It is always going to be an emotive issue whenever a vendor mentions the D-word, and HP’s decision to launch a direct program for a select band of imaging and printing customers is no exception. But while HP undoubtedly has the most to gain from the new program, it seems the vast majority of its imaging and printing (IPG) channel has little to lose.
First of all, HP is only looking to sign up 150 accounts to its CAP program between now and the end of next year. About half of these, if all goes to plan, will be new business won from the large copier players such as Canon and Xerox.
While the CAP program could eventually account for up to 10 per cent of IPG revenues, that still leaves nine-tenths of a very big pie for HP channel partners to target.
Furthermore, IPG general manager, Rebekah O’Flaherty, is adamant the program will be capped if it reaches 200 accounts at some stage beyond 2005. These assurances are no doubt being issued to counter any suspicion among resellers that this is the thin end of a wedge which will see HP increase its direct touch if the program is successful. Only time will tell if HP keeps to its word but, for now, there are definitely some positives for resellers to take from the announcement.
The first of these is the very clear message that HP has put out to detail how many accounts it is targeting, why it is doing so and how much of its channel business the program will eat into. Conversations with resellers have always suggested clarity is one of the most important features of business partner relationships.
It should also be noted that HP will be growing the market that its traditional printer resellers can target in future by flying the IT flag in the converging printer/copier market. The copier channel has blazed the trail to date and is at least a couple of years ahead of the IT channel in shifting to a new service-based model where customers pay for printing and copying by the page, by user or by machines leased rather than buying hardware upfront.
While this trend is currently confined to large enterprise and government departments, it is likely to move down the food chain in coming years and open up a whole new world of opportunity for resellers where imaging and printing revenues are a constant stream rather than a series of one-off sales with a maintenance element tacked on.
Whether your business is built on selling mobile phones to consumers or management software to large corporate customers, the shift to service models is all around us. Fewer and fewer people buy mobile phones these days, most preferring instead to sign up to a plan where the handset is included in the monthly payments, while companies such as Veritas continue to promote a utility computing vision of a world where technology can be turned on and off as easily as a tap or an electricity switch.
Services are increasingly king and resellers would do well to fully investigate any opportunities to grow that side of their business. What do you think?
Brian Corrigan is Editor of ARN. Reach him at firstname.lastname@example.org