HP Europe resellers desperately ‘seeking new vendors’

In September 2001, channel research house Context polled European resellers for their opinion of what HP would be like following a takeover of Compaq.

Two years on, the company has revisited those resellers with the same questions. The outcome is somewhat different. In September 2003, Context asked 467 European dealers how the merger had affected them.

Here's the summary:

• In September 2001, 75% of resellers polled said the merger would result in a new HP that was "stronger". Today, 49 per cent believe this to be the case.
  
  
• 15 per cent of resellers reported customer reaction as "positive" on news of the merger; 29% are now said to be "positive" to the reality.
• Only 18 per cent of resellers polled in September 2001 said they were considering selling other vendors' products; 46 per cent say they are now actively doing so.

. "There's little doubt that what European resellers expected two years ago is quite different from their reality today," says Jeremy Davies, Context senior partner. "Few expected HP to drive change in Europe as hard as they have. The result is a new HP that dominates Europe's channel and accounts for over 35% of the business today."

So the good news for HP is that more customers are positive about the merger than before. The bad news is that this is still only 29 per cent of the customer base.

Of some concern must be the reaction of their resellers. HP wants to squeeze as much cost out of the reseller chain to compete toe-to-toe with Dell. It does not need to compete hard for the business of resellers, now that Compaq is in the fold.

It should come then as no surprise that dealers are actively seeking new vendors: no business would want 35 per cent of their hardware revenues tied up with a single supplier.

But what about the fall in the number of resellers (from 74 per cent to 49 per cent) who think that HP is stronger following the merger. This is not encouraging. ®