Hewlett-Packard (HP) VARs selling services in the mid-market could face increasing competition from the vendor if its proposed £163m take-over of IT services company Synstar goes ahead.
The deal will see Synstar, a multi-vendor service provider, become part of HP's Technology Solutions Group (TSG). Synstar has a direct presence in eight European countries and specialises in the management of IT infrastructures across desktop and data-centre environments.
Steve Vaughan, chief executive of Synstar, said the board has recommended the deal to shareholders. "Our multi-vendor skills are an important part of the deal, and they will remain," he added.
Gerry Sheridan, vice-president of HP TSG, said since the merger with Compaq, HP has been building up its services business to take on IBM. He added that HP intends to increase its mid-market activity but claimed this will provide VARs with the opportunity to sell the hardware and services.
However, he added: "Because the services market is so fragmented you have to partner with someone one day and the next you're competing with them."
Des Lekerman, managing director of HP VAR Eurodata Systems, said services are essential. "Resellers sell hardware to spearhead services. If they are not selling services they will not be promoting the hardware, so HP could lose out to Dell or IBM."
Darren Sculley, commercial director at reseller Nexus Open Systems, believes HP is changing its sales model by stealth. "It needs to, because hardware margins are so low. HP seems to be using a similar model to Dell by using resellers but having the capability to support direct.
"But a vendor offering direct support is not necessarily a bad thing. It is a good alternative for the customer," he said.
Carl Mitchell, sales manager at former HP VAR, 3CUK, said he believes resellers are becoming disgruntled because HP seems to have increased its direct business.
But in response Andy Vickers, UK and Ireland director of the solution partners organisation at HP, said: "We plan to grow HP's business overall. The channel is critical and accounts for a high proportion of that."
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