Partners move away from 'new HP'

Partners move away from 'new HP'

While HP made several distribution changes in the latter half of 2003, six months of aggressive moves by the vendor to revamp its channel and pursue direct business has pushed away some of its top level reseller partners in the process.

WA-headquartered ComputerCORP, which turns over more than $114 million a year, claims to be one of HP’s largest reseller partners. But the reseller has now actively moved towards other vendors, managing director, Hugh Smith, said.

“HP has really changed in the last six months, they’ve come out and shown their true colours," he said. "They are not a channel-friendly company.”

“The new HP is the new Dell,” he said.

ComputerCORP had elected to develop its IBM and Toshiba business, in order to mitigate risk, Smith said.

The opportunities with HP, such as the agency agreement, weren’t a viable option, he said.

“I’m not interested in running a business on 4 to 5 per cent,” Smith said. “We’re looking for other opportunities and they’re out there.

“HP really have to learn a lesson. The channel has built them up to this lofty position. It doesn’t pay to burn their relationships. The channel is not stupid, we can do other things. And we are.”

Smith’s comments come a month after another HP reseller, Leading Solutions, broke its 13-year exclusive hardware relationship with HP, adding Toshiba to its vendor line-up.

At that time, Leading Solutions managing director, Frank Colli, said that HP’s method of engagement with its channel partners had changed since the merger with Compaq.

“Like any product as it goes through evolution, what HP is looking for from different partners has changed," he said.

HP is still a major business partner for both Leading Solutions and ComputerCORP, and both Colli and Smith acknowledged that HP’s changes were in response to market conditions including the success of direct vendor Dell.

An HP partner that hasn’t moved away from the vendor is tier one reseller Volante Systems.

While Volante had come up against HP’s direct sales force more frequently in the last six months, managing director, Hugh Bickerstaff, said the its HP business continued to grow.

“We’re not moving business away from HP, if anything our business with HP continues to get stronger," he said. "Obviously there are segments of the market where our strategy and HP’s strategy clash on certain accounts or bids, and we don’t work together there.”

"We partner and bid the way we have to, to be successful. For example, if HP has decided to go direct with a particular government department, we’d partner with another vendor to bid for that business.”

But the shift wasn’t peculiar to HP, Bickerstaff said.

Many of the reseller complaints being levelled at HP were being made about IBM a year or 18 months ago as it had realigned its business to a more direct model, he said.

For more on this story, see this week's issue of ARN.

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