HP’s off-the-charts $2.35B buy of 3Par is why Dave Donatelli gets the big bucks and you don’t. Mr. Donatelli, late of EMC, has big plans. But what are they?
We can tease out part of Donatelli’s worldview from the size of the bet.
- 3Par fills a big hole in HP’s lineup. EVA is aging. HDS is good, but it is unseemly for a major storage vendor to be reselling them – something that doesn’t bother IBM’s Global Services group.
- HP can’t compete with EMC unless it also offers a competitive full line of its own storage. EMC may have retreated a bit from the suffocating account control model of the 90’s, but they remain the kudzu of storage: give ’em an inch and they’ll take a mile.
- HP can ramp its moribund storage sales and marketing to compete with EMC. Otherwise that $2B is for naught.
Door #3 is Donatelli’s big challenge. No one else has been able to make HP’s massive sales force competitive with EMC, so the $2B question is: can Donatelli?
HP vs EMC
History: in a boneheaded move, HP signed an OEM deal in 1995 that gave EMC access to every one of HP’s top accounts. EMC wasted no time convincing HP customers that EMC was the storage expert, not HP.
An HP marketing guy justified the deal by pointing to all the margin dollars HP got for very little investment. Not to mention all the lost margin dollars ever since!
HP vs HP
In a big company with a direct salesforce the key to product success is not customer mindshare. It’s salesforce mindshare.
The salesforce and the sales engineers are in the trenches with the customers. They see the opportunities. They have the customer’s ear.
Donatelli’s problem is motivating HP’s salesforce to sell way more HP storage against tough competition from EMC, IBM, Oracle, NetApp and Dell. Coming from EMC, with its dedicated storage sales force, Donatelli lacks experience with a multi-line salesforce.
Which points to a problem with hiring EMC execs: they come from a unique culture. How?
- Dedicated storage salesforce: the different product lines have to compete for sales mindshare, but they are all talking storage. They aren’t shifting gears from middleware to blade servers while dealing with blowups in storage and services.
- Aggressive sales culture. Unlike most tech companies, EMC’s culture was formed in the low-tech, intensely competitive add-on memory business.
- Business-value – CIO/CFO – focused marketing and sales.
That isn’t HP.
The StorageMojo take
Many theories of the 3Par acquisition have surfaced. I take the acquisition at face value: HP (Donatelli) wanted 3Par for what it would do for HP – and against EMC – not because of what it would do to Dell.
Dell has a lot of work to do before it can sell big iron storage. They would have wasted most of 3Par’s assets.
Today’s question: how much of 3Par will HP waste? HP hasn’t done a good job of integrating prior acquisitions. Where are Lefthand and IBRIX?
Solving the sales problem is more critical than HP’s suffocating engineering processes. The engineers will eventually slog through the code reviews and release bureaucracy.
Convincing the sales force to spend time and bandwidth promoting storage is the hard part. Successful sales people are adept at making their numbers with the least possible effort and risk.
Right now, that’s blade servers, pizza-box servers, PCs and services. Not storage.
Sure, HP can adjust budgets and comp plans, but those are nudges, not orders. AFAIK no one has published on the diffusion of new product sales in large companies, but the process as I’ve studied it is arcane. Each sales office has to get comfortable selling and supporting the product, a process that takes time and a realistic battle plan.
Does Donatelli have the chops and the troops for the job? If he doesn’t, HP will fall even further behind EMC.
Courteous comments welcome, of course.