HP readies SMB-focused channel

HP’s Smart Office II initiative, targeted at selling solutions to SMB customers, will be spearheaded across the Middle East by 308 carefully selected resellers. These partners will be eligible to upgraded bonus schemes and access to specialist training from HP.

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By  Stuart Wilson Published  April 12, 2004

HP’s Smart Office II initiative, targeted at selling complete solutions to SMB customers, will be spearheaded across the Middle East by 308 resellers — selected from HP’s 3,000 partners across the region. These partners will be eligible for upgraded bonus schemes and receive access to specialist training from HP. The number could increase to 500 as more partners pursue business models that fit with HP’s objectives to serve the SMB space. “HP wants partners that have moved away from a hybrid business model and do not operate as a retailer, reseller and distributor,” explained Christoph Schell, general manager Personal Systems Group, HP Middle East. “The 308 selected have proved to us that they have the potential to do this. They can help improve segmentation and vertical focus in the channel.” “This does not mean we stop doing business with the other partners not selected,” continues Schell. “We are showing them the carrot and encouraging them to get out of the hybrid model. Those in the scheme will receive bonus incentives based on the sales mix they achieve and their ability to move away from purely product-led sales.” The 308 partners selected are capable of pushing complete solutions to SMB customers comprising HP products and packaged services. They were selected based on their HP revenues, proposed business plan, number of sales and technical staff and willingness to invest in driving HP solutions to the SMB segment. For its part, HP has put together care packs, financing schemes and provides a wealth of online information to potential SMB customers. “To be a big player in the SMB space, we can’t afford to shy away from small deals,” adds Schell. “But HP cannot always dedicate sales resources to small deals so we need a one-to-many channel structure in place.” The Smart Office package looks to pull SMB customers closer to HP through various schemes including trade-in programmes, promotions, bundling and an SMB loyalty programme. The purchasing power of SMBs is small individually, but collectively it is a massive market opportunity. HP had decided to opt for quality not quantity in its channel model. “We will not open the market to all our partners,” adds Schell. “We have to reassure partners they can maintain a sustainable business by offering a decent margin proposition.” HP needs to back up the partners selected with a strong marketing campaign and far-reaching lead generation efforts. By putting in place enhanced incentive schemes for partners that follow the evolution path that HP approves of, the company is taking a calculated gamble. Those that failed to qualify this time will either start making plans to adapt or, alternatively, seek out new vendor partners to work with in the SMB space.

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