HP distie rebate cuts may lead to server price rise

Resellers are facing a potential price rise on HP servers and storage from next week as distributors try to claw back some cuts made to back-end margin. Starting 1 May, the US tech monster will slash the 1% volume PFR rebates paid to ProLiant and StorageWorks wholesalers but will give them a fee for

Resellers are facing a potential price rise on HP servers and storage from next week as distributors try to claw back some cuts made to back-end margin.

Starting 1 May, the US tech monster will slash the 1% volume PFR rebates paid to ProLiant and StorageWorks wholesalers but will give them a fee for generating demand in the tier of resellers not managed by HP.

Kevin Matthews, HP UK and Ireland enterprise servers and storage channel manager said paying distributors to manage Gold partners it worked with directly did not make sense.

"We are trying to re-balance [the investments]," he told MicroScope, "I'll pay [distributors] a fee for serving existing large resellers but I'll pay more for developing new business."

The overall channel compensation envelope remains the same HP insisted but sources suggest distributors will be left slightly out of pocket.

Jon Bunyard, director of enterprise servers and storage at Ingram Micro UK, said: "We are currently reviewing the price impact of the changes announced." Meanwhile Mark Walker, director of servers and storage at Azlan said: "We are modelling the impact."

There will also be changes to reseller compensation as well with an Industry Standard Servers (ISS) PFR bonus paid to non specialist partners that achieve on target earnings (OTE) cut from 1% down to 0.8%.

However, MicroScope understands the bonus for DSS, SSS, HPC and VSS specialist partners has gone up marginally to 1.3% for OTE and the accelerator for partners that achieve 100% OTE for SWd will result in boosting ISS bonuses by 1.15%.

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