HP strengthens commitment to the channel

Hewlett Packard has said that it will work more closely with its channel partners in an attempt to increase flagging turnover.

Hewlett Packard (HP) has said that it will work more closely with its channel partners in an attempt to increase flagging turnover.

Chief executive Carly Fiorina explained that conflict between the company's direct and indirect sales strategies was a contributing factor to disappointing first-quarter results. While the company saw turnover of $11.9bn compared with $11.7bn for the same period last year, profit fell by 59 per cent to $32.8m.

"We had channel conflict in some accounts. The direct sales force was trying to hit aggressive growth targets, and wandered into accounts that were the channel's. This created suspicion among our channel partners. We damaged our channel relationships and opened the door for our competitors," said Fiorina.

Last month, Computer Reseller News revealed that HP was planning to cut back its direct sales operation and increase its investment in small to medium sized enterprise-oriented resellers.

John Young, HP's UK corporate business manager, claimed that while conflict between direct sales and the channel was less severe in the UK than in the US, measures still had to be taken to avoid any escalation.

"The UK has held up fairly well, and we are less guilty of making mistakes than in the US. But efforts do need to be made to involve the channel even more in company business. We will commit to the reseller who commits to us," he said.

Steve Brazier, chief executive of Canalys.com, said: "HP is a very strongly channel-oriented company, but direct business was very much the flavour of the month for businesses last year."

"HP's new management [led by Fiorina] seems slightly more in favour of direct sales than the previous team," he added. "But they have found that it is far easier to talk direct than to do it successfully."

First published in Computer Reseller News