HP Reaffirms Reseller Channel Commitment After CDW Flap

By Jessica Davis  |  Print this article Print

News about an HP/CDW co-marketing plan had reseller channel partners sounding the alarm about potential channel conflict. But an HP executive says that HP does not approve co-marketing plans that don't include incremental revenue. HP can even go in after the plan is in place and change it if the company finds the deal is causing channel conflict.

A top Hewlett-Packard executive has reaffirmed the company's commitment to all its channel reseller partners a little over a week after a leaked memo revealed a deal between the vendor and direct market reseller CDW that raised questions about potential channel conflict. 

Web site ChannelWeb first broke the story of the leaked memo, saying that the HP/CDW agreement called for HP to co-fund 110 new HP-only CDW sales reps to sell HP products into accounts with 499 or fewer employees.  The report says that CDW would use a list of leads provided by HP and built using Dun and Bradstreet's customer list against historical sales of HP products through HP direct, HP channel partners and CDW.

HP Vice President of Marketing and Strategy for HP Solution Partners Organization Tom LaRocca told Channel Insider that while HP creates co-marketing plans with many partners, each plan is created with provisions against channel conflict.  And while he could not comment on any specific deal, he said that those provisions mean that even after a plan is in place, the deal can be renegotiated if it becomes evident that the deal is causing channel conflict.

See the video of HP Vice President Tom LaRocca's response here.

"If we greenlight a plan and there's channel conflict, we'll stop it right away," LaRocca said. "It's written into every single deal.  If it ends up not being incremental revenue, then there is conflict. If there's going to be conflict there, it's not a good investment for us."

LaRocca said that when a partner submits a co-marketing plan to HP it must contain three components before it can be approved: incremental revenue, co-investment and no channel conflict.

The plan has raised alarms across the reseller channel because CDW is known to aggressively compete on price.

Jessica Davis covers the channel for eWeek and Channel Insider. Her technology journalism career began well before anyone heard of the World Wide Web and has included stints at Infoworld, Electronic News/EDN, and the Philadelphia Business Journal. Her work has also appeared on CNN and Forbes.com. She has covered hardware, software and networking, as well as the business side of technology. She has won several journalism awards, including a national ASBPE award for best staff-written column, and was named Marketing Computers hardest working tech journalist on their inaugural list of top tech journalists. Jessica can be reached at jessica.davis@ziffdavisenterprise.com

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