HP PartnerOne debuts in Middle East

HP has rolled out its worldwide partner programme, PartnerOne for business in the Middle East, to ensure ongoing profitability and competitiveness for the channel

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By  Mark Sutton Published  September 29, 2003

HP has debuted its new channel model in the Middle East, called PartnerOne. The scheme is a worldwide programme that is meant to ensure the profitability and competitiveness of HP's partners, and includes radical changes to stop sub-distribution and channel stuffing.

PartnerOne predates the HP/Compaq merger, explained Christoph Schell, general manager of HP personal systems group, although it has taken a while to establish it in the Middle East. The aim of the scheme, is to get the most out of the channel.

"What it is all about is to enhance the efficiency of addressing customers, getting the supply chain between HP and the end customer set up in a more efficient, quicker, more satisfying way for customers, but also in a more profitable way for the partners that are running the show," Schell explained.

Under PartnerOne, partners will be split into Logistics Services Partners (LSPs), Channel Development Partners (CDPs) and Sales and Service Partners (SSPs), who will be further split into those with direct contracts with HP and those without.

Different levels of rebates will define each category, and, as of November, automated daily reporting will provide HP with the insight into the channel partners to monitor that the model is working properly. The rebates are all sell-out based to ensure that objectives are being met.

"From a sales point of view, within HP, the biggest change is that all rebates, all objectives we are setting, are not based on sell-in they are based on sell-out, Schell said. "The push model in sales is obsolete, you can't survive by filling up inventory and not generating sales to pull it out."

Another major change is the removal of sub-distribution. While Schell admits that not all partners are happy about the move, the new rebate structure and enhanced reporting should eliminate sub-distribution problems.

"We have stopped accepting someone giving us a business plan and telling us he is a corporate reseller, engaged in government and corporate deals when 80% of his business is from sub-distribution. That is over," he said.

So far HP has conducted three roadshows to explain the new programme to partners across the region, and the vendor is planning another roadshow to address the non-contractual SSPs as the main channel for dealing with the SMB market, a future focus area.

"It is important for partners to be geared up for the future, because what we saw in Europe with direct engagement was, if you don't have a lean and efficient set up in the channel, you cannot compete with competitors who go direct," Schell said. "In the Middle East, direct business is not a topic, but it is still important that partners are able to stay competitive in future. It is a painful education, but I think they will all come out of it, at another stage of evolution of the channel."

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