By Ramdas S, CRN, September 3, 2010, 1200 hrs
An IT channel association from Chennai, SNEHAM, will organize a silent march on September 14, 2010, to protest against the new channel policies of HP PSG. The association also plans to boycott Best Source Infotech, the newly appointed HP regional distributor.
“Last week during our general body meeting, all members unanimously decided to proceed with a silent procession equipped with placards to highlight our grievances in front of HP office in Chennai,” said R Kumar, secretary of SNEHAM. “We have also decided not to buy HP products from Best Source Infotech till HP solves the issues that the implementation of new business policy has raised.”
Earlier in July there were protests reported in two of HP channel meets in Chennai. Several partners reported unhappiness over appointment of an outsider, Best Source. The distributor is coincidently promoted by Ashok Jain, whose family promotes Supreme Computers in Bengaluru.
However, Kumar downplayed the outsider issue. “It’s true that several of us are unhappy that HP has decided to sign up with a distributor from outside Tamil Nadu, and a company was registered and formed to start this business. But what we are more upset about is that an exclusive RD has been appointed for Ritchie Street, which happens to contribute 80 percent of sales of the region. Appointing an exclusive RD will result in unfair monopolistic trade practices especially when the market size is as large as Ritchie Street,” he alleged.
Kumar said that earlier SNEHAM had written to HP top honchos addressing the concerns, but there have been no satisfactory replies.
Partners also pointed out some flaws in the new channel policy. “While HP has ensured good margins for both zonal and regional distributors, there are no specific benefits for the resellers on the street addressing the end user. We are still unable to understand how the policy will benefit us. While exclusivity protects the interests of the RD, it does limit the choice of a partner operating in the market, unlike previously there were choices to buy from multiple sources” said Tejinder Singh, CEO of IT retail chain, Access.
However another partner from Ritchie Street, on a condition of anonymity, has alleged that HP’s policies have hurt sub distributors more than resellers. “Earlier almost 7 or 8 sub distributors in Ritchie Street used to handle the HP business. The new move limits it to just one entity. Obviously others will be upset. HP is the biggest brand in business, and everyone wants a pie of it. However, now HP has alienated several strong sub-distributors and the resellers who generally buy from these sub distributors.”
The source further added, “There’s a general perception that since the owners of Best Source and Supreme Computers, which by far the largest sub-distributor in Chennai, are related, Supreme will become a bigger force in Chennai market, and its competition does not like that one bit.” |