HP partners embrace refreshed PfR scheme

Vendor offers support to channel partners feeling the financial squeeze by revising rebate initiative

HP’s partners have welcomed the vendor’s efforts to ease economic pressures on the channel by scrapping several target-based rebate schemes.

As exclusively revealed by Channelweb last week, the vendor sent an email to its partners claiming that based on channel feedback the vendor was looking at ways to support resellers and distributors, which translated into changes in its Pay for Results (PfR) scheme.

“In the current tough economic climate, HP is continuing to look at innovative and proactive ways to support its channel partners. Acting on feedback received, we want to reduce the uncertainty and vulnerability that the current market conditions present,” the email read.

Effective from this month, the vendor has replaced the target-based scheme with “linear fixed percentage schemes”.

HP’s changes are two-pronged: first, the existing target-based PSG, ISS, SWD and HPS volume PfR schemes will be replaced by uncapped fixed-percentage compensation schemes; and second, the IPG PfR scheme will have rebate thresholds lowered from 80 per cent to 60 per cent.

Tom Kelly, UK managing director of Logicalis, said: “With the dynamics of the economy at the moment, any changes that help both the vendor and the partner to make money and take away hurdles that are not necessary, are welcome.”

However, Kelly stressed that the targets should be re-introduced when the market picks up.

Alex Tatham, sales and marketing director at distributor Westcoast, also welcomed the changes. “It is a great thing and a change that a number of resellers and distributors have been asking for,” he said.

“It puts all partners on a level playing field, particularly the smaller players. We wrote to our customers last week to inform them of the price changes.

“I think it is a very positive thing for both resellers and distributors,” added Tatham.

One reseller, who asked to remain anonymous, told CRN: “HP has yet to explain fully what this means to us, but in principle it seems like a good thing for the channel.”
HP was unavailable to comment as CRN went to press.