HP demands Middle East channel loyalty

Vendor giant HP is demanding unprecedented levels of loyalty from Middle East resellers that want to participate in its brand new preferred partner programme.

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By  Stuart Wilson Published  September 19, 2005

Vendor giant HP is demanding unprecedented levels of loyalty from Middle East resellers that want to participate in its brand new preferred partner programme. The new channel model will offer a range of benefits to partners prepared to invest in skills, certification, specialisations and commit to the entire HP product portfolio. “HP has now mapped its 400-strong Middle East volume and value partner base and we are looking at less than 200 of these achieving preferred partner status,” said Hazem Bazan, director channel sales solution partner organisation (SPO) at HP Middle East. “We are looking at the quality of partners, not just the quantity. We will basically have two partner categories: preferred partners and proximity partners.” The new programme goes live on November 1st 2005. Resellers wanting to make the preferred partner grade have until February 1st 2006 to meet the qualification criteria in terms of certification and revenues. With the new programme emphasising both ‘share of wallet’ within a reseller’s business and the attach ratio for complementary products and services, HP is making a bold statement regarding the importance of channel loyalty and commitment. “There is an element of risk,” conceded Christoph Schell, HP SPO manager for the ISE region. “This programme will not be managed by exception. From February 1st 2006 it is very much a black and white approach: you are either in or you are out.” “On the high touch products, I do think it is ‘make up your mind time’ for resellers. Do you want to sell other vendors’ kit or do you want to get real? On the volume side of the business I have no problem with partners selling rival vendors products as well,” he added. The preferred partner programme offers nine specialisations, spanning HP’s complete product portfolio: computing systems, datacentre solutions, e-preferred, high performance computing, imaging and printing, mobility networking, security, services and StorageWorks solutions. The range of benefits on offer for resellers making the grade includes permission to use the preferred partner logo, predictable compensation, sales and marketing resources and special pricing. While HP expects as much as 85% of sales in Western Europe to go through preferred partners, that figure is initially expected to be nearer 60% in the Middle East. As an emerging market, HP has modified the programme slightly for the Middle East and will continue to work hard to develop the proximity partner base. “The difference in this region is the emphasis we want to put on proximity partners,” admitted Schell. “What is important is that we do not lose market share at the base of the customer pyramid — and that means the proximity partner space. That sector remains very important and distributors will continue to play a vital role.” Proximity partners will also continue to receive access to special pricing from HP for large deals even though the vendor is committed to pushing as many of these projects to its preferred partner base as possible. “Even if a proximity partner comes across a big deal we will not block special pricing,” said Bazan. “We understand that some customers still pick their IT suppliers based on the strength of a supplier relationship.”

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