HP ‘Aggressively` Going After Dell`s SMB Customers

By Lawrence Walsh  |  Print this article Print

HP this week launched SMB Exchange, a sales strike team designed to expand the company’s share in the $55 billion SMB market segment by converting Dell and other competitors’ customers. The initiative will offer customers the choice of buying through reseller partners or direct from HP.

SMBs—small and midsize businesses with fewer than 500 employees—will spend about $55 billion on technology products and services each year, and the lion’s share of that belongs to Dell. And that doesn’t sit well with rival Hewlett-Packard.

HP officially unveiled SMB Exchange, a concentrated sales team that will target non-HP customers with special offers for products and services. The goal is to match or beat Dell Direct pricing and convert these companies to HP "customers for life."

"It’s a take-no-prisoners strategy, and we’re going after this market segment aggressively," says Meaghan Kelly, vice president of SMB Channel Strategy in HP’s Americas Solution Partners Organization.

Dell declined to respond to the HP initiative, saying that it doesn’t comment on competitors’ practices.

Ironically, SMB Exchange will employ a tactic that’s well-worn by Dell—giving potential customers the choice to buy through partners or direct from HP.

"It’s important for HP to set up ways for the customers to buy the way they want," Kelly says.

By HP’s estimates, Dell generates about $22 billion annually from SMBs in sales of PCs, printers, monitors, servers, storage and other IT gear. HP’s share of the $55 billion market segment is about 20 percent—or $11 billion. HP says its revenue and market share generating capability is constrained by Dell’s ability to undercut prices and lock HP resellers from penetrating accounts.

The direct elements of SMB Exchange are not designed to cut HP’s resellers and partners out of business. Kelly and John Hood, vice president and general manager of SMB Exchange, say the sales teams will always offer prospects the choice of buying products and services through partners. But the customer will have the choice of sourcing direct and indirect.

"It will open tremendous opportunities for channel partners for higher-value services and support opportunities uncovered by SMB Exchange," Kelly says.

"This is an inclusive strategy," Hood adds.

Lawrence Walsh Lawrence Walsh is editor of Baseline magazine, overseeing print and online editorial content and the strategic direction of the publication. He is also a regular columnist for Ziff Davis Enterprise's Channel Insider. Mr. Walsh is well versed in IT technology and issues, and he is an expert in IT security technologies and policies, managed services, business intelligence software and IT reseller channels. An award-winning journalist, Mr. Walsh has served as editor of CMP Technology's VARBusiness and GovernmentVAR magazines, and TechTarget's Information Security magazine. He has written hundreds of articles, analyses and commentaries on the development of reseller businesses, the IT marketplace and managed services, as well as information security policy, strategy and technology. Prior to his magazine career, Mr. Walsh was a newspaper editor and reporter, having held editorial positions at the Boston Globe, MetroWest Daily News, Brockton Enterprise and Community Newspaper Company.

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