or part of
private industry. An SI assumes one of three roles with respect to HP
for a given project:
o prime contractor or lead systems integrator--The SI buys HP products
required for a specific project from HP and resells them to the
customer under the terms of a SI Project Agreement or HP Purchase
Agreement.
o subcontractor--The SI provides all deliverables to HP under a
subcontractor agreement for each project.
o software supplier--The SI and HP supply their respective project
deliverables under separate contracts.
OEM customers are typically outside HP's identified markets and
industries.
Independent CWRs have direct relationships with HP and end-user
customers.
.PA
Two-Tier Reselling Channel Partners--CWRs
************
VAC-E06.GAL
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..pictureA:\VAC\VAC-E06.GAL,65535,49151,1,37,13,
o The first-tier CWR is a franchisor that has headquarters location,
national focus, and provides affiliation/distribution to a franchisee.
o The second-tier CWR is a franchisee that is an authorized outlet of
the franchisor. The franchisee CWR has a restricted area (major
trading area) in which to sell workstations. Also, the franchisee CWR
must provide local direct customer support.
CWRs have access to multiple third-party software solutions that are
horizontal or vertical in scope.
CWRs have direct contractual agreements with HP to sell a minimum of
$250 thousand per year and to train their SRs and SEs on HP
workstations.
.PA
Two-Tier Reselling Channel Partners--Distributors
************
VAC-E07.GAL
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..pictureA:\VAC\VAC-E07.GAL,65535,49151,1,37,13,
o A distributor is a first-tier HP Channel Partner who has a regional
or national focus. Distributors may have multiple sales offices,
maintain substantial inventories, and provide complete infrastructure
to DARs.
o A DAR is a second-tier Channel Partner authorized by HP to deal with
a first-tier distributor from which it purchases its equipment and
receives all marketing support. A DAR does not have a direct
contractual agreement with HP, but it is certified by HP. A DAR's
marketing focus may be regional or national. A DAR's value-add
provided to end-user customers includes vertical software application
expertise, a high degree of technical skills, and customization.
VARs and OEMs may purchase equipment from distributors or from HP.
Distributors and the equipment they resell is listed on slide VAC-
E09.GAL
.PA
Two-Tier Reselling Channel Partners--Master VARs
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VAC-E08.GAL
************
..pictureA:\VAC\VAC-E08.GAL,65535,49151,1,37,13,
A Master VAR ensures broad availability of a basic solution capability
to a set of captive second-tier resellers. Master VARs' value-added
products that are resold to DARs usually include software.
Master VARs provide unique marketing and software pass-through.
Master VARs and the products they resell is listed on slide VAC-
E09.GAL.
.PA
CSO Two-Tier Channel Partners
************
VAC-E09.GAL
************
..pictureA:\VAC\VAC-E09.GAL,65535,49132,1,37,13,
This chart reflects the current distributors, franchisors, and master
VARs and the products they resell to DARs and CWRs.
.PA
Financial Highlights
************
VAC-F01.GAL
************
..pictureA:\VAC\VAC-F01.GAL,65535,49151,1,37,13,
Financial Incentive
-------------------
This section covers the financial highlights for each Channel Partner.
.PA
Financial Highlights--ISVs
************
VAC-F02.GAL
************
..pictureA:\VAC\VAC-F02.GAL,65535,49151,1,37,13,
Upon shipment, ISVs receive the lesser of 7 percent of the net HP
systems ordered or 30 percent of the software sold. Three percent of
net hardware value is applied to co-op fund first and the balance in
cash.
o Compensation is given if the application software is at least
$6,000.
o Minimum annual hardware leverage must exceed $250 thousand.
o Maximum annual compensation payable is $250 thousand.
o Compensation is available only on computer systems products.
o If multiple ISVs are involved, compensation is shared in amounts
proportional to the price of each software package.
ISVs need to apply for all leveraged compensation. Reimbursable co-op
activities include:
o marketing and promotional activities
áááááprint advertising
ááááásignage
ááááádirect mail and sales literature
ááááátrade shows
áááááradio advertising
ááááápublic relations resources
áááááyellow pages advertising
ááááátelemarketing
ááááápromotional merchandise
ááááásale incentives
áááááspecial requests
ááááácustomer seminars and open houses
ááááásales videos, electronic media, and television and cable
advertising
o business development activities
ááááámarketing and business consulting
áááááHP manuals and documentation services
áááááHP demo/development units and HP service and support
ááááátraining and conferences
ISVs are eligible to apply for lease/bundled financing. Channel
Partners that have their products highly rated by a sampling of their
end-user customers may be eligible to pass on the benefits of HP
financing programs to their customers.
Channel Partners can rent rather than purchase demo/development systems
at the rate of three percent of the HP list price per month. This
allows them to have use of the latest HP technology at exceptionally
low rates. The minimum rental time is six months.
.PA
Financial Highlights--Conversion Specialists
************
VAC-F03.GAL
************
..pictureA:\VAC\VAC-F03.GAL,65535,49151,1,37,13,
Conversion specialists are non-resellers. Upon shipment, specialists
receive six percent of the net HP systems purchased. The first three
percent is applied to co-op fund and the balance in cash.
o Maximum payment per conversion is $50 thousand.
o Sales to the U.S. Government are not eligible.
Specialists need to apply for all leveraged compensation. Reimbursable
co-op activities include:
o marketing and promotional activities
áááááprint advertising
ááááásignage
ááááádirect mail and sales literature
ááááátrade shows
áááááradio advertising
ááááápublic relations resources
áááááyellow pages advertising
ááááátelemarketing
ááááápromotional merchandise
ááááásales incentives
áááááspecial requests
ááááácustomer seminars and open houses
ááááásales videos, electronic media, and television and cable
advertising
o business development activities
ááááámarketing and business consulting services
áááááHP manuals and documentation
áááááHP demo/development units and HP service and support
ááááátraining and conferences
The ISV is given six percent of the net HP system revenue if 1) the ISV
has a current software license with a customer covering competitor's
computer system and 2) actively assists HP in replacing the
competitor's system with an HP system. In this case, no new software
revenue is necessary as evidence to secure incentive compensation.
.PA
Financial Highlights--VARs
************
VAC-F04.GAL
************
..pictureA:\VAC\VAC-F04.GAL,65535,49151,1,37,13,
VARs are compensated for both reselling and leveraging (VARs acting as
ISVs) activities. Leveraging VARs are compensated for a qualifying
system sale based on the lesser of 6 percent of the net selling price
of the hardware or 30 percent of the software sold. For VARs acting as
ISVs, three percent of net hardware value is applied to co-op fund
first and the balance in cash.
IMpact accruals (three percent of previous month's net shipments) will
automatically be credited to VAR accounts each month. Reimbursable co-
op activities include:
o marketing and promotional activities
áááááprint advertising
ááááásignage
ááááádirect mail and sales literature
ááááátrade shows
áááááradio advertising
ááááápublic relations resources
áááááyellow pages advertising
ááááátelemarketing
ááááápromotional merchandise
ááááásales incentives
áááááspecial requests
ááááácustomer seminars and open houses
ááááásales videos, electronic media, and television and cable
advertising
o business development activities
ááááámarketing and business consulting services
áááááHP manuals and documentation
áááááHP demo/development units and HP service and support
ááááátraining and conferences
VARs are eligible to apply for lease/bundled financing. Channel
Partners that have their products highly rated by a sampling of their
end-user customers are eligible to pass on the benefits of HP financing
programs to their customers.
Channel Partners can rent rather than purchase demo/development systems
at the rate of three percent of the HP list price per month. This
allows them to have use of the latest HP technology at exceptionally
low rates. The minimum rental time is six months.
.PA
Financial Highlights--SIs
************
VAC-F05.GAL
************
..pictureA:\VAC\VAC-F05.GAL,65535,49151,1,37,13,
SIs are compensated for both reselling and leveraging (SIs acting as
ISVs) activities. Leveraging SIs receive seven percent on the net
hardware as long as the ratio of solution/service to HP products is one
to one. For SIs acting as ISVs, three percent of net hardware is
applied to co-op fund first and the balance in cash.
IMpact accruals (three percent of previous month's net shipments) will
automatically be credited to SIs accounts each month. Reimbursable co-
op activities include:
o marketing and promotional activities
áááááprint advertising
ááááásignage
ááááádirect mail and sales literature
ááááátrade shows
áááááradio advertising
ááááápublic relations resources
áááááyellow pages advertising
ááááátelemarketing
ááááápromotional merchandise
ááááásales incentives
áááááspecial requests
ááááácustomer seminars and open houses
ááááásales videos, electronic media, and television and cable
advertising
o business development activities
ááááámarketing and business consulting services
áááááHP manuals and documentation
áááááHP demo/development units and HP service and support
ááááátraining and conferences
Channel Partners can rent rather than purchase demo/development systems
at the rate of three percent of the HP list price per month. This
allows them to have use of the latest HP technology at exceptionally
low rates. The minimum rental time is six months.
.PA
Financial Highlights--OEMs
************
VAC-F06.GAL
************
..pictureA:\VAC\VAC-F06.GAL,65535,49151,1,37,13,
Financial Highlights--Francisors
************
VAC-F07.GAL
************
..pictureA:\VAC\VAC-F07.GAL,65535,49151,1,37,13,
.PA
Financial Highlights--Distributors
************
VAC-F08.GAL
************
..pictureA:\VAC\VAC-F08.GAL,65535,49151,1,37,13,
.PA
HP Channels Qualification Criteria
************
VAC-F10.GAL
************
..pictureA:\VAC\VAC-F10.GAL,65535,49151,1,37,13,
The financial highlights section covered what Channel Partners get from
HP. This section outlines the qualifications Channel Partners must
meet to get those benefits.
.PA
ISV
************
VAC-F11.GAL
************
..pictureA:\VAC\VAC-F11.GAL,65535,49151,1,37,13,
Even though there is not a minimum volume commitment to become an ISV,
to receive compensation there is a minimum leverage requirement of $250
thousand. Additional details of the ISV compensation program are in
the DFI slide set, marked JSW1-4, that was distributed at the June 1992
sales conference. Copies can be obtained from Phil Enliss' group.
A qualifying product may include any standard product option or
customization of a standard option. Software sold by an ISV to its
parent company, division, or majority-owned subsidiary will no qualify
for fee payments.
The ISV will be paid a fee for a qualifying system sale by HP if the
sale meets the following criteria:
o The ISV makes a direct sale or license of standard software package
to a specific end-user customer for use on an HP computer system.
o HP makes a direct sale, lease, or license of a qualifying HP
computer system to that end-user customer.
o HP makes a direct sale, lease, or license of a qualifying HP
computer upgrade to that end-user customer.
o Computer system or upgrade delivery occurs no more than 12 months
following the initial date of the end-user purchase order.
o HP determines the ISV's software product satisfies the end-user
customer's primary application needs.
o The software package is a material and essential factor in the end-
user customer's decision to purchase the HP system or upgrade.
o The ISV provides HP with an executed copy of the purchase
order/software license agreement between the ISV and end-user customer
indicating a total adjusted net price of a least $6,000
o The ISV's influence is a material and essential factor in causing an
end user to convert from a non-HP platform to HP. The ISV also
qualifies if it provides conversion services to enable the end-user
customer to employ HP platform products.
o Software support includes installation support, documentation,
training, and timely response to software faults and bugs.
Discuss the fee payment clauses: when HP determines the fee will be
split between multiple ISVs, the calculations HP uses (7 percent and 30
percent), when HP reserves the right to withhold payments, if the end
user has the right to make multiple copies of the software, and so
forth.
The ISV is paid 30 days following either the date HP ships the CPU to
the customer or the date all documentation required for payment of a
fee is received by HP.
The ISV is an independent contractor. Discuss the relationship clause.
Also discuss the terms of terminating the contract. The ISV agreement
is terminated one year from its effective date. Either party may
terminate any exhibit or the entire agreement without cause upon 60
days' written notice to the other.
.PA
Conversion Specialist
************
VAC-F12.GAL
************
..pictureA:\VAC\VAC-F12.GAL,65535,49151,1,37,13,
The Conversion specialist provides conversion services and associated
support services that may be used in conjunction with HP products.
The specialist must provide HP with satisfactory evidence that the
software package was actually converted by the specialist and satisfies
a major application need. HP determines that the converted software
package satisfies the end-user's major application requirements.
The delivery of the computer system occurs not more than six months
following the date of the end-user's initial purchase order.
.PA
VAR Channel
************
VAC-F13.GAL
************
..pictureA:\VAC\VAC-F13.GAL,65535,49151,1,37,13,
If a VAR wants to act as an ISV, refer to the ISV qualifications on
slide VAC-F11.GAL.
.PA
Systems Integrator Channel
************
VAC-F14.GAL
************
..pictureA:\VAC\VAC-F14.GAL,65535,49151,1,37,13,
.PA
OEM Channel
************
VAC-F15.GAL
************
..pictureA:\VAC\VAC-F15.GAL,65535,49151,1,37,13,
o There is a minimum annual volume commitment of $400 thousand list to
qualify as an OEM.
o The OEM agrees to assume sole responsibility for marketing HP
products it has purchased from HP.
o The OEM is offered no sales or marketing assistance from HP in
conducting its business.
o The OEM is responsible for maintaining support services for the
added value portion of the system.
o The OEM should submit in writing to HP any proposed product
modifications that might affect either the performance, safety, or
radiated emissions certifications of the product.
.PA
Franchisor Channel
************
VAC-F16.GAL
************
..pictureA:\VAC\VAC-F16.GAL,65535,49151,1,37,13,
o HP approves each location that the franchisor is authorized to
sell/ship to.
o The franchisor is expected to promptly respond to all inquiries and
request for technical support for HP products from its locations.
o The franchisor also agrees to promptly forward all technical, sales
and promotional materials, price lists, and other documents furnished
by HP for reshipment to its locations.
o The franchisor is required to maintain accurate records for contract
compliance verification, product safety information, and
sales/marketing support programs.
.PA
Certified Workstation Reseller
************
VAC-F17.GAL
************
..pictureA:\VAC\VAC-F17.GAL,65535,49151,1,37,13,
o Authorization is approved at the location level.
o Value-add typically includes network integration and multiple third-
party software solutions.
o Each location must have at least one employee who has achieved
Novell ONE or equivalent.
o Support must be provided on a face-to-face basis.
o The CWR must limit promotional activities and either ship or invoice
all products to customers within MTA defined by Rand McNally.
o Investment to get into the program is over $25 thousand in the first
year, based on the following cost:
ááááááááááááááááááááááááááááááááááááááMonthly Channel
ááááááááááááááááááááááááááááááááááááááPartner Rental First year
Demo/Support Unit and Support cost
-------------------------------------------------------------------
Hardware and software $40 thousand $1,200* $14,400
Hardware support 215** 1,935
Software support 245*** 2,205
Training (technical and sales):
ááTuition for (2) CWPs (2 wk class) 3,500/ea 7,000
ááTuition for (2) SRs (2 day class) 0 ____0_
áááááááááááááááááááááááááááááááááááááááááááááááááááááááá$25,540
* Channel Partner six-month rental at three percent of list per
month
** first three months hardware warranty
*** first three months software support complimentary if one year of
support purchased at time of hardware order
.PA
Distributor Channel
************
VAC-F18.GAL
************
..pictureA:\VAC\VAC-F18.GAL,65535,49151,1,37,13,
The distributor has experience in reselling computer equipment to
authorized resellers. The distributor agrees to provide or make
available ongoing technical support to end users of the products.
If the distributor's status changes with respect to mergers,
acquisitions, consolidations, or other reorganizations that are major
in scope, HP must be notified in writing prior to the intended date of
change.
The distributor agrees to make available ongoing technical support to
end users of the products. This includes DARs and the distributor's
own sales force. The distributor also agrees to:
o ensure that its employees complete any required training course
designated by HP
o fairly present the products to DARs
o confer with HP on matters relating to market conditions, sales
forecasting, and product planning
o report suspected product defects
o not pre-announce any products before an official public announcement
o make available promotional funds, allowances, and services paid to
the distributor through HP's co-op funds to and for the benefit of DARs
in proportion to the dollar volume of business and in conformance with
a business plan mutually agreeable to distributor and each DAR
A full 12-month volume level represents the distributor's estimated
volume of purchases throughout the term. A less than 12-month volume
level is calculated by prorating the distributor's volume of purchases
during that term.
Distributor order milestones will be assessed every six months. In the
first six months, if orders are less than 40 percent of the
distributor's 12-month volume level, the orders for the second six
months will be subjected to lower discounts.
o If the first six month's orders represent 50 percent or more of the
12-month volume level, orders during the remaining term of the
agreement may be subject to greater discounts if a greater discount is
available.
The payment terms are net 30 days from the date of HP's invoice. All
orders are placed via a purchase order with the following minimums:
o minimum hardware order = $5,000
o minimum hardware release and ship-to = $1,000
o minimum accessory order = $500
A distributor may return a quantity of products at the end of each
month whose value equals up to 10 percent of the net sales dollars
invoiced to the distributor and purchased during the preceding three-
month period if the distributor has purchased the products for
inventory only. Stock adjustment are given only if the products:
o are listed on the most current version of the product exhibits
o are procured by distributor directly from HP
o are listed on inventory reports
o are in unopened original packaging and marketable as new merchandise
o are not the same products already on order with HP and scheduled to
ship to distributor within 90 days of the return
The standard warranty period shall commence upon HP's shipment of the
products to distributor and terminate either 180 days after the date HP
ships the products to distributor or 90 days after shipment of the
products to the end user.
The distributor's relationship with HP will be that of an independent
contractor. Any commitments made to customers with respect to
quantities, delivery, modifications, interfacing capability, or
suitability will be the distributor's sole responsibility unless prior
written approval is obtained from HP.
The distributor shall send monthly reports to HP involving inventory
and sales. Inventory reports are provided for the purpose of price
protection and stock adjustment. They are due 10 days after the close
of each calendar month. Sales reports are due 10 days after the
distributor's fiscal month close.
Discuss HP's trademark, logos, and trade name agreements, and so forth.
.PA
DAR Channel
************
VAC-F19.GAL
************
..pictureA:\VAC\VAC-F19.GAL,65535,49151,1,37,13,
Each DAR is qualified separately and must execute the DAR certification
form.
The DAR will purchase products from a distributor. The products will
be incorporated in a system consisting of substantial amounts of other
hardware and/or software that the DAR manufactures, develops, or
licenses. The DAR will sell or lease to end users other than the DAR's
corporate parent, division, or any subsidiary of the corporate parent
in the regular course of business.
The DAR is required to sell:
o in the vertical market specified in the application
o in the geographical area specified in the application
o the added value described in the application
o with adequate, direct support
o to end-user customers located in U.S. for use in the U.S.
The DAR is an independent contractors engaged in purchasing HP products
for resale to their respective customers. Only DARs that have
completed the certification forms will be authorized to purchase HP
products from the distributor with which it applies. The certification
term is 12 months. If the relationship with the distributor is
terminated during the certification term, the DAR can change its
purchasing relationship to another distributor only once during the
remaining term.
Each DAR must maintain at least one SE on staff who has successfully
completed the required training for each HP product line carried. A
minimum of one year's experience in UNIX and, for HP RISC X Station
products, one year in networked computing environments is required.
The DAR must maintain an active HP support contract for each HP product
line carried or obtain equivalent technical support from the
authorizing distributor.
The DAR must maintain or have full access to a least one fully
functional HP system for each HP product line carried to be used for
demos, support, and training.
HP's co-op funds paid to distributors will be made available to and for
the benefit of DARs in proportion to the dollar volume of business and
in conformance with a business plan mutually agreeable to the
distributor and each of its DARs.
Unless prior written consent is obtained from HP, the DAR will not copy
or modify any HP materials supplied through the distributor with the
exception of software materials which may be copied for archival
purposes, to replace defective copies, or for program error
verification.
.PA
VAR to DAR Conversion
************
VAC-F20.GAL
************
..pictureA:\VAC\VAC-F20.GAL,65535,49151,1,37,13,
When a VAR converts to a DAR, it will have contact with a distributor
instead of direct contact with HP.
A VAR has a contractual agreement with HP. For DARs, however, the
contract is replaced with certification.
VARs have an annual commitment of $400 thousand list. DARs are not
restricted to a set dollar limit.
A DAR's targeted geographic area can be regional or national. On the
certification forms, the DAR needs to specify both its targeted
vertical market and geographic area. This information is not tracked
for VARs.
DARs are required to have trained SEs on staff to maintain their HP
products. They are also required to have access to a demo/development
system.
DARs do not qualify for PSP status; therefore all programs, with the
exception of IDEA! Rooms, associated with PSP are not available to
DARs. Those programs include:
o comarketing support
o joint marketing activities
o advisory council membership
o AT&T mailbox
o PressFAX
o PSP Insignia
o travel discounts
.PA
VAR to DAR Benefits
************
VAC-F21.GAL
************
..pictureA:\VAC\VAC-F21.GAL,65535,49127,1,37,13,
o HP's discount structure begins at $400 thousand for VARs. Low-
volume DARs ($50-399 thousand) may receive discounts from their
distributors.
o By ordering off-the-shelf systems from the distributor, DARs may get
faster delivery.
.PA
Marketing Programs for Channel Partners
************
VAC-G01.GAL
************
..pictureA:\VAC\VAC-G01.GAL,65535,49151,1,37,13,
Marketing Programs
------------------
This section covers the various programs within VAC. The programs are
designed to communicate, develop, and promote HP Channel Partner
solutions both internally and to end-user customers.
.PA
HP Channel Partner Program Levels
************
VAC-G02.GAL
************
..pictureA:\VAC\VAC-G02.GAL,65535,49151,1,37,13,
HP Channel Partners have two program levels for their solutions. A
solution is defined as a software product developed by the Partner, a
service provided by the Partner, or a combination of both.
Channel Partners may have a basic program level with HP, which is
called "Listed," or a more strategic level termed "Premier."
Premier Solution Partners (PSPs) receive the highest level of promotion
and marketing support from HP.
Any solution/service can be coupled with HP equipment ranging from
single-user workstations to high-end, multiuser systems.
.PA
Channel Partner Program Levels
************
VAC-G03.GAL
************
..pictureA:\VAC\VAC-G03.GAL,65535,49151,1,37,13,
This graphic shows the two program levels. Approximately 88 percent of
HP Channel Partners are in the "Listed" category and 12 percent are
PSPs.
Descriptions of each category follow.
.PA
"Listed" Program Level Services
************
VAC-G04.GAL
************
..pictureA:\VAC\VAC-G04.GAL,65535,49151,1,37,13,
The slide lists the basic requirements a Channel Partner must meet to
become "Listed" and the program benefits.
o programs available to all "Listed" Channel Partners:
áááááevents
áááááHP Computer Update magazine
áááááChanneLink
áááááKnow-How Marketing guide
ááááádatabase listing
áááááHP-TV service access
o programs unavailable to certain "Listed" Channel Partners:
áááááSolutions Catalog (Distributors, CWRs, OEMs)
áááááinput to advisory councils (DARs)
ááááápromotion within Computer News magazine (OEMs)
For all Channel Partners not listed in the second bullet, the other
benefits that should be stressed are the Solutions Catalog, promotion
within Computer News, and HP SR support.
.PA
Nomination Criteria for Premier Solution Partners (part 1 of 3)
************
VAC-G05.GAL
************
..pictureA:\VAC\VAC-G05.GAL,65535,49151,1,37,13,
Channel Partners are nominated to become a PSP by the field account
manager or sponsoring entity. The invitation is extended to Channel
Partners that meet the sets of qualifying criteria established by the
sponsoring entity.
Channel Partners that are strategic to HP's business objectives and
will contribute to HP's success are given the opportunity to
participate in this VAC program. Becoming a PSP is not an automatic
process; it is by invitation only.
.PA
Nomination Criteria for Premier Solution Partners (part 2 of 3)
************
VAC-G06.GAL
************
..pictureA:\VAC\VAC-G06.GAL,65535,49151,1,37,13,
.PA
Nomination Criteria for Premier Solution Partners (part 3 of 3)
************
VAC-G07.GAL
************
..pictureA:\VAC\VAC-G07.GAL,65535,49151,1,37,13,
Once the HP SR or sponsoring entity nominates a Channel Partner to
become a PSP, VAC Marketing Center ensures that the Channel Partner has
a current contract, is listed in the VALID database, has three
installed sites (two running HP hardware or at least six months in the
Americas and one must be in the U.S.), provides a comarketing plan, and
has an assigned SR and sponsoring entity. The PSP must be signed off
by the field (DM level) and sponsoring entity's functional manager.
.PA
Communications Programs
************
VAC-G08.GAL
************
..pictureA:\VAC\VAC-G08.GAL,65535,49151,1,37,13,
o Programs for Success is a customer overview of the HP VAC strategy
program using features/benefits and documents. It is useful to Channel
Partner prospects as an introduction to the general VAC program and to
current HP Channel Partner accounts as a program guide.
o HP Advisory Councils are forums where PSP executives and
distributors' executives (distributors cannot be PSPs) can meet with HP
executives and managers on a regular basis to resolve VAC issues.
There are five councils: MPE, Multiuser HP-UX, Workstations, SIs, and
Distributors. Each council is comprised of 8-12 executives. The
members are rotated every one to two years.
o ChanneLink provides Channel Partner employees with sales tools and
product information on a regular basis. To receive them an employee
must be identified in the VALID database with a "sales" code.
ChanneLink items include: price guides, configuration guides, sales
training manuals, Radio HP, and so forth.
o HPNN electronic information network provides a communications medium
to VARs and distributors that have valid HP contracts. These Channel
Partners can access order status, pricing information, electronic
messages, online documentation, and a news module that contains HP-
internal and competitive information. HPNN is up to date, easy to use,
and free of charge.
o HP Computer Update magazine is published monthly and contains
product, program, and promotional articles. The "HP Channel Partner
NEWs" insert has articles regarding HP VAC programs, HP product
promotions for the Channel Partners, and new HP literature. A Channel
Partner must have a current contract and be listed in the VALID
database to receive a subscription.
.PA
Development Programs & Events
************
VAC-G09.GAL
************
..pictureA:\VAC\VAC-G09.GAL,65535,49151,1,37,13,
o Technology Camps are technical symposiums targeted at channel
software developers. The camps are two days of intensive workshops
that are taught by teams of HP technical experts. They are geared to
help experienced software developers expand their skills with HP
operating systems.
o HP product training courses and materials help Channel Partner
employees get the most from their HP equipment and increase
productivity. HP will work with Channel Partners to determine the
optimal combination of HP educational offerings to help their technical
staffs become as effective and productive as possible. There is self-
paced and classroom training.
o Know-How Marketing is a business and marketing planning guide. This
reference tool can assist in the development of business plans,
marketing plans, marketing communication tactics, advertising, direct
mail, telemarketing, public relations, trade shows, seminars, sales
literature, newsletters, graphic design field training manuals, and
electronic media.
o During the annual INTEREX (HP User Group) conference, HP sponsors a
Channel Partner's breakfast meeting. At the breakfast, Channel
Partners can hear presentations from special interest speakers and
interact with sponsoring entity representatives.
o Marketing Forums are open to all Channel Partners (with the
exception of DARs) and held on an as-needed basis. The forums'
objective is to deliver specialized workshops on developing marketing
tactics and strategic marketing plans.
o The HP Channel Partners Conference is held every one-and-a-half to
two years. The conference agenda includes general sessions discussing
trends (channel or industry), specialized workshops, and a tradeshow
event (promotion of solution/services). The conference objective is to
provide a forum for Channel Partners to network with other Channel
Partners and HP personnel.
.PA
Promotional Programs
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o The HP-TV Network can be accessed by HP Channel Partners that wish
to produce effective media communications to demo or market their
products. Channel Partners can hire HP-TV, HP's in-house service
organization, to produce sales videos and electronic media so Channel
Partners can demo their solutions to prospects, train their sales
forces on HP products, or target niche markets with direct-mail
fulfillment pieces. Television and cable advertising services are also
offered.
o Computer News is an HP magazine that promotes Channel Partners
internally within the company. It publishes Channel Partner success
stories and new or updated application information. Computer News is
produced twice per month and distributed to HP field and factory
personnel. Articles must be submitted by HP personnel.
o HP produces two solutions catalogs (MPE, MPE/XL and HP-UX Apollo
Domain/OS) containing detailed information about solutions, services
and tools provided by Channel Partners (and HP). The information is
indexed by company, product name, and market key words. The catalog
entry also provides Channel Partner employee contacts for further
information.
o IDEA! Rooms are standardized demo centers located around the country
that have the latest HP systems and peripherals. The IDEA! Room is an
ideal demo facility for a PSP Channel Partner to display its solutions.
The IDEA! Room serves as a repository for Partner software by providing
a centralized tape accessible from each demo location. The IDEA! Room
eliminates the need for the Channel Partner to have and maintain its
own demo sites. A PSP can be nominated for the IDEA! Room by its
Channel Partner rep or sponsoring entity to VAC. The PSP is mailed a
packet that must be completed and sent back along with a copy of its
software to the IDEA! Room Manager in Cupertino, California. The
Channel Partner is responsible for working out all software bugs either
over the phone or by sending someone to Cupertino. Demos are performed
by an HP EUSR or Channel Partner personnel.
o The VAB Rental Program allows Channel Partners to rent rather than
purchase demo/development systems at favorable rates and terms. Any
Channel Partner that leverages HP sales in the U.S. and has signed an
HP Development, Testing, and Demonstration Agreement is eligible to use
the HP VAB Rental Plan. There is a minimum rental time of six months.
After that time, a renewal on a monthly basis can be initiated or the
equipment can be returned or purchased.
o The Insignia Program allows Channel Partners wishing to promote
their association with HP to identify their special HP VAC Program
status graphically on their advertising and marketing communications
pieces. The insignias, which may not be modified, include HP Channel
Partner and Premier Solution Partner. The insignias camera-ready
artwork can be obtained from HP representatives.
o The IMpact co-op marketing program gives a Channel Partner a wide
variety of ways to receive reimbursement for marketing and business
activities. To be eligible for IMpact, the Channel Partner has to have
a current contract and a signed compensation agreement (e.g., CA
exhibit). The program is available to ISVs, VARs, SIs, and
distributors. Details on the IMpact program are in "IMpact SF 38
Training Slides" dated May 1992 and distributed at the June 1992 SF 38
training conference. The slides are IMPACT1-26.GAL with an additional
APPENDXA.GAL slide for distributors. DARs can receive co-op funds
though distributors. A separate program (Advantage) is available to
CWRs.
.PA
Leadership of IMpact Program
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Within the "InfoFlash" newsgram dated July 29, 1992, InfoCorp made this
quote regarding HP's leadership with the IMpact program. IMpact was
compared to Sun's and NCR/AT&T's cooperative marketing and
infrastructure programs. IMpact was deemed the leader.
.PA
IMpact Program
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The slides are IMPACT1-26.GAL with an additional APPENDXA.GAL slide for
distributors.
.PA
Marketing Assistance
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HP's marketing services are designed to assist the Channel Partner in
developing its company's grow and increasing its market share through
successful selling.
HP provides cooperative lead generation to Channel Partners at HP
funded trade shows. For example, a Channel Partner participating in an
HP-sponsored booth will be given software leads while HP maintains all
hardware leads.
A Channel Partner is eligible for HP marketing assistance based on its
program level ("Listed" or PSP) category.
.PA
Marketing Support Services
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This slide summarizes VMC's programs by program level and marketing
assistance given to each level. Everything listed for Channel Partners
is also available to PSPs, but items listed for PSPs are unique to that
category.
.PA
DAR Marketing Support Services Available
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This slide lists marketing support services that the DAR receives from
HP and the distributor.
.PA
HP's Product Value
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Product Value
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.PA
HP Computer Systems Organization's Products
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This slide lists the hardware platforms available to CSO's Channel
Partners.
.PA
HP's Strengths
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HP's industry strength and leadership are powerful motivators for
Channel Partners to do business with us. HP has received number-one
ratings for support worldwide:
o Datapro--minicomputers
o Ledgeway, UNIX Today--workstations
o Sierra Group--LANS, midrange systems
o IDC--overall support
o VARBUSINESS--Annual Report Card
o Fortune--quality of products/services
o INPUT--software support
o Datapro, Ledgeway--networks
.PA
Summary
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Summary
-------
.PA
HP's Program for HP Channel Partners Summary
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This slide summarizes the topics discussed in this slide pitch:
Financial Incentives
o Channel Partners are motivated to team with HP through competitive
discounts on hardware, demo/development systems, and rental equipment.
Their end-user customers can receive benefits of HP's financing through
the lease/bundled financing program. Channel Partners are reimbursed
for business and marketing activities through co-op funds.
Commitment
o HP is committed to indirect channels. Our commitment is
demonstrated throughout the organization, from top management down.
Illustrations of HP's commitment become obvious when VARs rate us
number one in a wide variety of categories in VARBUSINESS magazine's
survey.
o Nearly half of HP's business is generated through the indirect
channel. Our future projections indicate that over 60 percent of our
business will come from this channel. HP has targeted named accounts
in which to sell direct, and the remaining markets will be funnelled
through the indirect channel.
Infrastructure
o HP Channel Partners are recruited, developed, and managed by HP
teams that include channel sales reps, sponsoring entities, and the VAC
Marketing center. Every section of a team is structured to ensure
Channel Partner growth and success.
Product Value
o HP has received the number-one rating for support worldwide.
o HP is the leader in standards-based computing and open systems.
o HP products range from PCs to multiuser systems.
Flexible Relationships
o HP Channel Partners incorporate leveraging (ISV, SI) channels to
reselling channels in one- or two-tier relationships. There are a
total of 12 types of channel relationships within CSO.
o The qualifications for becoming a Channel Partner have be covered.
Marketing Programs
o VAC Marketing Center has a wealth of programs that are designed to
develop, promote, and communicate to Channel Partners. InfoCorp, a
market research firm, states that ". . . no comparable vendor of
computer systems has introduced a program that is as complete as
IMpact. It is flexible and comprehensive and should address many of
the needs of resellers and software suppliers. Hewlett-Packard has set
a new standard in programs for marketing workstations and multiuser
systems."
.PA
Appendix
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Appendix
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.PA
HP Sales Rep Compensation Program
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This compensation chart shows the Channel Partner how HP sales rep are
compensated for working with them.
.PA
Financial Highlights Recap
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This slide recaps compensations for leveraging and one-tier reselling
Channel Partners.
o When resellers act as leveragers (ISVs), they receive three percent
cash compensation, and the hardware volume discount is no longer
applicable.
o The annual CAP on compensation for a VAR acting as an ISV is $250
thousand maximum or two percent of commitment level.