The HP/CDW deal from a Canadian perspective

When I first heard of the leaked CDW memo that read “HP to co-fund 110 new HP-only sales people inside the American solution provider” I thought wow, the channel is not going to like this one bit.

Luckily though, Canadian VARs needn’t worry because HP Canada and CDW Canada are not looking to bring this arrangement here. An HP Canada representative and Mary Ann Yule, the general manager of CDW Canada, confirmed to me that this is not happening, nor is it on their radar screen.

However, one senior channel chief told me that HP is open to bringing this arrangement to CDW Canada. Now, whether it makes it up here on not, if you look at the co-funding deal on its own I have to say that it does make some sense.

This type of co-funding arrangement solves two big problems in the channel: finding qualified people that can sell IT solutions and growing the bottom line.

I can’t see a downside to it. I don’t think a reseller will care if they sell more HP than IBM or what have you, so long as sales are going up. Finding and training people is a challenge to say the least. If you are already a strong HP reseller I see no harm in having your vendor partner do all the leg work for you at virtually no cost.

And this HP/CDW US-only co-funding plan is being looked over by other vendors. This same senior channel chief said it would be better for him to invest inside the partners who are the main feet on the street for his organization rather than his own company.

The only downside to this plan is that it must be managed tightly by both parties. If it’s mismanaged then its basically wasted money. Another option is to fund an employee for a year, and then if the channel partner decides to retain that person the vendor partner will fund a new employee for the next year. This way, the skills sets of the channel partner are up-to-date with that specific vendor.

This sort of arrangement reminds me of car dealerships. Channel partners are already being asked to specialize; why not specialize on one vendor or maybe just a handful of vendors?

If this plan ever came to Canada it would send a warning signal to many solution providers to really become trusted advisors to their customers. Let’s face it: solution providers should not compete solely on price. They have to become the leading experts in IT in their local community and service customers to the max.

By doing this, and gaining trusted advisor status, you can compete and make better margins.

Three quick hits before I go. John Tennant, after six years at Canada’s Technology Triangle, is leaving the organization based in Waterloo. He will be replaced by John G. Jung. Tennant will be missed. He did diligent work at the triangle and was a tireless worker for the organization. Jung will have big shoes to fill.

Also Robert G. O’Malley, CEO of InFocus was elected chairman of the CompTIA board of directors at the association’s annual Breakaway conference.

And, Dao Tran will be leaving High Road Communications, which is Microsoft Canada’s PR agency. I wish her well.

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