Hewlett-Packard’s (HP’s) UK distribution partners are bracing themselves for another knockback as the vendor prepares to further slash rebates.
CRN understands that HP is looking to withdraw the extra discount it gives to distributors supplying its top 12 indirect accounts in the UK.
The rebates in that space were mooted to be between 1.5 and two per cent on deals. It is also believed that HP is looking to encourage more of its distributors to source new business in emerging markets and add more value to the channel in smaller deals.
The changes could be in place by 1 November and mirror a move made by HP last year when it ploughed $5m into resellers as a result of distributor rebate cuts (CRN, 17 October 2005).
David Poskett, director, Solutions Partner Organisation at HP, said in a statement to CRN: “HP does not discuss the detail with regards to terms and conditions. These are confidential to the commercial relationship between HP and its partners. HP continually reviews its terms with partners and consults with partners regarding any pending changes. This is normal process.”
Concern is also rising among top-level partners over future price hikes as distributors look to recoup losses.
One source told CRN: “Distributors will still deal with bigger VARs, but the cost may be passed onto us. This is a way of encouraging more value in the SME side of the business.”
Steve Lockie, managing director of Computer 2000, said: “We are aware that HP, along with other [vendor] partners, question schemes on a quarterly basis, but at this point we are unaware of any ‘specific’ plans.”
Grey Carlow, managing director of VAR Repton, said: “The low-end of the SME business is challenging. It is tough to turn that into profitable business because there is not the order flow per account. Adding incentives for opening new accounts would be a logical approach.”
David Gould, trading director at PC World Business, said: “HP is a very important part of our business. We expect any changes will be fully considered and we can work through them successfully.”
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