Driven by the success of its low-cost - rapid delivery TopValue PC programme among small businesses and corporate South Africa over the past year, Hewlett-Packard has extended the programme to include entry-level servers. HP TopValue is said to be behind HP SA`s massive market growth in the last quarter of 1999 and its vastly improved market share at a time when many the top 10 PC vendors, especially the branded vendors, experienced negative growth. The company now occupies seventh spot in the SA Top Ten PC vendors "At a time when everyone else was struggling with pricing, distribution models and delivery, we were able to come to market with lower prices and faster delivery without compromising quality or upsetting our traditional distribution channels - and it was all due to Top Value," says Thierry Boulanger, HP SA`s PC manager.
"Now we`re planning to do the same with entry level HP servers in both the small business (SMB) and Enterprise markets."
Central to Top Value`s success to date is its auto replenishment of core products at distributors Siltek Distribution Dynamics (SDD) and Tarsus Technologies. Warehouses are linked electronically to HP factories so that when stocking levels reach pre-determined levels, models are automatically replenished, with delivery within 48 hours.
"The end user quickly realised the new value levels we bring to the PC market and I`m confident these will be repeated in the entry level server market. By taking away the stocking headache at our distributors, we`re ensuring they don`t end up with obsolete stock, carry too much stock or not be able to meet demand timeously. That all adds up to lower pricing and faster delivery.
"The dealer can now go out and quote on an order confident that it will be delivered at the quoted price and quickly. It`s a win win for the end user - they get high quality, branded PCs at near clone prices," he says. End users have reacted positively to the news that Top Value has been extended to include the E-Series HP NetServers in the SMB sector and the LC 2000s entry-level enterprise servers. These will be shipped ex-factory fully configured to the most popular basic customer requirements such as memory, storage, RAID, LAN card and back-up systems.
"This is great news," says Tommy Kroukamp, Manager, Micro Technologies at Boland PKS. "The PC programme made the HP PC much more affordable and enabled us to plan a couple of months in advance and standardise on one vendor with all that entails as far as support and cost of ownership are concerned.
"Lead times are shorter, which means, unlike in the past, we don`t have order too far in advance and keep them in stock. Before, to make sure we had machines available when we needed to install them, we would have to buy them four to five weeks in advance," he says.
Another user who is looking forward to the extended TopValue programme is Alan Webb of Senwes. "The PC programme made the HP PC very affordable. I hope to see the same results coming out of the server programme as I`ve got 70 servers running nationwide," he says.
Jenny Borrie, managing director, customer sales, Bateleur, an HP Value Added Reseller, adds, "I can`t wait for the server side to take off, especially with the new products that HP has in the pipeline.
"Top Value has got three things going for it. The first is that we don`t have to wait weeks for delivery. The quality is the same and the bonuses is that we are able to drop prices."
In selecting the range of PC and server configurations to stock, HP has carried out extensive research of sales trends, choosing the most popular and focusing on those rather than trying to market an infinite range of configurations.
"It makes a change," says Kevin Greg, sales and marketing director of Ethniks Systems, an HP authorised dealer. "Usually vendors try to push their slow moving lines through schemes like this. HP is focused on its fast-selling lines."
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