HP To Promote VARs To Customers

HP To Promote VARs To Customers


HP To Promote VARs To Customers

By Jeff O'Heir
October 04, 2002    12:26 AM ET

Hewlett-Packard (NYSE:HPQ) next month will launch the pilot of its "signal value" initiative designed to promote the value of solution providers to end-users in vertical markets.

The initiative, which some VARs hailed as a breakthrough for HP, is built around a bundled solution that will include a specialized application designed by an ISV, HP products and implementation and services provided by VARs, said Kevin Gilroy, vice president commercial channels at HP, Thursday during Ingram Micro's VentureTech Network conference here. HP's marketing staff will drive the solutions to end users in SMB markets such as gas and oil exploration, banking, real estate and health care. If the customers accept the full solution, including VAR services, they'll receive different types of incentives, such as extended warranties and discounted bundles. "If the customer doesn't choose the full package, those benefits go away," Gilroy said.

HP plans to back the initiative with a multi-million dollar print and Web-based advertising campaign aimed at end users, Gilroy said. "This is designed for the VARs to get recognition of the value they deliver," he said.

Many solution providers have said their relationship with HP has eroded since the company increased its direct sales efforts into SMB markets following its merger with Compaq. Solution providers here said the new initiative is a step in repairing some of that damage. "It sounds like a very good strategy," said Jennifer McCadden, president of Universal Connecting Point, a Pittsford, N.Y., based solution provider. "This is one of the first times that a vendor is expressing the value of its solution provider partners to the end user. That's huge."

David Sallander, president of Sherlock Systems, a solution provider in Buffalo Grove, Ill., that focuses on digital imaging technologies, said such a strategy would make his HP partnership even more valuable. "A lot of good could from it," he said. "Those customers will know they can get additional value by working with VARs."

But for the initiative to work, Pat Collins, Ingram Micro (NYSE:IM)'s senior group vice president, said HP must make sure that every aspect of it is clearly defined and closely monitored, including payment processes, market and region selections, and the quality of solution providers and their finished work.

"Conceptually, how can you argue with that type of program? It sounds like a tremendous statement of support for solution providers," he said. "But, like all programs, the devil is in the details."