When Jos Brenkel shared his thoughts about the channel in his role as head of the European channel for Hewlett-Packard, resellers sat up and took notice.
They paid attention not only because Brenkel had the power to shape their businesses, but also because he usually says something worth listening to, and delivers his message with charisma.
When the time comes to look back on Brenkel's achievements, among them will be his involvement in pushing the channel from a role where it simply sat back and dealt with existing hardware-driven business to one where it understood that it had to proactively hunt out opportunities and add value and would only be rewarded by the vendor for doing the latter.
That legacy has helped to boost the credibility of the channel as it moves towards a consultancy and services-led business model, but it could have been very different, recalls Brenkel, who is now vice-president and general manager for the Middle East, Mediterranean and Africa regions at the Personal Systems Group.
"As we were going through the merger [with Compaq], I was given a choice: reinvent the channel or start a volume direct business. There was a much bigger opportunity to reinvent the model you were strongest in," he explains.
"Before the merger HP was a smaller player and in survival mode but 100 per cent channel. Dell was attacking us and Compaq was attacking us in the channel. The go to market was broken and we didn't have enough critical mass in the channel to change. Before the merger HP was too small."
Even with the decision made to build up the indirect business, Brenkel's
vision of increasing value for the vendor by rewarding primarily those that grew new business was greeted with some anger in the UK channel.
"Luckily I had very strong local management support. You don't know how many people contacted [Compaq chairman] Michael Capellas, and [HP CEO] Carly Fiorina asking them to throw me out," he says.
Brenkel was not only fortunate in having the backing of his country management teams across Europe, making his life as EMEA vice-president of the Solutions Partner
Organisation bearable, but those in the channel calling Fiorina for his head were unlikely to know he had a relationship with the CEO strong enough to withstand the criticism from the UK.
"Carly and I worked together in the US when she joined HP, and she always supported us in the channel.She said, 'We have to get this to work and we are not going to succeed unless it works'. Mark Hurd did the same when he came in."
A new business model
Having made his choice in favour of indirect, Brenkel took up the challenge of reinventing the channel, pushing a message about improving services and shifting the focus away from relying on hardware to driving sales and delivering revenues.
"There was a lot of arrogance because many people had made a lot of money with the old model and were not prepared to look at maintaining the business with another model. There is still 20% of the channel that is from yesterday's business and believes that any change in model is the vendor's problem," he says.
Brenkel is proud not only of the impact on the 80% who did get the message, but of the way that perceptions about the channel changed in the market and also
"We were really building a strategy that made a difference. Everyone said the channel was dead, but we built a healthy business model," he adds "Once you start being proud of your channel, with HP known for quality, then the channel starts to be known for the same level of quality."
It would be easy to link Dell's return to an indirect model as the evidence that HP did succeed in reinventing the channel, but Brenkel believes its rival would have been forced to turn away from its direct approach at some point because its ambitions could not be supported by its route to market.
"There is no way Dell could have succeeded because it only played in 30 per cent of the market and its sales coverage model had limitations. It woke up and realised the channel had sales proximity. But there are cultural issues, and how can you say after 10 years that my biggest enemy is now my friend?" he asks.
Focus on services
Although no longer involved with the day-to-day running of the European channel, Brenkel still has a message for resellers that builds on his services and solution vision.
"Small resellers have to lead on services, but many are still driven not by service but by hardware," he says.
Brenkel cannot understand dealers who walk away an opportunity simply because it involves only a low number of units.
"When a customer phones and says that he is looking for help, don't tell him that he is too small and that it is not cost-effective to take small guys and value add around the hardware. We have to build business around value add and not around hardware, and we are still not there."
If the channel is not careful, then the lucky recipients of their shying away from small orders will be the e-tailers.
"The e-resellers have picked up a lot of critical mass and they are more effectively using the online environment," he says.
Brenkel's frustration with resellers that build their business purely on hardware and volume is matched by his exasperation with some distributors who have failed to change their approach. As a result, not only are they missing out on the benefits that vendors have tried to create for them, but they are also failing to encourage resellers to change tack.
"Some distributors do add value and are not just logistics. Return on capital is the name of the game and the more they take in inventory, then the more they will battle to take a margin," he says.
The sign-off from Brenkel is to remind the channel of what it has become, as well as where it needs to go: "The channel is much healthier than it has been for a long time. Invest in driving a service solution to customers and be careful of continued
consolidation of hardware."
Like a number of senior management at Hewlett-Packard, Jos Brenkel has racked up his time at the vendor with 22 years of service. He started in his native South Africa and moved into IT after a spell in the advertising industry.
Brenkel started out at HP in marketing before taking a channel sales position. He then moved into marketing at Procurve for a few years, before transferring to California, where he was when the merger with Compaq took place.
Following the merger he was given the choice to take on the channel in Europe or build up a direct business. He chose the former and helped to create the Solutions Partner Organisation in Europe. In 2007, Brenkel became vice president and general manager for the Middle East, Mediterranean and Africa regions at the Personal System Group, being replaced in the European role by Antoine Barre.
Recognising his involvement with the channel in a crucial period of its development, Jos Brenkel was given a lifetime achievement award at the 2008 MicroScope Awards for Channel Excellence (ACEs).
The award is intended to mark a career that has influenced the channel in a positive sense. Although there was some opposition to the changes that Brenkel introduced, they were designed to increase the value resellers and distributors could offer.
In a rather apt moment, the HP representative who picked up the award for Brenkel, who was working in Cape Town on the night of the awards, was Dave Poskett, director of the solutions partner organisation, one of the country managers, whom Brenkel relied upon during his years running the European channel.
This was first published in August 2008