Resellers are complaining that Hewlett Packard (HP) has denied them the opportunity to make better margins by underpricing its ProCurve switches.
HP has set itself the goal of overtaking 3Com to become the second largest player in the European local area network switch market within 12 months. But some resellers think it is selling the switches too cheaply.
"The 5300 switches are too feature-rich to be so low-priced; they could have got away with another 10 to 15 per cent more [on price]," one UK value-add reseller (VAR) said.
"My biggest problem with HP is that the boxes are too cheap. We could return a hell of a lot of margin if they put the prices up," added another.
But analysts at Meta said resellers were "dreaming" if they thought HP had room to increase the price of the ProCurve range, and said they should concentrate on selling the benefits of the price differential.
HP is also looking to lure larger resellers in the UK away from Cisco to help it sell into the enterprise market.
But resellers claim the price differences between Cisco and HP kit mean they risking losing revenue if they switch to the latter.
"I think the 5300 will be huge for HP and I found the low price to be upsetting, especially when they discounted it after three months," said one.
Jon Wetherall, UK business manager at HP's networking division, told vnunet.com: "We've got the small and medium-sized business market covered, it's the enterprise where we have room to expand."
Wetherall and his team are in negotiations with between 10 and 12 resellers from Compaq's channel who currently sell Cisco and/or 3Com kit, and who had previously enjoyed success selling Proliant servers.
"I want Procurve to be at least 40 to 50 per cent of their networking business," Wetherall said. "This isn't a programme we're rolling out, it's not something we can do by email and phone conversations.
"It's something where we have to sit down with these people and talk to them at length, as we are doing. We offer good margin. We're not over-distributed and our list price is accurate."
The HP strategy may also benefit resellers faced with customers looking to cut costs.
"Sometimes you need to accept that you can get a good enough suit from Marks & Spencer, that you don't have to go to Armani," said a VAR who sells both lines.
"Cisco is a name, a badge. Procurve doesn't have the name but it does have the necessary performance," he added.
"We have customers who work for large companies entrenched with Cisco who are now asking us to put proposals together to allow them to cut costs," claimed another.
"The problem is, a lot of companies have a policy that the people we talk to say means they have to buy Cisco kit."
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