HP heads back home to distis

HP India'’s Personal Systems Group (PSG), returning back to its old IT distributors —Ingram Micro, Redington, Savex and Compuage —must have been largely appreciated by its channel partners. The company made this remarkable move after the failure of its telecom distribution model, which perhaps lasted for one year. However, when this new distribution model was introduced there were speculations about the new go-to-market strategy being implemented by HP PSG, after Sunil Dutt came on board as VP and GM, HP India—PSG. Many HP partners were upset with the new distribution model and alleged that the vendor had sidelined them in favor of the telecom partners.

But now as the company is moving back to its original model, market buzz is relating it with the stepping down of Dutt and because of a slump in sales of HP’s consumer range of laptops and desktops. According to a statement issued by HP, “Our channel strategy remains the same and the current improvements are in line with our objective to drive profitable growth, both for HP as well as its channel partners. Presently, we are rationalizing the number of partners to achieve greater efficiency and faster go-to-market execution of our strategy. In fact, our focus is to emphasize the importance of the IT channel in driving growth for HP.”

DISCONTINUES TELECOM RELATIONSHIP
HP, has already replaced 7 out of 9 telecom distributors and nearly completed its realignment process as well. Telecom channel partners are avoiding to give any specific reason for leaving HPÂ’s business. In Mumbai, HP has removed Priyanka Telecom as its zonal distributor, followed by 4 regional distributors including RSG Telecom, Shree Siyaram Technologies, and Pacific Citiphone.

Mumbai-based Chirag Suresh Shah, owner, RSG Telecom, HP’s tier-2 telecom partner, said, “"We were appointed by HP in June, 2010 as their regional telecom partner, and within 10 months, we have decided to discontinue the sale of HP laptops and desktops. As of now, our huge payment claims have been stuck with HP, so we do not want to comment further on this matter."
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Similarly, Manish Agarwal, MD, Priyanka Telecom, HP’s zonal distributor for consumer PCs, confirmed that they are no longer doing HP’s business and are going under the transition. Also, a spokesperson at Pacific Citiphone, a tier-2 HP PSG partner stated that they are out of HP’s business and are now focusing on Dell’s business. Rajeev Mehta, CMD of Delhi-based Zest Systems, said, “HP’s decision to move back to IT distributors at this stage may not be a bad idea. Since, HP has worked with these distributors before, we see more value camping on the table for partners.”

REALIGNMENT COMPLETE
The company began its IT distribution realignment after the exit of Sunil Dutt, who has now been replaced by Rajiv Srivastava as the GM and VP of HP PSG with effect from June 1, 2011. The company is also appointing new sub distributors and forming new channel centric polices. As per HPÂ’s realignment model, Ingram Micro will replace Unicom Telecom in Punjab and Chandigarh, and Shalimar Enterprises in Haryana and Himachal Pradesh.

Delhi and NCR will continue to be managed by Spectra, while Uttar Pradesh and Uttaranchal will remain with Shivalik. Bihar, Jharkhand and Orissa will be taken care of by Redington, which were previously managed by Karuna Management. West Bengal and the North East will continue to be with Linkworld Distribution, while Savex Computers will take care of Mumbai, Maharashtra, Goa, Madhya Pradesh, Chhattisgarh and Rajasthan. Gujarat will be with Compuage, and Ingram will look after the large format retailers.

Anil Jagasia, MD, Savex Computers said, "“We have replaced Priyanka Telecom in Mumbai and Aditya Telelink in Rajasthan. Additionally, we will continue to supply to HP World retail stores, which accounts for more than 280 stores across India.”"

HP LEARNING FROM MISTAKES
IT channel partners not only welcomed HP’'s move but also looked interested in going back to its old business. Welcoming HP’s move to go back to the old model, Toshy Mathew, district president, AKITDA said, “AKITDA was the first to oppose this move. However, the decision was taken for the sake of partners, but the way it was implemented was not acceptable to our association. Meanwhile, our members are not affected, as we do not have any telecom partner in Kerala.” While welcoming HP’s recent move, Jagasia said, “"I think HP has taken the right steps by going back to the national IT distributors. Our partners are also bullish about their new strategies.”"

However, there is no change in the South region, Redington will continue to supply in Kerala and Tamil Nadu, and Ingram Micro will operate in Andhra Pradesh. HP has added a few new sub distributors in Kerala. Kerala-based Binu Varghese, GM, Aldous Glare said, “"There is no change in zonal distribution, Redington is supplying in Kerala. Moreover, HP has recently appointed 5 tier-II sub distributors in Kerala, and we are one of those for HP."” He added," “Earlier, we discontinued our relationship with HP due to its exclusivity rule, but now we are again on board. We are delighted to know that HP is returning back to the old model and restabilizing links with old partners. I think the new change will help HP achieve its lost glory and take the competition head on.”"

Although some regional distributors are happy to go back to HP and join their business, Delhi-based Park Network, one of the oldest and strong RDs of HP doesn’t seem optimistic about the same. Ajaya Kumar, CMD, Park Network said, “"As of now, we have no plans to go back to HP, but we are happy that the vendor has learnt from its mistakes."”