HP removes direct line in the sand

HP removes direct line in the sand

After a couple of years of looking to increase the amount of business it takes direct, HP has made a channel-friendly announcement.

Following a tweak to its Rules of Engagement document - which sets out its hybrid sales strategy for channel partners - the vendor will let resellers retain customers with more than 1000 seats that it would previously have looked to take direct.

However, retention of these larger customers is closely tied to up-selling, cross-selling and attach rate targets that are reviewed every three months.

HP Solutions Partner Organisation director, Martin Dare, said the decision to soften the line in the sand at 1000 seats followed an announcement from CEO, Mark Hurd, at its recent global partner conference. Hurd said HP wanted more loyalty from partners and would reciprocate that commitment.

"Customers with upwards of 1000 seats are attractive to HP and its partners," Dare said. "But if resellers can demonstrate cross-selling, up-selling and attach rates in these accounts then HP will not take them direct.

"We want to make sure partners are doing everything they can to secure HP sales, but we also want to help them maximise their own profitability."

HP has built a team of about a dozen internal sales staff that are only rewarded for personal systems group (PSG) channel sales, according to Dare. A similar number would be appointed to its technology solutions group (TSG) early next year, together with another six for its imaging and printing group (IPG). TSG looks after enterprise solution products like high-end server and storage.

BCA IT managing director, Stephen Harrington, said the HP announcement was positive news for the channel.

"I think it is recognition that going direct isn't always the best option in large accounts," he said. "It sends a clear statement to HP reps in the field that they can't make approaches like they have in the past. If we do the right thing by HP, it won't tamper with our customer relationships."

Dimension Data corporate communications manager, Martin Aungle, said it had strategically moved away from HP during the past couple of years.

"Our traditional market is traditionally 1000 seats and above, which pretty much shut us out of most HP work because of its direct approach," he said.

"This [announcement] sounds more positive in terms of future engagement."

Dare estimated PSG currently had about 85 end-user organisations that it serviced directly but said there were another 200 that had more than 1000 seats and currently dealt with resellers. The numbers were similar for IPG and TSG.

The majority of 1000-seat customers currently serviced indirectly were largely looked after by a core of about 25 HP partners, according to Dare.

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