Will EMEA-level vendor executives become obsolete?
Josh Budd asks whether HPE's bold move to remove its EMEA management layer will prompt other vendors to follow suit
Last month HPE revealed the latest episode of its "de-layering" exercise which has so far seen the vendor giant sell off its enterprise services unit to CSC for $8.5bn (£6.3bn), and spin out its non-core software assets to UK firm Micro Focus for $8.8bn.
Now reports have emerged that HPE is aiming to save $1.5bn over the next few years which will see the firm slash 5,000 staff - or 10 per cent of its workforce.
As part of the mass revamp, HPE has removed its EMEA management structure, meaning that customers - as well as channel partners - will be served only by single-country managing directors, who will in turn be supported by global heads of the business.
The move also affects HPE's channels and alliances team, with Denzil Samuels taking charge of the firm's global channels, overseeing single-country management.
Speaking to CRN's sister publication Channelnomics Europe, a handful of channel executives welcomed the news from HPE, claiming that tailoring management towards a country-specific approach will streamline decision making and make the firm more attuned to the nuances of each individual European market.
CEO of Nordic systems integrator Atea Steinar Sønsteby even told Channelnomics Europe that a vendor's EMEA or European layer "doesn't add any value".
"For partners like us, we don't need that layer; we talk to the US or we talk to the local guys. So what they are doing is really strengthening the local support for us; the European level that travels around and does KPIs doesn't add any value. So I think she [HPE CEO Meg Whitman] is doing the right thing," he said.
Didier Lejeune, MD of SCC France, expressed similar sentiments.
"It is good. I think it will bring more activity and speed in the business - I hope so. I think there will be more emphasis in single countries," he said.
HPE's move represents a departure from the norm, with almost all vendors - big and small - employing EMEA-level executives to deal with customers and channels. The role of such an executive is to gather information from country managing directors and report to the global executive on the region's performance.
But with country managing directors instead feeding information to global executives, will HPE's global sales and channel teams be put under too much strain?
Clive Longbottom, founder of analyst Quocirca, said HPE's main competitor - namely Dell EMC - will be watching closely to see if HPE's bold move pays off.
"Dell and others are going to sit there and see how it pans out. At the moment their channel system is working reasonably well, and they will not want to wreck that ship while HPE is adopting an unproven structure. They will see if HPE can make a success of this; I do not think it is a case of HPE being a company that everyone should necessarily replicate," he said.
Longbottom remains sceptical that a country-led management structure will work, and warned the channel that the move could make dealing with HPE more difficult rather than easier.
"It is a very difficult and complex environment. You are going to get more latency [between country and global managers] in that sense; and so it is not going to work," he said.
"I think the channel will start to realise what is missing. Once it is gone, there will be no one to perceive what is going on in Germany, France and Spain altogether.
"They have to make sure they have control. You cannot have a different message about a product, for example, in Germany to in Italy - there has to be a coherent branding, you have to keep some branding worldwide and you have to make sure the right messages are put out."
One thing is for certain, HPE's move has sparked interest among channel partners and vendors alike and the IT giant's peers and competitors will be looking to learn from its successes, mistakes, and failures in the months to come.