Resellers excluded by HP online stores

Resellers excluded by HP online stores

Only Hewlett-Packard's biggest reseller, Leading Solutions, will initially benefit from the rollout of HP's direct-selling Online Store - part of HP's "hybrid business model" (ARN June 9, page 1).

Chris Greig, general manager of HP Australia's Commercial Channels Organisation, has repeatedly indicated that orders will be fulfilled by the channel.

But the vendor refused to confirm any details about the local rollout of its direct-selling plans despite repeated attempts to glean more information by ARN last week.

However, as reported first in ARN Daily last Thursday, orders will be exclusively fulfilled by Leading Solutions for at least the first six months of Online Store's operation.

Frank Colli, managing director of Leading Solutions (the only all-HP reseller in the Australian channel), last week revealed part of HP's plan, in which it will compete with the direct-sales model pushed by competitors such as Dell.

"Because it doesn't have the fulfilment infrastructure, but for the channel, HP will take the orders via the new Web site and use its resellers to fulfil it," Colli said.

When asked if the Online Store will cannibalise the existing business of the channel, Colli said he'd bet his business that it won't - and he has. "The customers who will order from the Web site already know what they want, so this does not compete with the business generated via a full-service, value-adding reseller," he said.

Although Colli said he was limited by how much he can reveal, he expects the site to be launched on June 29 with a review of the model to be completed after the six-month trial period.

While it gives him a head start, Colli does not expect the Leading Solutions arrangement to remain exclusive. HP will harness the support of its other channel partners with the means to develop their online ordering system into a satisfactory fulfilment system, Colli said. It is understood, though, that some substantial development has gone into the system that links HP's direct-ordering Web site with Leading Solutions' own order processing, inventory control and fulfilment system.

When asked to respond to Colli's comments, a spokesperson for the vendor would only say that a "significant initiative will be revealed by Hewlett-Packard in the next few weeks".

Meanwhile, major retailers such as Harvey Norman are becoming alarmed by the direct strategy.

Tony Gattari, HN's general manager, computers and communications, said: "I am very concerned. These are global companies and I have suspicions that in the end, if the global executives want it to happen, there is very little that the local people can do about it."

Gattari also questioned whether industry trends to direct-sales models will work. "I think that Australian retail is unique. We have values like fair go, mateship and loyalty that still are very much a part of the Australian ethos," he said.

To the head of the class for Leading Solutionsby Richard NooneSYDNEY - Australian Hewlett-Packard reseller Leading Solutions has secured a $2.5 million deal with Victoria's Monash University to supply 500 PCs and a host of other services.

Sandy Notari, account manager for Leading Solutions, said 500 Vectra VE 350MHz computers pre-loaded with software were recently rolled out over a two-week period, in addition to some networking equipment. Ongoing help desk support and a three-year on-site warranty are also provided in the agreement.

Short-listed from a number of dealers, Notari said the reseller won the tender process because of its professionalism, quality of service and ability to deliver on time, resulting in Leading Solutions becoming a Monash-preferred supplier.

Professor John Rosenberg, dean of the Information Technology faculty at Monash University, said the incorporation of a leasing agreement with Macquarie IT set the deal apart as a significant deviation from the University's normal purchasing practice.

"The leasing deal is a first for the faculty as well as for the University. The PCs have been financed by Macquarie IT, which will assume the residual value risk of acquiring assets," Rosenberg said.

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