Nemertes Impact Analysis

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HP Picking Favorites: What Happened To Playing Nice With The Channel?

Last week, a memo from privately held CDW exposed an alliance between HP
(NYSE: HPQ) and the large reseller that entails a new co-funding strategy
targeting small and midsize businesses. HP will provide CDW 500,000 customer
names for CDW to target.

In general, resellers say manufacturers don't filter customers to them. Data
collected for Nemertes' upcoming report, The Business of Reselling IP
Telephony, show a majority of resellers (79.9%) say their vendors rarely
help them connect with new customers, and 23% of them say they never receive
customer leads from their vendors. The exceptions are those considered top-tier
partners. Although it's common practice for top tier providers to get more
leads, sharing 500,000 SMB customers with just one reseller could severely cut
into the profits of regional resellers and large distributors such as Ingram
Micro, Avnet, and Tech Data Corp.

Impacts:

Enterprises: HP SMB customers will start hearing from CDW. Take the call, but
pressure CDW to explain what pricing or service benefits you'll get from them
over going directly to HP or from other resellers.

Vendors: Partners want help with lead-generation. Selective assistance may
cause 62.5% of partners who say they work with a single vendor to rethink that
strategy.

Investors: Keep an eye on HP and CDW. Joining forces could increase their SMB
customer base, and potentially hurt Dell (NASDAQ: DELL).

Katherine Trost, Research Analyst

http://www.crn.com/small-business/209904539?cid=ChannelWebBreakingNews