HP takes top print business direct

HP's Imaging and Printing division (IPG) would sell direct to 200 of its top customers under a new program aimed at maintaining its share in the market for 'converged' printers and copiers.

Under its new Corporate Account Program (CAP) HP would target customers that spend more than $100,000 a year on printing and imaging products and services. All hardware would be purchased by these customers direct. The HP channel, however, would still be able to sell supplies to these top customers.

According to Rebekah O'Flaherty, general manager, HP IPG, South Pacific, HP was hoping to procure direct to 150 customers by the end of 2005. These customers - of which 40 percent are competitive sites - would make up around 10 percent of HP IPG's sales revenue by that time.

HP had also 'doubled' the number of its account managers working within the CAP program and with channel partners, O'Flaherty said.

The CAP program would make up 3.4 percent of IPG's sales revenue for the current fiscal year, she said, with the remaining 96.6 percent open to channel partners.

O'Flaherty said the converging between print and copy functions was becoming a reality. 'I had an IT-centric channel that sold printers as a peripheral afterthought. A key piece of our market is under threat if we don't do something.'

O'Flaherty said the company had been at work training reseller technical and sales teams on how to position 'converged' solutions to their customers. 'Resellers are now competing against copier vendors who have sold on an annuity or pay-per-use basis,' she said.

She admitted that in the converged printer market, 'Canon and Xerox were eating our lunch'.

HP estimated that by 2008, one in two SMB customers would purchase printers as a pay-per-page contract.

HP IPG's distributors, Synnex, Tech Pacific and Ingram Micro, as well as its top resellers, had been advised of the changes during meetings. The remainder of the HP channel received a letter, O'Flaherty said.

Colin Pederson, director at HP reseller ComputerLand in Tasmania, which sells around $1 million worth of HP IPG products each year, said the IPG changes may result in some reseller account managers looking to sell a competing product. 'If there's a big opportunity, all the reseller will do is say "I'll go and sell a competing product [into the account]",' he said.

He was unsure whether any of HP IPG's named accounts would be in Tasmania. ComputerLand took on Acer earlier this year, after being forced to buy through distribution with HP late last year. The company previously had a direct relationship with the vendor, Pederson said.