HP reveals new channel plan

HP's new Preferred Partner Programme is set to go live on November 1st 2005 with the regional HP SPO dream team pledging to move closer to final tier resellers and drive channel sell-out.

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By  Stuart Wilson Published  July 24, 2005

HP's new Preferred Partner Programme is set to go live on November 1st 2005 with the regional HP solution partner organisation (SPO) dream team pledging to move closer to final tier resellers and drive channel sell-out. The modification to HP’s existing channel programme will place an increased emphasis on reseller loyalty and forms part of a concerted effort by HP to build even closer relationships with final tier resellers in the Middle East. “HP plans to put a real emphasis on partner loyalty,” declared Christoph Schell, HP SPO manager international sales Europe (ISE) region. “Preferred partners will benefit not only through global support and channel funds but they will also receive preferred handling when it comes to business opportunities. We will structure it as a VIP club for resellers and there will be clear criteria that each partner needs to fulfil to participate.” The specific criteria for qualification to preferred partner status in the Middle East are currently being finalised. Informed channel sources claim that the proposed programme will result in higher levels of focus on a select number of HP corporate resellers selling into enterprise accounts. Simultaneously, midmarket and small business resellers will be pushed to gain specific specialisations in order to gain entry to the proposed programme. Hazem Bazan, HP SPO and PSG manager for the Middle East, said: “We are categorising our Middle East partners based on their areas of specialisation. The plan is to push them even deeper into these areas and ensure that they deliver real value to the customers. We are also categorising partners that are focused on volume business and will change the way we compensate them to create a win-win situation in terms of their overall business profitability.” HP claims that the new channel programme signifies a shift in emphasis away from push marketing aimed at first tier distribution partners towards pull activities targeted at both second-tier partners and end-users. “The reasoning behind this is because we believe that we are spending a lot of time in the ISE region on push mode and we really want to change this and transfer it to pull activities and pull management,” said Schell. “There will now be more focus on partner business managers (PBMs). This does not mean we will stop developing our relationships with distributors but it will involve more automatic processes.” “The skills and certification that HP partners have in the Middle East is a barrier to entry to other vendors,” emphasised Schell. “This has been built up over ten years and new vendors — especially if they are switching from a direct to an indirect sales model for this region — cannot just claim they are going to certify their channel. It is an asset that you build over time and we are proud of what we have built. There are only two or three vendors besides HP that truly have a channel capable of selling specialised solutions that add value for customers.” Channel stuffing by major vendors to hit sales targets at the end of every quarter remains commonplace according to major distributors. HP claims that its emphasis on pull marketing can change this. “We thought a shift from push to pull would affect revenues, but these are two engines that work hand-in-hand,” said Bazan. “If you ensure sell-out, then the sell-in revenues happen.” HP hopes to have precise qualification criteria for the programme finalised by the middle of September. The new programme marks a strategic shift in focus and will be welcomed by committed HP partners. However, introducing a channel programme where select resellers have certain advantages needs to be managed carefully to prevent those that do not make the grade from becoming disillusioned.

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