HP Rebate Snafus Force Exclusive Partners To Seek Alternative Vendors

Bert Duval, president of D & B Technologies, an Ashland, Va.-based HP solution provider, said he received a letter from HP notifying him he faced deauthorization from its Authorized Warranty Delivery Partner Program.

HP said in the letter, "Our records indicated that your company did not meet both the $50,000 annual product sales volume and $10,000 in Eligible HP Services sales."

Duval responded to HP with a letter that said in part, "I received a registered letter Dec. 26, 2007 stating that D & B Technologies did not sell $50,000 in HP Product nor did we sell $10,000 in services sales. According to my accounting system we sold $87,000 in DesignJet products, $166,991 in new computer and laptops and $59,276 from your remarket program. That totals $313,276 in HP Product."

Duval, whose $800,000 a year company has been an HP partner for 10 years, says he still hasn't received a response from HP regarding the discrepancy in sales-out data. "The first rule of business is knowing your costs," Duval said. "I can't predict the future [about incoming rebate payments] because nobody at HP can tell me what my sell-through is."

Adrian Jones, HP's vice president and general manager, Americas Solution Partners Organization, said he was not aware of the problems in reporting sales-out numbers. "I haven't heard directly from exclusive partners that they have an issue understanding their goal sheets or progress reports that we send out on a monthly basis," he said.

He added that HP, Palo Alto, Calif., has undergone significant consolidation in its data centers over the past two years, going from 85 down to three. "But it should not—and has not affected—partner progress reports. If the data is not matching, I will take that up as an action item with my operations team. But I have not heard that."

HP partners, however, said they've voiced their concerns to HP without finding a resolution to the problem.

Jones noted, without giving specific numbers, that HP's spending on partner rebates has increased in double-digit figures over last year's spending.

Strong Growth, Lingering Frustration

While many of the solution providers interviewed reported overall strong growth in their HP business, many said the Attach Plus rebate program is broken. As a result, something seemingly ideally tailored for HP exclusive partners is instead leading to a perception that they're being being squeezed instead of rewarded.

"We are growing our business, but we are doing it without a lot of synergy from HP," noted one HP Gold partner, who asked not to be identified.

Jones said that HP values its exclusive partners, but that all partners are treated the same. "Most of our exclusive partners are out there being exclusive because they saw they could have the whole range [of products] and sell a different solution than some of their competitors," he said. "We are very loyal to our partner base, whether they are exclusive or non-exclusive. We don't have a rule change from one to the other. Are we going to treat exclusive partners differently? We treat all partners the same. But there is an opportunity for exclusive partners to sell more of HP's portfolio, which gives them a richer financial reward," he said.

One HP Gold partner noted that Hurd has told exclusive partners that HP should treat them more as family members. "But when you bring that up to any HP executive other than [Chairman and CEO] Mark Hurd, they'll shake their heads and say we don't treat you differently. Because of that, there are a lot of HP-exclusive partners that are looking at other vendors. We have no choice," the partner said.