Tell me about how HP deal registrations work
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If I want to obtain 3 quotes for some HP kit, is it true that the first reseller could register the deal to obtain bigger discounts, and this would prevent the other two resellers from getting the same price? Is that how it works? It seems unfair from our point of view.
Also, when are deals registered? Is it only for big projects? I'm after a new Proliant server with a budget of around $10k. I'm guessing that would be considered too small to do a deal registration?
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@Carnival-Boy said:
If I want to obtain 3 quotes for some HP kit, is it true that the first reseller could register the deal to obtain bigger discounts, and this would prevent the other two resellers from getting the same price? Is that how it works?
Correct
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@Carnival-Boy said:
It seems unfair from our point of view.
Why? HP and it's partners simply act as a single entity here. You point is that you cannot take the HP ecosystem and try to play them against each other to erode their value. HP works through their partners and to do so must protect them. HP and its partners are simply a single entity to you, not many.
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@Carnival-Boy said:
Also, when are deals registered?
Depends on the partner. Immediately if they feel that you will try to deal shop, likely never if you have a good relationship and they trust you.
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@Carnival-Boy said:
I'm after a new Proliant server with a budget of around $10k. I'm guessing that would be considered too small to do a deal registration?
Ah, HPE not HP. Same story, but not the same company. Likely they have the process automated - generating a quote generates registration. Probably no human is even involved. You are talking about their bread and butter. They would not skip this step very often because it is how they put food on the table.
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And this process is not unique to HP, HPE or anyone. It is the industry standard for all enterprise vendors. Once you move from "store" to VAR / partner relationships, you can't lack deal registration or the vendor isn't really treating you as partners. Everyone does deal registration even things like wireless access points. It's the core of how VARs operate and has to be - the VAR business model cannot get involved in "price matching." You pick your VAR based on relationship and quality of service, not price. If the vendors let you pit the VARs against each other they will be force to start bidding, lowering prices and focusing on eroding the value add instead of providing the enterprise services that HPE needs them to provide. It's the only way that HPE or any vendor can protect its value to its customers.
No different than the speak and stereo industry.
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Something that isn't talked about often but is very important in the deal registration system is that it is a way for good vendors and good IT departments to collaborate and protect themselves against management that doesn't see IT value. It is very often that IT attempts to have good vendor and partner relationships but non-IT management sees IT as a commodity and attempts to force the "shop around" drive to the bottom system because they feel that a server is a server, and that support, service, advice and such have no value. IT doesn't want to do this but is often forced. Deal registration allows the IT department to chose what partner to work with while still providing legitimate quotes as non-IT management demands. This way the loyalty of the partnership can be maintained with minimal screwing to the two or three other partners who get asked to waste money providing quotes because they will see instantly that they are not the real vendor so they don't spend time on the quotes and just provide MSRP.
It's a system that helps everyone on both sides of the fence to get better IT value while placating management problems.
MSPs work this way often, as well, but less formally. MSPs often talk and if customers are shopping around their quotes go up, not down, because the value is based on loyalty. Long term partners get better deals, not people seeking the lowest price and ignoring loyalty, reliability, value, etc.
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@scottalanmiller said:
Why? HP and it's partners simply act as a single entity here. You point is that you cannot take the HP ecosystem and try to play them against each other to erode their value.
I'm not trying play anyone against anyone.My point is that if I get three quotes, whoever registers the deal first will get the best price, right? So if I decide I prefer one of the other two resellers, they aren't able to get the same pricing as the first reseller - so I potentially lose out. I may even be forced to buy from a reseller I don't like if the price is significantly different.
In our business, we give the same price to all resellers, which seems fairer. As far as I know that's the industry standard for us. The end customer can then make a fair comparison.
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There is, of course, a caveat. If your first price comes from someone that doesn't treat you well you might end up with a bad price. That sucks. However, there are mitigating factors. If VARs do that, they will never get customers so they don't tend to stick around because they would drive potential customers to Dell, Oracle, etc. HPE won't be happy with VARs doing that as their mutual goal is to make sales. So it is in both of their interests for the price to be a good one.
So while there is some risk, the idea is that you are working with a long term partner with whom you either have a good relationship or with whom you are working towards having one so everyone is on the same page there and that it is in the interest of both HPE and the VAR that the price and value be good enough that you go with HPE and not someone else.
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@Carnival-Boy said:
I'm not trying play anyone against anyone.My point is that if I get three quotes, whoever registers the deal first will get the best price, right? So if I decide I prefer one of the other two resellers, they aren't able to get the same pricing as the first reseller - so I potentially lose out. I may even be forced to buy from a reseller I don't like if the price is significantly different.
Ah, well, sort of. It's possible to work around that... but the original partner will get the profits. Sometimes there are ways to deal with a situation where you want someone else based on something other than price.
However, you can protect against this by not giving them a deal to register. Talk to the partners and pick one before giving them a project to quote. That way you are establishing the partner of choice, then you have the register the deal. Lead with the relationship, not with the sale, and the system should work as designed.
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@Carnival-Boy said:
In our business, we give the same price to all resellers, which seems fairer. As far as I know that's the industry standard for us. The end customer can then make a fair comparison.
But are your resellers VARs or sellers? HPE only has VARs, realistically. At least that is the intent. If we were talking about HPE resellers I would totally agree. But the VAR ecosystem has to be treated differently as there is a lot of cost and expertise involved.
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So IT example....
Netgear Prosafe unmanaged switch that you can buy from Amazon.... no deal registration. Shop around for a good price. As long as you trust the seller with your CC and address, price pretty much rules the roost.
HPE Proliant is VAR only, it's not a commodity item and needs a level of expertise around the sale. This you want a reasonable price on, but the support and soft values are huge factors in where you want to buy it. You'd not want it from Amazon.
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What I'm wondering about in your case.... since you have no deal registration... do your resellers provide a large percentage of your support and consulting? Or do they send customers to you directly for that? Are they experts at your product and normally sell only that and services around that, or do they sell other things too, like your competitors? Do they drive your sales through their expertise and customer relationships or do you drive sales through the quality of the product that you make alone?
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As an example....
HPE Proliants were arguably the best commodity servers on the market until... HPE Integrity kicked their butts all over (see what I did there.) If HPE server quality alone drove sales, everyone would buy HPE. They freaking rock. They really do.
However, lots of companies, including us, rarely buy them. Not that we don't love them, they are really awesome. But we normally buy Dell PowerEdge these days. Why? Not because of Dell (although we love Dell, we love HPE too) but because of the VAR that we work with to get Dell. It is the VAR relationship that not only drove where we bought our servers but also what vendor that server ultimately came from.
So that our vendor gets Dell deal registrations makes a lot of sense. They don't just represent the price of our equipment, they represent the relationship that is so important that it changes what server vendor we work with!
That's why the HPE deal registration process is so important to HPE. It's because HPE can (and probably does) make the best servers on the market. But getting them into the hands of customers requires a VAR so good that the customers are willing to buy HPE. So HPE has to protect those VARs because they are more than a store but they are the local eyes and hands and face of HPE themselves.
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I don't understand how deal registration protects the VAR. It protects the first VAR to register the deal, but screws the other VARs doesn't it?
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Well if you go to a VAR and ask for pricing in order for them to get the most accurate pricing they have the register the deal. Once a deal is registered it is darn near impossible to have another VAR take it over.
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@Minion-Queen said:
Well if you go to a VAR and ask for pricing in order for them to get the most accurate pricing they have the register the deal. Once a deal is registered it is darn near impossible to have another VAR take it over.
Exactly - it's basically price lock-in for that VAR.
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What I don't understand is why the VAR relationship is so important? If you listen to Scott's previous borderline rants about hiring, i.e. paying, the right people to design the right solution for you, assuming you're not doing the research for that design yourself, at that point the person selling you the gear should be offering you very little if any value at all.
What am I missing here?
The first thing of value that comes to mind is things like returns, but short of a failure, assuming you did your research (hired someone else to do it) the rates of returns should be low enough as to not be a real concern.
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@Carnival-Boy said:
I don't understand how deal registration protects the VAR. It protects the first VAR to register the deal, but screws the other VARs doesn't it?
Well no. VARs not getting the deal were always not going to get the deal. If you have three, for example, one will always get the sale and two will always not. So that's even. What it protects is all of them from price shopping. It keeps them from being forced to work for free or to compete by "providing less". They all live on the margins and if the margins go away, they all lose.
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@Minion-Queen said:
Well if you go to a VAR and ask for pricing in order for them to get the most accurate pricing they have the register the deal. Once a deal is registered it is darn near impossible to have another VAR take it over.
That's right, often the registration is part of them getting the price from the vendor (but not always.) This forced the issue. It's also part of the vendor wanting to be in the process. HPE wants to know about and track the deal, do forecasting, etc.
