HP outlines latest PartnerONE changes

Promises partners a refined product offering and improved incentive structure when the latest set of changes become effective next month

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By  Andrew Seymour Published  April 6, 2009

HP is promising partners a refined product offering and improved incentive structure when the latest set of changes to its PartnerONE channel programme become effective next month.

The modifications represent the first major update that HP has made to PartnerONE since the credit crunch began to bite and are designed to reflect the uncertain market conditions partners now face.

Earlier this year, the vendor replaced target-driven rebates with a fixed percentage model for resellers and the latest changes build on that move by handing partners an enhanced cash-to-cash cycle and more predictable compensation.

HP is promising “aggressive” up-front pricing for small business and small office products from its Personal Systems Group (PSG) as well as fixed-rate linear compensation schemes for resellers on other PSG items.

The adjustments are aimed at boosting earnings predictability in the channel and lowering administrative costs relating to promotions and claims handling.

Compensation on IPG hardware and supplies is also being simplified from May 1st, while distributor margins will be tied to a front-end structure in order to reduce dependence on back-end rebates.

Additional changes to HP’s ‘Pay for Results’ model that partners will notice include higher compensation for PSG Specialist partners on products such as workstations and thin clients, as well as PSG services.

“In today’s environment, our partners have neither time, energy nor money to spare — we need to help them make the very most of every business opportunity,” said Anil Kumar, general manager for PSG at HP Middle East. “We are moving to a more streamlined and simplified business model that we believe will be more predictable for our partners, allow them to grow their business with HP and turn their cash faster.”

Imaging and Printing Group (IPG) resellers can also expect to see significant changes from next month onwards, notably the integration of hardware and supplies partners under a single accreditation.

That move mirrors structural changes which have already taken place inside HP to bring hardware and supplies under the same umbrella. New IPG Middle East boss Amin Mortazavi said last week that the reorganisation acknowledges that both categories go hand-in-hand and will give partners a single point of contact in future.

“HP and our partners need to look at the entire printing business as printer and supplies together — you cannot separate them. Strengthening HP’s position in the market and making us a much stronger partner for our first and second tier partners was the reason for this realignment,” said Mortazavi.

The new IPG Specialisation offers specific sales programmes for different channel segments and a revised solutions portfolio that includes pay-per-usage contracts and document management software to drive margins. Sales bonuses will also be offered to IPG dealers based on twice-yearly business plans.

Finally, HP has pledged to slim down its hardware portfolio in an attempt to cut the amount of time resellers spend choosing configurations and ease inventory management concerns among distributors.

HP reckons it is capable of reducing the number of IPG configurations by up to 30% over the next six months and the number of PSG small business configurations by 35%.

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