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below the better HIP (HP integrated companions) plan, HP will abandon its charge-for-services relationship with its three commercial enterprise distributors,Arrow Electronics, Pioneer-usual Electronics and Avnet hall-Mark,on Nov. 1 and as a substitute permit them to take title to products and set pricing for VARs.

HIP assess:

changes under HP's new application.

>> Distributors will take title to product and publication earnings as suitable-line salary.>> Distributors, now not HP, will set solution issuer pricing.>> VARs should align with a single HIP distributor and negotiate coupon codes.>> enterprise storage is now protected beneath software.>> Ingram Micro added as HIP distributor for storage most effective.

but answer suppliers attending HP World ultimate week in Atlanta observed they have been caught off guard by using the alterations and that HP has yet to barter pricing with the distributors.

"i'm a little disillusioned that they had to read about this and had been no longer told of the alterations with the aid of HP," observed Don McDowell, vice president of server options at Forsythe solutions group, an answer provider in Skokie, unwell. "If this has a Nov. 1 set off, they need greater than 10 weeks to plan strategy. This could disrupt end-of-yr business. My situation is that the brand new pricing model will exchange the economics, and i expect my costs will go up."

HP pointed out the alterations will drive boom in its commercial enterprise company. "we have preserved the biggest step forward of HIP, which changed into the deliver chain factor, and they have spoke of to [HIP distributors&#ninety three; that you've got extra flexibility and incentive to force extent and enrich your charge constitution," noted Jim Milton, managing director for the Americas and senior vp of HP's business methods group. "via empowering the channel, they win more on the top line and the final analysis as they pump extra quantity via this model."

below the new plan, as during the past, answer providers must select just one HIP distributor. "We must work out who we'll purchase from and at what price," stated Mike Cox, president and CEO of Logical, HP's largest North American commercial enterprise solution company. "we'd like to continue to purchase from Arrow, however they are frustrated because pricing is never set."

Cox noted Logical, Bloomfield Hills, Mich., has been approached via all the HIP distributors however cannot opt for one except pricing is determined. "The actual price-add &#ninety one;from distributors&#ninety three; is cost. it be as a minimum equal to every thing else put together."

under the existing HIP mannequin, HP set costs, direct-shipped items to the VAR or its consumer, and paid distributors a fee for coping with sales and guide logistics.

After Nov. 1, HP will sell products at a discount to the distributors, which, in turn, will mark them up and sell them to solution providers. subsequently, HP's commercial enterprise distributors will e-book product earnings as correct-line revenue.

beneath the stronger HIP structure, HP additionally will add enterprise storage items to the program, which presently comprises HP 9000 Unix methods and business utility.

Ingram Micro will also be introduced as a distributor for business storage best.

Distributors, for their part, pointed out the alterations to the HIP model should still be clear to VARs. They stated the most effective difference beneath the new mannequin is that distributors might be extra worried with pricing than earlier than.

"We were an agent to HP &#ninety one;below the ancient mannequin]," talked about Charles McPherson, vp of income and advertising for Arrow's SBM division, Englewood, Colo. "What they want now could be greater involvement from us at the reseller stage with the aid of choosing cost."

however as HIP distributors scramble to sign in VARs by Nov. 1, Patrick O'Connor, vice chairman of advertising for HP worldwide at Cleveland-based mostly Pioneer-standard, stated, "i am hoping that pricing is not the primary consideration."


 

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