Data is the currency tech companies now traffic in. Those that hold the data keys are in the driver’s seat, making the rules and shaping the road. That’s why so many of the 21st-century tech battles are, in one way or another, over control of the data.
Office equipment dealers are bumping up against this paradigm right now with HP’s new partner program, Amplify. I’ve been to two dealer events recently where there was a lively discussion and much debate around the program and the wisdom of participating at the “Power Services” level, which requires data sharing. At the crux of the controversy is a dealer’s customer information and its contribution to the foundation and worth of their business.
For those unfamiliar with the program, in 2020 HP announced a new partner program called “Amplify.” HP billed the program this way: “Built on a single, integrated structure, HP Amplify provides the insights, capabilities and collaboration tools needed to drive growth as digital transformation and customer purchasing behaviors continue to evolve.” The words “insights” and “collaboration tools” are an indication of the type of data HP might look for from their partners to help fuel the program, which we outline in this blog written shortly after the program was announced.
A key point to understand is that the Amplify program is a two-tiered program. The tier containing the vast majority of partners is the “Synergy” track. In this track, partners agree to buy and resell HP’s portfolio, meet some basic volume requirements, and participate in HP’s training and certification programs. Data sharing is not required in order to participate in this tier.
The Power Services track is much more involved and is built for resellers that are willing to invest and collaborate more with HP. Power track partners have access to all of HP’s services portfolio and delivery capabilities. HP will leverage data-driven insights to help them assess their business, develop joint business plans, invest in marketing, and share customer and sales insights.
What’s the big deal?
There’s a lot of concern being expressed within the dealer community over the data-sharing elements of the new program — specifically, customer data sharing. A dealer’s customer data is part of their IP – it represents a massive investment in prospecting, qualifying and sales, and then support and service. The data’s importance dictates the high level of protection it necessitates. Bob Goldberg, legal counsel for the BTA, has gone so far as to state that by turning that data over to a potential competitor (in this case HP), you are diminishing the value of your business.
Handing that information over to a partner without rock-solid assurances that the data will be protected, not used in ways other than indicated, and specifically not used to target dealer customers for direct sales efforts would be foolhardy.
And there are other issues. The office equipment dealer channel has a long memory. HP has been in and out of the channel multiple times over the years and not all of the interactions have been positive. HP has made significant inroads in the channel since buying the Samsung printer division in 2016 and has coupled that purchase with major channel partner investments. However, HP still consistently scores near the bottom on “trust” in BPO’s annual dealer survey — not an auspicious beginning for a new type of partnership based partly on trust.
The nuances of data
With so many questions and not a lot of clear answers, I contacted HP and asked to speak with Luciana Broggi, HP’s Global Head of Routes to Market, who is the HP executive quoted in the official program launch press release. I wanted some clarity on the record.
Broggi started by saying that sharing data with HP is not mandatory. It’s opt-in. Any partner who does not want to share the data with HP can just opt out. They remain Synergy partners and can continue to buy products from HP distributors and sell the products to their customers.
The partners who opt in and decide to have a more strategic relationship with HP will have a higher level of collaboration – they become part of HP’s Power Services partner tier. This means a couple of things at the Power Services level:
1) Better pricing.
2) Access to the full portfolio of managed products.
3) Higher level of compensation.
According to Broggi, HP also gives data back. She emphasized that HP is not collecting the data for the sake of collecting data and they fully understand how important data is in today’s environment. HP, she said, is collecting the data in order to be able to serve the customers in an entirely new way. Consumers have come to expect a level of frictionless service and intuitiveness that companies like Amazon deliver, and partners that can deliver tailored solutions to those expectations in the workplace will be very successful.
HP is calling the data they collect the “data pack,” and it includes the following:
- Customer information – not individual information but company data. HP says it does not ask for individual names at the company.
- Data of the sale – what units and products are sold
- Inventory levels
Broggi indicated that dealers are already sharing data with HP. She said about 80% of BTA partners have special pricing for custom deals crafted for bigger customers, and in order to get that pricing, they need to share the same data HP is requesting for the Power Services track. They’ve already been doing that for years on their biggest deals.
It is important to note that, according to Broggi, HP takes the data shared by the partner, enriches it, and gives it back. HP buys massive amounts of market research on an annual basis. It folds that research data in along with its own internal data, which it collects through supporting the channel with its internal team and dynamic pipeline management tools and combines all of it with the dealer data. This more complete and enriched data package is then given back to the dealer.
The goal, said Broggi, among other things, is to help their partners benchmark against the competition and win more deals. Included is descriptive information showing, for instance, that a partner grew 25% while the general market grew 20%, and comparing their inventory to the average so the dealer can benchmark their performance and standards with their competitors.
HP also shares predictive information centered around particular customer behavior and their propensity to buy certain products. HP has a lot of data around what customers are researching online, for example. Perhaps a customer has been looking at a certain equipment model number often or has been researching security information. HP will share that info with the partner so they can follow up with a sales call. HP, said Broggi, also shares prescriptive information. This can include informing partners of customers with warranties expiring in the next few months, along with the product number of the extended warranty so the sales team can easily follow up with an extension offer, or giving a partner a heads up on all the customers with an install date of more than five or seven years old and due for a refresh.
The biggest concerns dealers have with the new program are around how HP is using and protecting the data dealers share with them.
On the security side, it should come as no surprise that HP has implemented a lot of measures. Broggi explained that HP protects the data of their partners as they protect their own data, storing it in data lakes with cybersecurity controls that adhere to the strictest data security and privacy regulations. As a global company operating in pretty much every country in the world, Broggi said HP adopts the strictest standards as their baseline. When it comes to data security, European GDPR standards are stricter than many U.S. regulations, so the measures HP takes based on a global standard should exceed any U.S. requirement.
But here’s the big question — how can HP assure dealers they will not take this data and go sell directly to their customers?
Broggi explained it this way: HP’s business in the channel is 88% indirect. Broggi says HP has “no interest or intention to go and shoot ourselves in the foot. It’s completely illogical.” She emphasized that this top-tier program is with their best partners – the ones they would be least likely to jeopardize.
HP has 5,000 Power partners globally, out of the 200,000 in total that they manage worldwide. These Power partners represent their strongest relationships. They are clearly gearing to focus the bulk of their power on growing their relationship with them.
This article would not be complete without consulting with BTA’s legal counsel, Bob Goldberg. According to Goldberg, “The HP Amplify Program is a real threat to dealers.” In Goldberg’s opinion, it is giving away a sector of a dealer’s business without compensation. “Trust is great, but legal protections are best,” he said. There are three courses Goldberg suggests dealers consider.
1) Dealers insert in their maintenance/support agreements that they will not release customer information to third parties. This establishes a contractual bar to sharing the information. Suggested provision: “Dealer represents and agrees it will not disclose Customer Information to any third party for sales, marketing, or research purposes.”
2) Insist upon a non-disclosure agreement with HP that provides HP will not use the information provided for sales, marketing, or research purposes and will maintain the information as “Dealer Confidential Information.”
3) Take on a different A4 product.
To trust or not to trust?
That is the question. It does appear that most dealers that sell HP are already sharing data on their biggest deals with HP in any case. If you are already in or on the cusp of the Power Services level of engagement with HP, how transformative might it be to gain next-level insights about your customers and the general market? To be able to identify product and service needs, spending habits and limitations, total cost of ownership estimates, and future buying potential on an account-by-account basis? How beneficial would it be to your customers to be offered tailored solutions with predictive services and truly integrated collaboration tools?
You don’t want to give away your crown jewels just for the “honor” of selling an OEM’s hardware. You can always continue to sell HP and partner at the Synergy tier level. But if you are already in a steady relationship with HP and sharing data with no issues to this point, it is certainly worth evaluating all the facts and making an informed decision based on your own needs and experience.
Patricia Ames is president and senior analyst for BPO Media, which publishes The Imaging Channel and Workflow magazines. As a market analyst and industry consultant, Ames has worked for prominent consulting firms including KPMG and has more than 15 years experience in the imaging industry covering technology and business sectors. Ames has lived and worked in the United States, Southeast Asia and Europe and enjoys being a part of a global industry and community.