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October
2003
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Outlets for the 3000 are trying
to deal in October, but discounts were scarce Customers might have been careful about buying HP 3000s during the last month of HPs sales effort, but some of the official channels were trying to create deals on the system. Cerius, a North American reseller, reports that it is attempting to find extra discounts on the system on a deal-by-deal basis, but it needs to present justification to HP for lowering the price on HP 3000s. The transaction between HP and the reseller involves increasing the resellers discount points, something that many of the regular HP 3000 outlets dont have much room to negotiate with. Its hard to believe that HP would be cautious about any business transaction that could help the company show revenue growth, one of HPs most closely-watched signs in the stock analyst community. But apparently the 3000s ability to help HPs sales totals doesnt impact discounts for the system very much. Discounting to the 3000 resellers looked like an option that might be more easily extended to larger resellers, according to Pivitals Steve Suraci. There are no incentives that we have seen other than what was previously in place, Suraci said. Weve got a standard discount from HP, and we discount that further on our end. Weve always been somewhat aggressive when competing with folks like Logical, who have a bigger discount than we do. Id dont think weve any more aggressive in the last month here. Since HPs not giving us any more, we cant give very much within our business model than we already are. For customers who havent bought an HP 3000 in awhile, the normal discount off HPs list prices for systems is about 20 percent, according to Suraci, unless its HP selling it. HP can get aggressive on selling 3000s if they trip over a deal, said Pivitals sales manager Jack Harbaugh. But the HP direct sales force for the 3000 has largely been dismantled by now, leaving customers to seek out resellers to help with purchases during the last month. Cerius noted that HP might be open to a bigger discount, to be passed along to the customer, in special circumstances. We have been putting together one-off discounts for our customers, with special pricing from HP, said sales manager Kirk Olson. They are being very selective in offering these prices, and we have to go through a justification. It isnt public knowledge so I cant give specifics. It really depends on the particular customer. The price
reduction will always include the standard HP Trade-Up credits, which
can run as high as 15 percent for a recent server being traded in, as
well as HP Investment Protection credits which customers can apply to
future purchases of HP-UX systems either PA-RISC-based, or
Itanium 2 systems during the next three years. HP reported
that these credits are 50 percent of the 3000s purchase price
for HP-UX systems purchased during 2004, 45 percent for systems
bought in 2005, and 40 percent for HP-UX systems in 2006. At no time
can these credits make up more than 50 percent of the target
systems price, though. Customers have until January to register
their N-Class purchases for these investment credits, by visiting the
HP Web site at (h20024.www2.hp.com/csy/2698/investmentprotection) and
then faxing a copy of their sales invoice to HP at 408.447.4848. Nishimoto also
said that customers who are using the companys loaner program
where an HP 9000 sits alongside HP 3000s that are being
migrated will do best just to keep the HP 9000, rather than
convert their HP 3000s to 9000s. HP offers a buy-out option for this
migration loaner, which Nishimoto said is a better deal than
converting an N-Class server to an HP 9000. The remarketed
N-Class is pretty much totally non-existent, Nishimoto said at
HP World. Its just too much of a value to turn it into an
HP 9000. While this message had an obvious punchline
buying a new N-Class was a good investment it also spoke to
the value of acquiring an HP 9000 in the current marketplace compared
to the value of an HP 3000. Only one of those two systems is in
limited supply as a new item, according to HP and its resellers.
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