Does HP Really Need a Channel? Really?

2009 -

The answer is Yes, HP needs a channel. But read on...

What's more, HP just may be "getting" this MPS thing. (tongue in cheek)

As we have witnessed over the past few months, Hurd's herd, has openly marketed their old, tried, and true MPS programs(SPS?).

The HP "guarantee" is the latest salvo.

To be sure, HP has been pushing the MPS program at the Enterprise level for years and any HP IPG VAR has had, in the past, little reason to fear the "mother ship" swooping in on their smaller, B2B business.

Everything changes, that's a fact...

With few new equipment releases, reduction in R&D, and decentralize MPS programs for the channel - through partnerships with Great America, Synnex, Ingram, etc.- comparatively, the HP MPS plan for the channel seems a bit less focused.

There's nothing like the 23 module behemoth from Ricoh, or the easy to use Xerox PagePack 3.0 or entry level, scalable programs from Toshiba, Oki and Samsung.

What gives? Gartner's analysis sheds some indirect light on the subject:

"HP lost 3.4 percentage points market share to total 40 percent market share in the first half of 2009 as it maintained a tighter control over its channel inventory levels amidst weakening demand."

Hardware sales are soft so where does one look to increase revenue in an equipment slump?

Managed Print Services.

HP's existing client base is huge and contains large enterprises that utilize 1,000's of HP printers - MIF.

And what's the number one place to look to for that low hanging fruit? Your existing client base.

Unlike a good deal of VARs and dealers in the channel, HP is not afraid to let their highly trained MPS specialists waltz into an ITG account and start pitching MPS.

That's the easy stuff.

As for SMB MPS channel; if equipment sales are down, why bother working through an unproven, inexperienced channel partner when the plan is to REDUCE the number of units sold?
So,

The best way for HP to dig into the SMB Managed Print Services treasure chest is direct, not through a channel.

Woah...wait, what, huh?


That's right.

The hot, new revenue stream is MPS, and does not require selling equipment - indeed, the exact opposite should happen. There is no reason to work with a VAR selling pure MPS services, services which reduce the number of HP's or xerox, Lexmark, or anyone's boxes.

HP can provide MPS directly on a national, global basis - why not locally? Why not right in your backyard?

So the recharger folks are freakin scared? The rest of us are simply in bliss.

Fear not, dear HP VAR and IPG SVIP OPS reseller - the news is good and it comes from across the pond.

Alan Hatfield, Channel Development Manager at HP, out of Gloucester, United Kingdom, was looking for a UK growth target of 100% between the months of May and September.

To increase ANY type of business by 100%, in only 6 months, is a lofty and seemingly unrealistic goal, but Hatfield expects to see a 90% increase.

And within this growth, Hatfield believes MPS sales are split 50:50 between direct and the channel.

“HP is very committed to having a good platform for our partners because MPS is the future,” he says. “Most of the conversations I have with channel partners are around managed print services.”

Our friends over at Photizo Group estimate the MPS market be more than $50bn by 2013, with more than 50% of all devices coming under MPS contracts.

If the ratio's from the UK/Europe hold true, that's a paltry $25 billion for us in the channel...so who cares if HP needs or doesn't need a channel - figure it out.

One source article here.