Resellers serving the small business market can now add Hewlett-Packard to their line cards thanks to a new initiative launched by Synnex Canada allowing non-authorized VARs to carry some HP products.
The new HP registered partner program gives small business resellers access to a select arsenal of products such as HP iPaqs and Pocket PCs, HP Smart Buy desktops, notebooks and workstations, servers, stand-alone tape drives, storage media and autoloaders as well as related options and Care Packs.
According to Mitchell Martin, president of Synnex Canada’s broadline division, the distributor has been contacting a target list of non-HP authorized resellers that are actively selling into the small business market.
And although Synnex has been strong in this space, said Martin, “the overall challenge is that small business adoption of technology has been low, and Canada particularly has been problematic, because of the nature and landscape of the marketplace.”
One Vancouver area small business VAR is optimistic that the brand name recognition will offer more complete solutions to customers that want HP products.
Joseph McLean, founder and president of Second Flux Information Services, said that since signing on to the registered program HP’s server offerings have been valuable to his business.
“This program includes some impressive servers in the $2,000-$4,000 range, nice servers for a small to medium business,” said McLean. “It’s an area where I’m actually seeing a good amount of growth. A large number of businesses haven’t seen value in having a server at all. Its nice to offer them something that has the HP name and reliability.”
A big issue both HP and Synnex face in attempting to reach the small business segment, Martin said, is that some manufacturers sell direct. “But I think if we can better engage the channel, a reseller has a greater ability to influence the adoption of technology than the direct model, which is very telemarketing oriented,” he said.
For HP this program presents an opportunity to improve penetration into this small space – a low market share category for the company, said Martin.
According to IDC Canada, HP’s PC (desktop and notebook) market share in the small business segment (10-99 employees) was 15.7 percent for the first three quarters of 2005.
“I was very vocal with all of our partners, both existing resellers and distribution partners, throughout 2005 about entering this segment,” said Dave Frederickson, vice-president of HP Canada’s solution partner organization. “Many were upfront that they were not or less interested in going after this space with us.”
There has been little reaction to the Synnex program from HP’s current partner base, said Frederickson.
“I’ve had a number of conversations letting them know what our challenges and opportunities are in this space. We’ve been able to strike an effective balance, making sure that we have as many controls as we can around this program while still keeping our focus with existing authorized partners,” he said.
The HP registered partner program will hone in on a number of smaller partners and potential system builders, Frederickson added, that are interested in carrying a brand such as HP to go after that small space.
“Our intention is to leverage our distribution partners to focus on areas that we’re not necessarily as focused on,” he said.
“We have a lot of resources we put into partners that sell to the medium, enterprise and public sector space. The small space is growing at a rapid pace and distributors are a good vehicle to reach that market.”
Since the start of the campaign early this month, Synnex has signed between 500 to 1,000 resellers to the HP registered partner program, said Martin.
So far the program is only offered by Synnex Canada, which initiated the idea. But Frederickson said he’d like to extend it to other distributors.
McLean, who started Second Flux in Vancouver ten years ago and has only five employees, said the potential for margins from HP products look good.
“In this day and age none of us have rosy expectations of margins,” he said. “On an industry average, I’m happy with the margins I’m seeing but I’m happy to be able to just offer HP.”
