£99 HP server spooks channel

£100 cash-back promotion for ProLiant microserver causes a stir among partners

The appearance of a £99 server from HP has led to claims from channel onlookers that the vendor risks devaluing the market.

HP today launched a £100 cash-back promotion for its recently launched ProLiant microserver. Distributors sell the product into resellers for £199. The offer is valid until 31 December.

James Yates, business manager at specialist server distributor Server Plus, questioned the impact the promotion would have on the channel.

“It is an extraordinary offer and I can only presume that either HP has a glut of stock and it hasn’t done as well as it expected, or that this is a PR exercise," he said.

“It will definitely drive up sales but will also set an expectation around ASPs.”

One HP distributor, who wished to remain anonymous, agreed that promoting a server at below the cost of an entry-level PC was “out of the ordinary”.

“HP has recognised that December is an awful month for selling servers and there is probably a lot of stock in the channel,” he said.

To qualify, end users must complete a form and attach the reseller invoice with the qualifying product and HP part codes circled. The promotion is limited at up to five servers per customer and all submissions must be received by 4 February. HP launched its microserver range in September as a way to enable small firms to achieve "server performance but at a PC price."