HPE paying partners five per cent extra for speedy deals

Partners being invited to nominate handful of deals to which HPE will potentially apply an extra five per cent discount

Hewlett Packard Enterprise (HPE) is offering resellers extra discounts under a promotion designed to bring in quick sales in its current quarter.

Under the promotion, HPE is offering to pay an extra discount of five per cent for deals that are either already in the pipeline with HPE that can be brought forward, or which involve competitive vendors, partners told CRN.

Partners can nominate a handful of deals to be considered under the promotion, but whether they get the go-ahead is down to HPE's discretion, we were told.

One partner, who alerted CRN to the promotion but did not wish to be named, said HPE runs the risk of "falling into a dangerous cycle", as it pushes deals into its current quarter ending April, leaving it potentially exposed in the next. He also said he thought the extra partner margin was because HPE "is panicking about its Q2 numbers".

However, two further Platinum partners we spoke to, Softcat and SCC, said nothing HPE has told them had given them any cause for concern.

The promotion comes as HPE released a strong set of numbers for its Q1 - its first quarter as an independent company. Total revenues grew four per cent year on year in constant currencies to $12.7bn (£8.9bn), with server, storage and networking sales growing five, three and 54 per cent respectively, on the same basis. HPE's share price rose six per cent last night.

Martin Hellawell, chief executive of Softcat, said his firm had been invited to nominate up to five deals under the promotion.

"The last time I met with HPE a couple of weeks ago, the numbers were pretty good, and particularly good in servers, which is the bulk of the business, so I think panic would be overstating it," he said.

"Do they want to drive up their numbers? Yes, clearly they do. But there are promotional activities from all the vendors all the time."

Andy Wright, sales director of SCC, also got the impression it is business as usual at HPE.

"This is normal behaviour to drive incremental business into a quarter," he said. "We definitely don't see panic and our business with HPE is strong and has been throughout calendar 2016. It might be a different mechanism they have used from in the past, but this is not unusual behaviour."

In a statement, an HPE representative said: "This was a standard promotion to drive sales and advance our market-leading position in the hardware sector."