The Channel's Summer Blockbuster

Summer blockbusters come in all shapes and sizes this season. In politics, we have news that Barack Obama's star is fading. In sports, we have Brett Favre and the New York Jets. In movies, we have the "Dark Knight." And in the channel, we have the news that HP is investing tens of millions of dollars into an SMB sales initiative with CDW. Ah, the dog days of August.

	ROBERT C. DEMARZO
Can be reached via e-mail at rdemarzo@everythingchannel.com.

We broke the CDW-HP story last week on ChannelWeb.com after an internal memo was leaked to us. Obviously, privately held CDW had to let its vendor partners know of the deal, which calls for HP to co-fund 110 new HP-only salespeople inside CDW who will wake up every day with one goal—to sell HP products to businesses that employ 500 or fewer workers. By the way, there will be no shortage of accounts to target because HP is going to supply 500,000 net new customer leads for CDW to chase, after it compared Dun & Bradstreet's database to a list of customers that buy HP goods directly and through channel partners. The CDW-HP alliance kicks off next month and will be fully implemented in January 2009. Happy New Year!

You have to look at this deal from two perspectives. First, how does it impact the vendor community and, second, what does it mean for solution providers who sell HP gear to SMB customers? If you consider the deal calls for those "co-funded" salespeople to sell HP servers, storage, notebooks, desktops and printing products, then no HP competitor will go unscathed. From Acer to Xerox, every vendor that competes against HP has to adjust its SMB strategy—and now. CDW and HP did not release it yet, but the deal includes a list of "agreed-upon complementary vendors" (love that lawyer-speak) that this new sales team can offer to customers. Be assured it will not include a Lenovo ThinkPad, Xerox Phaser 8860 or EMC's Clariion. If a customer wants one of those products, it gets referred to another sales rep. Of course, CDW is inviting any vendor willing to pony up some cash the opportunity to design a similar program.

Vendors better think through their options here. Few, if any, can come close to matching the HP investment, so why bother trying? They could get on the phone with Richard Fennessy of Insight or Patricia Gallup of PC Connection, which would be a wise move. They also need to examine their overall SMB strategy because the collective VAR community is their greatest asset and vendors' SMB strategies are often their weakest programs. The right sales tools, leads and innovative SMB packages (how about a Lenovo-Ricoh combo?) could make a big difference.

Still, you have to hand it to CDW. It is using its size and the fact that it is one of HP's largest partners to create a competitive advantage. Its strategies could be copied by any national or local VAR willing to dedicate salespeople to such an effort. On the other hand, there are going to be many vendors scrambling to find a way to compete against HP in the SMB market, and they just might be willing to invest more in your organization.

Here's to summer blockbusters. What do you think about the CDW-HP deal? E-mail Everything Channel Senior Vice President and Editorial Director Robert C. DeMarzo at rdemarzo@everythingchannel.com.