The brilliant idea was started as a way to beat Dell on pricing by removing distributors from the supply chain and using that margin to give customers discounts.
It did not work very well and miffed the hell out of the channel. The cunning plan was that HP would not pay resellers any soft margin or marketing funds, just a one per cent rebate, and allow them to boost their coffers by wrapping products in their own tech services.
The model expanded to the private sector, and saw HP competing against its trusted channel allies.
VSI was one of two decisions which killed off HP’s business. The other one was to ask account managers in the Enterprise Group to manage PC resellers to build direct sales.
The move was great for Lenovo who suddenly had SCC, Softcat, Kelway and other big resellers wanting to work with them.
Apparently though HP has now re-purposed so that it is only used in the public sector again. Even that is less of a focus.
HP CEO Meg Whitman promised to remove channel conflict when she started, setting out rules to govern the behaviour of internal sales reps; and passed some enterprise accounts that were directly managed to channel types.