This deal is really all about leverage. HP is trying to leverage its hardware sales into the SMB space through the channel. NetSuite is trying to leverage its SaaS and cloud computing solutions into a customer base that is desperately looking to reduce capital expenses. VARs are trying to leverage their businesses from hardware and software sales into a model based on service, support and revenue streams. In this case, the NetSuite apps run on HP hardware, and the channel partners get a percentage for referrals (although the precise percentage isn't clear.)

NetSuite has rolled out a hotline and a portal to support the HP VARs and is helping identify potential sales opportunities. But as in many cases like this, it appears the vendor will host the apps that the channel partners sell. Any opportunity for the channel to play in the cloud is welcome, and the VARs will be able to develop some additional value-added services around the technology. But it's not clear if the incremental income opportuity is enough to entice large numbers of channel partners to sign up.