Online sales brush aside HP partners

Conference Jonathan Lambert reports on latest developments at the Gartner Group's annual US Symposium in Florida last week.

Hewlett Packard is turning its back on its channel partners as it Gartner Group's annual US Symposium in Florida last week. overhauls its salesforce to sell its products over the Web.

The move, which will shift hundreds of middle managers into direct sales roles, follows widespread criticism from customers who have found it difficult to deal with HP because of its poorly organised channel and direct salesforce.

The vendor is set to launch HP Connect in which it plans to reduce its authorised partners by two-thirds (PC Dealer, 14 October).

Paul McGuckin, research director of analyst firm Gartner Group, said: 'Companies can have direct sales contact with Sun and IBM, but not with HP. We believe it is alienating an estimated 10 to 15 per cent of its customers.' He claimed a high percentage of potential or existing customers were frustrated by not getting the attention they deserved in light of the volume of business they were offering.

Speaking at Gartner Group's annual US Symposium in Florida last week, Lew Platt, chief executive of HP, admitted customers had been trapped between the channel - which brings in two-thirds of HP's revenue - and direct sales.

'We are changing our relationship with the channel,' he added. 'Certain products just a year ago only sold through the channel and our direct salesforce was not allowed to deal in them. From today, it will be encouraged to talk to customers about those products.'

Initially, about 200 field managers will be repositioned as customer-facing sales agents, with additional staff to be recruited. HP has recently announced a number of redundancies in other parts of the business as it battles against costs and low earnings.

It will also begin selling products - including PCs - over the Net with direct delivery. Platt insisted some channel partners would still be able to fulfil orders.