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HP Promises Enterprise VARs 38 Percent Discounts On PC Blades

Hewlett-Packard is promising margins of up to 38 points on its PC blades beginning Nov. 1, an HP executive said at CMP's XChange '06 conference.

"I never thought those words would come out of my mouth in the PC business," said John Snaider, vice president of HP's Personal Systems Group Americas for business PCs, who announced the hefty margins to solution providers attending the XChange '06 conference in St. Louis, held by CRN publisher CMP Technology.

The 38 points represent the discount off the list price that HP will offer to the channel, Snaider said. Typical desktop PC margins are seven points to eight points off the list, he added.

Jennifer Shine, president of eMazzanti Technologies, a Hoboken, N.J.-based solution provider, welcomed the price break. "As you're growing your managed services business, having those kind of elements [blade PCs in the data center] very reachable and very monitorable provides a huge value," she said.

Still, Shine acknowledged that the 38 points off the blade list price likely wouldn't translate to 38 points of margin for solution providers because of discounting.

There's also a caveat to the blade margin promise: Snaider said that only HP enterprise solution providers are authorized to sell the PC blades, and only enterprise distributors Avnet and Agilysys are authorized to distribute the products.

"This is going through enterprise distribution, so it's new and different for PCs," Snaider said. "It won't go through typical volume distributors. The thinking is to keep the value. They [the enterprise distributors] are in the best position to deploy this solution. This is not like a desktop that you just throw over the fence and sell 10,000 units and expect people to know what to do with it."

VARs must set up the architecture to service the blades, Snaider said, adding that enterprise solution providers are used to dealing with blade servers and consolidation. "That's what we are talking about here," he said. "This is something new to the core volume space. This is a different animal."

In addition to being enterprise HP solution providers, VARs selling the PC blades must go through training in order to be authorized to sell the systems.

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