HP disties to learn their fate
'Right-sizing' programme to restructure HP's Middle East channel is completed
Middle East HP distributors will this week find out where they fit into the vendor's plans following the conclusion of a ‘rightsizing' programme undertaken over the past few months.
HP is expected to reduce the number of distributors authorised to carry its commercial products in the Gulf, Saudi Arabia and Egypt. The revised structure will come into effect from the beginning of August, in line with the start of HP's next fiscal quarter.
"The information should flow in to distributors this week," said one channel source. "The number of distributors here is more than HP requires and when that happens the profitability of the distributors comes down - that's the natural process. That is why they have decided to review it."
Almasa, Aptec, Emitac, Jumbo and Redington are all poised to learn what role they will play in HP's future Gulf distribution strategy. The same applies to distributors in Saudi Arabia, such as AIM and the local subsidiaries of Almasa, Aptec and Redington. In Egypt, meanwhile, existing partners awaiting news include Mantrac, Raya and Metra.
One UAE-based market source said a move to reduce numbers - or even the amount of exhibits carried by each authorised partner - would be welcomed by the channel given the pressures on HP distributors. "The growth is high and HP wants all the distributors to bring in more working capital to speed it up further. And the working capital will only come when the returns are reasonable so this is what they are trying to ensure. It is a step in the right direction."
Speaking to Channel Middle East back in June, HP's Solutions Partner Organisation chief Bernhard Isemann confirmed the company was making "improvements" to its distribution structure in the Middle East and expected the results to be visible by August.
"We want to increase our product availability capabilities - meaning we increase working capital and buying power for distributors in the region - and secondly we have a programme to develop the sales power into the reseller community. This channel development part will be the focus in the next year," he revealed at the time.
HP is also tipped to create a formal distribution manager post in the Middle East as it looks to step up engagement with its second-tier partners. Such a move would allow Isemann and his team to increase focus on the reseller channel, as SPO has traditionally assumed direct responsibility for distribution.