VARs Feeling Pinch From HP's Ties With Large Resellers

Though the issue has existed for some time, it's now reaching the point where the viability of the enterprise storage channel is in question, solution providers said. Savvy customers, for instance, now have solution providers invest in designing a storage infrastructure for them, and then they call CDW for the best product prices, said Don Richie, CEO of Sequel Data Systems, an Austin, Texas-based HP partner. HP also requires solution providers,but not CDW,to be certified and have face-to-face sales capabilities, he said.

"It's an issue of fairness," Richie said. "If you are going to require HP partners, who have been with HP for years, to belly up to the table for the requirements, why allow CDW to offer the same products?"

All CDW brings to HP enterprise storage sales is a way for customers to get rock-bottom prices, said Rich Baldwin, president and CEO of Nth Generation Computing. The San Diego-based HP partner, which employs two engineers for every salesperson, has invested heavily in enterprise-class services, Baldwin said. But more and more customers are requesting storage infrastructure designs and then going to CDW for lower prices, forcing Nth to cut its margins, he said.

"I'm probably HP's best salesperson," Baldwin said. "The amount of frustration is growing."

CDW has been enterprise-authorized for two years, so this situation is nothing new, said Ed Burke, director of advanced technology for the Americas in HP's Enterprise Channels group. "With face-to-face contact, in every way, a full solution provider has the advantage over CDW," he said. "You can't sell enterprise storage over the phone. I can't think of a single deal that a solution provider has lost to CDW."