HP CEO Weisler: The Channel 'Trusts Us' But Not Always Others


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HP CEO Dion Weisler Thursday reaffirmed his commitment to driving sales through partners singling out the "trust" solution providers have in HP in an intensely competitive "omnichannel" market.
 
With HP driving 87 percent of its $51 billion in annual sales through the channel, Weisler said the company's partners are at the center of a critical shift from transactional to contractual recurring revenue selling models like device as-a-service.
 
 
"By the way they trust us," Weisler told analysts after the company issued fiscal 2018 earnings guidance at the high-end of Wall Street expectations. "They don't always trust other people."
 
Weisler's comments came just several weeks after rival Lenovo slashed back-end payments, spiffs and program discounts in a series of moves that partners say will ultimately result in solution providers shifting some business to HP and Dell.
 
Lenovo is eliminating the "cost-minus" pricing structure that allowed distributors to offer discounts to partners while still maintaining gross margin, sources said. Solution providers expect the changes to cut their Lenovo profit margins, in some cases by as much 30 percent to 50 percent.
 
In response to a question on rival channel changes, Weisler (pictured) said there is "change all around us – a lot of it driven by omnichannel and its implications" on how customers consume PC and printing offerings in the future.
 
"In much the same way that our big industries – the Personal Systems and the Print industries – are consolidating, there is consolidation going on even at the distribution level with some of our partners and at the reseller level," he said. 
 
"The channel remains the most efficient route to market possible, in my view," Weisler continued. "We do 87 percent with or through the channel because they are an amplification of our sales force and they are able to reach many more people in a more efficient way than we would be able to do and add incremental value to our base platform."
 
Weisler said the strategies employed by rivals change quarter to quarter and region to region. "We have our different competitors deploying different strategies; some are very consistent, some seem to move around a lot," he said. "What we need to do is keep our finger on the pulse and ensure that we are playing our own game – not playing anybody else's game."
 
Weisler said it is critical that HP remain  laser focused on where the markets are going, differentiate with significant innovation and then work with "channel partners to layer value  for our customers and then deal with our competitors in a very aggressive and responsible way where we take profitable share."
 
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