Canada exempt from HP direct strategy

Canadian resellers will be spared the channel conflicts that may arise as Hewlett-Packard increases its direct sales on selected products in the United States.

HP is planning to launch a new channel program in November, Partner

One, which will see the firm directly sell Intel servers, PCs, notebooks and printers to its entire customer base south of the border. The move is a shift away from the company’s “”hard deck”” policy, which limited direct sales to some of HP’s largest Fortune 1,000 clients.

In Canada, HP will be launching its own version of the program,, a month earlier, but without the direct sales element. According to Derek Smith, Canadian channel manager at HP Canada in Mississauga, Ont., the local office didn’t want to “”draw a line in the sand”” over where its representatives would compete with resellers.

“”Hard deck really identified accounts where HP was going to go direct in the U.S. We opted in Canada to not take that direction,”” he said. “”We felt that based on the Canadian geography and the Canadian market, our partners are truly our preferred method to go to market because of their reach. It just made a lot more sense.””

HP Canada does not completely rule out direct sales, but Smith said it represented a very small percentage of the company’s model.

“”If the situation and the criteria make sense, customers will end up buying direct from HP,”” he said. “”There are customers that prefer to deal direct with a manufacturer.””

Smith would not discuss details of, but he said the company was talking with partners and trying to adopt the most popular elements of its own programs and that of Compaq Computer Corp., which HP acquired for US$18 billion earlier this year.

Chris Sabourin, president of Manageworx Infosystems Inc. in Winnipeg, said his company was recently de-authorized on HP’s 9000 server product. HP was the first vendor the company signed up when it opened five years ago.

“”We’re starting to see the shakeout of who stays and who goes,”” he said.

Other resellers, like Joe Aucoin at Toronto-based Commerx Computer Systems Inc., say they enjoy a better relationship with HP following the Compaq merger.

“”They could have said, ‘Well, we’ve got all these new reps, we’ll make sure that those reps take more product direct.’ They haven’t done that,”” he said. “”The result of merger so far is that we’re seeing a lot more opportunity to participate.””

Aucoin said he was pleased to see positions within HP being filled by former Compaq people. Smith is one example of an executive who has moved back and forth. Having worked at HP for 11 years, he became a vice-president of Compaq’s consumer business in 1999 and has now come full circle.

Sabourin said the key to HP’s future success in the channel may depend on how well it communicates its channel strategy to regional partners. “”We’ve never had a great relationship with HP, and it’s due largely because of local people,”” he said. “”The conversations we’ve had with other people across the country (say) this is not uncommon.””

Smith said will put their minds at rest.

“”A lot of people are concerned — are there going to be as many dollars on the table? The answer is yes,”” he said. “”Total investments for the channel are not going to change.””

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