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Late last month the Kerala channel association, AKITDA, and HP’s Personal Systems Group, reached an agreement to end the month-long stand-off which saw
AKITDA and its members boycott HP products in Kerala.
As we had reported, AKITDA had imposed an embargo on HP products in protest against the vendor’s new distribution policy for consumer PCs.
As per the agreement reached, HP’s PSG team has agreed to review its appointment of telecom partners as RDS in the state. However, it has remained firm in its demand for regional and brand exclusivity. AKITDA believes that it’s a big victory for the association, while HP PSG will be happy that the protests have come to an end.
Have they? I had a look at the e-mail sent to AKITDA by Parikshet Singh Tomar, the HP Consumer Channel Sales Head, and after analyzing it I believe that the truce will be short-lived. While AKITDA had raised a specific issue regarding the removal of telecom partners as RDS and appointing IT sub-distributors (SDs) in their place, the response from Tomar isn’t very specific. He wrote, “We are open to re-evaluate the RDS appointments in Kerala as long as we have the support from IT partners. Only for Kerala, we will be open to continue to support the selling of our products through the IT channel.”
I doubt if HP can afford to have such an arrangement exclusively in Kerala because SDs in other regions will surely demand the same. The other issue is the allegation which has been gaining ground among SDs that in many regions HP and its zonal distributors have appointed certain partners as RDS even though these they continue to sell competing brands.
For instance, in Chennai, one of the RDS appointed by HP is reportedly run by a family member of Supreme Computers. While Supreme denies any stake in the said company, partners in Chennai allege that both companies are related.
In Maharashtra, partners allege that Computer Shoppe, one of the RDS for Nagpur, is a sister concern of multi-brand SD Business Algorithms. In Mumbai, Geonet IT continues to operate its multi-brand stores along with HP Worlds though many other retailers in the same boat have been asked to convert their multi-brand stores to HP Worlds.
Many channel companies which have signed up as HP RDS have told me that the exclusivity clause doesn’t exist in the partnership contract. HP has refused to give them in writing that exclusivity is mandatory. Partners argue that HP should have made it a part of the contract. By not doing so it has diluted its own credibility.
Maintaining consistency in the policy framework is key to a partner program and by making exceptions in one state; HP PSG may have only compounded its problems. |