Direct Option Stirs Some SkepticismBy Lawrence Walsh | 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.
Partners tend to agree: HP developed SMB Exchange in cooperation with its partner advisory councils and channel consultants to ensure the program remains channel-friendly. Even partners who weren’t consulted on the program’s development concur with the approach.
"What they’re trying to do is create market share where there is no HP presence," says Deepak Thadani, president of SysIntegrators in Woodside, N.Y. "It may provide a chance for partners to get in where they had no chance before. They’re not going after customers where customers already have a presence. Even so, if they can convert 5,000 new customers from Dell to HP, then I’m for it."
Industry analysts from Gartner and IDC have endorsed SMB Exchange as a potentially effective program that will allow HP to capture more SMB market share, grow revenue and open opportunities for channel partners. They say that such an initiative is needed to control the cost of serving this market segment, while providing VARs and solution providers with fresh opportunities for services and support.
However, one analyst says HP needs to be candid about the economic realities related to the direct sales component of SMB Exchange.
"HP has to stand up and say, 'This is what we need to do to make money. If you [the channel partner] can’t accept that, then you’ll lose a supplier,'" says Janet Waxman, vice president of hardware channels research at IDC.
Dell is the most frequently referenced competitive target in the SMB Exchange initiative, but Kelly says other vendors are in HP’s sights. They include Cisco, Lexmark and Acer, among others.