Tell me about how HP deal registrations work
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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.
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@Dashrender said:
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?
It's a complicated web of partnerships
While yes you are correct, I'm often spitting a little at the degree to which I don't believe that IT should be turning to VARs to get design advice, do IT for them, etc. I do believe that VARs have an incredibly important role to play in the overall process - it's just later in the process than people often engage them.
VARs do the basic sales stuff, of course. They generate quotes, handle returns and such. But all equipment fails, the VAR is going to be a big piece in dealing with that stuff as well. VARs have roadmap info that IT needs and can help with projections about upcoming technologies, products, discontinuations, changes, etc. They have very deep product knowledge that IT can lean on. A VAR would not be installing your server for you, but your VAR will be checking configurations and making recommendations at a micro scale (rather than the macro where people tend to turn to them.)
So, for example, your VAR is the one who needs to check that the RAID card you order will work with the drives you want, both the model and the size and the quantity, they are the ones that make sure that you are getting the drive cage that makes sense for your needs, that you know how to get the SD card readers, that the cache system will have all of the necessary components, that you know about deals on last year's model, that you know the release schedule for next years and things like that.
The VARs provide the consulting "within" the scope of the product that they sell rather than the scope "without" the product that they sell. IT handles the big scope, the "how are we going to use this and why", the VAR makes sure that the product itself works as intended or is delivered as desired.
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As an MSP, something that we do is engage good VARs, they are an important part of our ecosystem. But for our customers, an important aspect of what we do is shielding them from raw interactions with those VARs. As an MSP we have very little "emotions" in the game, it's hard for a VAR to try sales gimmicks on us (especially because they can only do that to one person, not the team, and when the team reviews things that would get caught as a weird decision) in the same way that IT departments can shield management from VARs internally (but VARs work hard to get around logical IT to emotional owners, they know how the game is played.) Having an MSP do it adds an extra mental block, and as an MSP our VAR relationships tend to be bigger and better which means that our VARs have more to lose by not doing a good job with us and we know what VARs to go to for what.
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I hear what you are saying - but this granular level of checking is something I've rarely properly encountered as a small time player in the SMB market.
Great example - I called my VAR (though I don't do enough business with them, perhaps we don't really have that kind of relationship) and asked for a iLo license for my server. I have them the model and serial number. I purchased two of the wrong things before eventually spending over an hour on the phone with HPE discovering the correct part number and that I bought from someone else.
This isn't the first time this has happened to me, though I do usually get the correct part on the second try.
So I can definitely see the value in the VAR relationship at someone like NTG's scale or bigger, but for someone like me who buys one server every 3-5 years, and PC's every hopefully 5+ years, there's not enough meat on our sales bone for the VAR to pay us much mind.
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@Dashrender said:
Great example - I called my VAR (though I don't do enough business with them, perhaps we don't really have that kind of relationship) and asked for a iLo license for my server. I have them the model and serial number. I purchased two of the wrong things before eventually spending over an hour on the phone with HPE discovering the correct part number and that I bought from someone else.
So you see where the VAR is needed, yours just screwed up
Could just be an accident, could be HPE's fault (the split has caused a lot of problems), etc. All HPE VARs are new VARs, as HPE is a new company. So a lot of opportunity for problems. -
@Dashrender said:
So I can definitely see the value in the VAR relationship at someone like NTG's scale or bigger, but for someone like me who buys one server every 3-5 years, and PC's every hopefully 5+ years, there's not enough meat on our sales bone for the VAR to pay us much mind.
That takes my discussion about how big vendors don't see the SMB as valuable to a whole new level of even little VARs don't see it
But this is why you don't work with a VAR as an SMB. I always have said that SMBs should have MSPs as their IT either fully or integrated. It's the MSP's volume that you use, not your own. It's not the reason you use an MSP, but it is a natural benefit to that system. MSPs turn SMBs into big business.
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I understand the MSP push for SMB's, but do they really want to deal with you either, again assuming you're someone like me - doing my on research and I'm only calling the MSP so they can order stuff for me? They are going to have to add onto the price they get from their VAR to cover their costs, and that just adds to the cost for the end customer (me in this case), it doesn't really help me.
