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Hewlett-Packard is aiming to reshape the competitive landscape with lucrative new back-end rebates under a unified PartnerOne channel program aimed at driving global sales growth and market-share gains against competitors such as Cisco Systems and Dell.
Among the biggest HP PartnerOne changes, which will take effect at the start of HP's fiscal year 2014 beginning Nov. 1, are an 18 percent back-end rebate for top-tier U.S. Platinum converged infrastructure specialists selling HP networking and a 5.5 percent back-end rebate for U.S. Gold cloud builder/storage specialists selling an HP CloudSystem with 3Par storage.
HP also is providing new back-end rebates on its Printing and Personal Systems product line, including for the first time a printer supply sales growth bonus and a business group bonus and sales quota accelerator that could amount to as much as 11.5 percent in back-end rebates for an HP Officejet Pro X sale by a Gold partner.
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Partners say HP is changing the economic rules with the new program, which relies heavily on highly profitable back-end rebates to drive sales growth. They say that the new PartnerOne program may well represent the biggest single investment in a fiscal year to drive sales growth in the history of the channel.
"The economic benefits for us are huge," said John Monahan, executive vice president of sales and co-owner of Convergent Technologies Group, an HP-exclusive partner based in Midlothian, Va., that is planning to add five to seven employees to make sure it achieves top-tier HP Platinum status. "The additional [rebate] income we are going to see from the program is pure profitability as long as we stay on pace with what we are currently doing. HP is doing wonders for an organization like ours. Other manufacturers are going to have to get creative and lower their prices to compete with HP."
HP is scheduled to formally launch the HP PartnerOne global contract terms and conditions Tuesday at the Canalys EMEA (Europe, Middle East, Africa) Channel Forum in Barcelona, Spain, with Latin American terms and conditions slated for release Nov. 1. The Canalys Channel Forum includes top vendors and distributors and will feature addresses by new Senior Vice President of Worldwide Indirect Sales, Enterprise Group Sue Barsamian and Senior Vice President of Worldwide Sales, Printing and Personal Systems Jos Brenkel.
HP, Palo Alto, Calif., said the new rebate terms for each of the four program tiers are available via the PartnerOne Compensation Matrix on the PartnerOne portal. Total PartnerOne compensation consists of three elements: core compensation with an accelerator for hitting sales growth targets; new business opportunity rewards; and strategic product bonuses fixed for a minimum of six months aimed at rewarding partners with back-end rebates for key products such as 3Par and HP wireless networking.
HP's top-tier Platinum partners have the potential to earn a whopping 25 percent more in rebates than Gold-level partners, while profitability for HP partners selling the full HP portfolio is expected to increase as much as 20 percent, according to HP channel executives.