Editorial: Paying the price

Editorial: Paying the price

While it is good news to hear HP plans to reengage the channel at the top end of its printing business, its conduct during the past couple of years will mean it is likely to be pushing a wheelbarrow uphill for a while.

All too often in this industry, members of the vendor community act like they are doing the channel a favour by engaging their services when the truth is usually quite different. Success in a market like Australia, so heavily dominated by small and medium business, is heavily reliant on effective channel strategies. It is the reseller who has the key customer relationships and, more often than not, users will value their recommendations ahead of insisting on a particular badge.

For anybody in the vendor community that hasn't realised yet, here's rule number one of channel engagement: Be up front about any business you intend to service directly and stick to your word. HP's printing business failed to do that effectively under the stewardship of Rebekah O'Flaherty and has paid a heavy price.

As trust levels deteriorated, major resellers increasingly looked to take other brands into major government and corporate accounts. Commander's general manager of strategy and development, Steve Evans, has said he would be happy to reengage with HP but was quick to stress that major business transitioned to Lexmark would not be coming back anytime soon (see page 1 of ARN June 21 edition).

Still, time is a great healer and HP has the ability to rebuild those trust levels if Schell can live up to the promises he has made since taking the reins a couple of months ago. Freezing direct accounts for six months and providing an updated list of those customers to major IPG partners is a good start.

Holding stock in country is another good move because it should reduce turnaround times. Make no mistake that PC and server dealers wish their respective divisions of HP would follow that lead to help them compete more effectively against Dell. Even in seven-figure contracts, getting boxes on site a couple of days earlier can be the difference between winning and losing business.

Talking of timely delivery, this seems to have been a factor in a growing trend for Cisco gold partners to source product from distribution (see page 1). It's no secret that these major integrators and resellers organisations can buy direct from the networking giant, saving themselves a couple of points in the process.

But the levels of expertise inherent within the Express Data and LAN Systems teams these days has made that small percentage saving seem less attractive when balanced against quicker delivery times and valuable pre-sales support. Competition is a great motivator and both companies have done a great job of driving each other on, especially since Tech Pacific lost its Cisco contract back in October 2003.

The desire to outdo each other can only be getting stronger now that Ingram Micro is looming large in the rear view mirror. Cisco has given no indication that it intends to give Ingram access to its corporate business but the two organisations are global partners and the distributor has been lobbying hard in recent times. Its recent creation of a solutions division could just tip the scales and see it given access to the whole Cisco range in the next couple of months when the networking vendor enters its new financial year.

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