HP Launching Partner Relief Measures To Stabilize Cash Flows

The company is targeting the new incentives and other financial initiatives to help solidify partners' businesses amid the uncertain economic environment.

HP Inc. is rolling out an array of relief measures to its channel partners that are meant to help improve their financial stability during a period of economic upheaval.

The initiatives, which cover both personal systems and print, include market incentives and more predictable rebates, as well as deadline extensions for partner reporting.

[Related: HP CEO Lores On Boosting PC Supply And 3-D Printing Medical Parts For The Coronavirus Response]

With HP generating about 88 percent of its revenue indirectly, partners are "an integral part of the family," said Christoph Schell, chief commercial officer at HP, in an interview with CRN. "I think it's important that we look at this crisis in the context of, how can we ensure business continuity for our partners, by making sure that our partners are able to cope? … We feel we are in a position to help our partners."

The measures come as the COVID-19 coronavirus pandemic has led to devastation across many major industries and massive uncertainty around the economic outlook.

HP and many partners have seen a surge in customer demand for work-from-home hardware, such as PCs and monitors. But supply has not been able to match the demand, with production in China still ramping back up.

HP is aiming to help solution providers solidify their business with a series of financial measures, which will vary by partners’ eligibility and geography, the company said. For starters, HP will offer "short-term, market and country-specific incentives for channel partners," the company said in a news release.

"Some of the incentives are programmatic in nature—they are margin-related or they are cash-related. Others are around payment terms [such as] cash discounts," Schell said, speaking of the new initiatives on a global basis. "There could be a margin impact or there could be a cash-flow impact, depending on the program and depending on the market."

Details for the North America region specifically were not disclosed, but will be communicated to partners this week, HP said.

"What we decided to do was not to launch a one-size-fits-all type of program across the globe, but to actually listen to our various market organizations and to get a feeling for what it is that their partner ecosystem requires," Schell said.

HP has also moved to a flat-rate incentive program, eliminating the need for partners to achieve certain criteria so they can earn rebates in a more predictable manner.

"Given the situation that we're managing from a supply chain point of view, some of these targets could not be reached because we couldn't ship the products in a timely manner. So we adjusted for that," Schell said.

Meanwhile, the company has extended the deadlines for partners to submit proof of performance and reporting. The goal is "really to accelerate the payout in order to improve the cash flow of our partners—something that is very important to them right now," Schell said.

The new measures are in addition to financing help that HP’s Integrated Financial Solutions group and finance partner DLL have been offering for partners and customers. The Integrated Financial Solutions group, for instance, is providing deferred and reduced payments until 2021 in some cases as well as short-term rentals and sale leasebacks for HP devices that are owned by customers, HP said.

In an interview with CRN last week, HP CEO Enrique Lores said that HP has also been striving to stay in close contact with partners, and to provide assistance where needed. "We want to support [partners] in any way they need," Lores said.