Services Marketplace Gets Cloudy

Everybody is talking this week about HP’s most recent service offering announcement,  HP Strategic IT Advisory Services, which the company says is designed to "help CIOs use IT as a key driver of innovation, growth and profitability." That’s because what this new offering provides sounds a lot like what channel partners provide to end customers, leaving many to wonder if HP is competing with its partners.

For instance the IT strategy and transformation calls for HP to work with clients to develop a comprehensive IT strategy and a transformation plan that details technology and capability requirements. Other services are strategic service management, enterprise architecture consulting, attaching

business value to IT to help make the case for new technologies, cloud readiness assessments, and M&A IT integration.

As The VAR Guy points out "all of the aforementioned services sound exactly like what channel partners for HP, or any other vendor, could be doing to help out an enterprise. So our resident blogger asks, Why is HP butting in?"

HP claims the new service is more about consulting on the business value of IT, and it told the VAR Guy that future offerings would incorporate services from channel partners.

ChannelTechCenter points out that " HP’s intent and the impact on its channel remain uncertain. HP is not Apple, which announced a competitive offering to its own channel last month and didn’t bat an eye about the message it sent to partners. HP relies on its channel and will likely take steps to smooth ruffled feathers or at the very least, offer an explanation. Wait and see."

But Apple’s competitive play for SMB customers last month surely isn’t the only time that vendors have sought to compete with partners. The channel’s history is full of direct-indirect conflict.

Everyone knows that unless a particular partner is considered a "franchise" partner, all in with one vendor, that partner is most likely to sell a solution made up of technology from more than one vendor – maybe servers from HP, switches and routers from Cisco, storage from EMC. But if HP goes in and consults with CIOs, the technology and services ultimately sold to the end customer are more likely to all come from a single vendor, HP.

And as more business goes to service sales and offerings after recognizing the margins that are possible with those businesses, the waters are bound to get muddier.

Consider Level Platforms CEO Peter Sandiford’s excellent series of blogs last year about Seven Megatrends that will shape the channel in years to come. His first megatrend is that large vendors will enter the IT services market.  He notes that some of these have a strong channel and channel relationships and will take pains not to offend partners. But there are others, he says (and he includes Dell in this group), that do not have a strong legacy as being channel friendly. These organizations are less likely to care about offending the channel.  But most would put HP in the camp of not wanting to offend its partners. As ChannelTechCenter points out, we just have to wait and see if HP makes good on its promise to include partners down the line.

 Meanwhile, Tiffani Bova, vice president at Gartner in charge of the IT channel, recently noted that it’s time for channel partners to get ready for a different kind of competitive environment. "You may think that you own the customer, but you don’t. The customer owns the customer," she told IT solution providers at Ingram Micro’s recent VTN Invitational conference.

And to get ready for the cloud and the new competitive environment all these experts agree that it’s time to specialize, to become an expert in a vertical and to differentiate.