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HP addresses channel issues

HP’s EMEA channel boss, Jos Brenkel, has admitted that the vendor suffered ‘operational issues’ in its EMEA channel strategy during the second fiscal quarter of 2004, but claims the vendor is ready to rectify the problems.

HP’s EMEA channel boss, Jos Brenkel, has admitted that the vendor suffered ‘operational issues’ in its EMEA channel strategy during the second fiscal quarter of 2004, but claims the vendor is ready to rectify the problems.

Speaking after a conference for 129 enterprise partners from across EMEA, Brenkel identified four key enterprise channel issues: optimising the model to reduce costs; encouraging resellers to hunt for business, identifying a framework for a hybrid direct-indirect sales model and controlling end-user pricing more effectively. Special pricing remains an issue that continues to affect most vendors pursuing an indirect sales strategy. The practice of offering special discounted prices through the channel for specific deals raises costs and can also become a source of grey market products.

“That is an area we have operationally failed on. That is a channel issue, an HP issue and an industry issue,” said Brenkel. “We have some resellers in the system — not a lot fortunately — that abuse the system, receive special pricing for one customer and then sell to other customers. That obviously is not legal. We will aggressively go after those partners who are abusing our end-user pricing guidelines and those that dabble in brokerage and grey marketing.”

To combat this practice HP is looking to expand its Top Config scheme across more geographies — including the Middle East — and widen the product sets it covers. Under the Top Config scheme, partners order through the channel and receive a direct customised shipment from HP reducing the possibility of product not reaching its intended destination.

With 70% of EMEA sales going through the channel, HP is keen to iron out any minor creases in its PartnerOne channel programme, especially in regards to the complexity of channel claims procedures.

Rival vendors have been quick to exploit HP’s channel issues and attempt to woo disenchanted channel partners. “Yes IBM is doing a very aggressive campaign,” admitted Brenkel. “But a lot of partners have said they would not move because IBM was using hardware as a loss leader to go and get the services business.”

“You have a certain amount of money you can invest,” said Brenkel. “You can invest it all in short-term tactical rebate programmes or you can split it into various investments such as market development funds (MDF), compensation, accreditation, investments in IT systems and total customer experience programmes. It depends what you’re looking for as a partner. If you want the quick and dirty, the IBM programme is fantastic. If you believe you are building and changing your business model in the long-term, I believe the HP programme is better.”

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