The hardware vendor is cutting prices more than 5% on ship-ready ProLiant servers and storage products to stimulate sales, competition
HPE server sales grew more than 10% in the last quarter of 2018, but the vendor still fell behind Dell in overall market share. According to CRN, HPE is responding with aggressive server and storage price cuts to stimulate partner sales, capture SMB market share, and increase competitive pressure on rivals.
The Lowdown: The quietly announced price cuts, according to CRN, are the most aggressive HPE has initiated in years. While HPE server sales are healthy and growing at double-digit rates, the company wants more share in the SMB segment. With the price cuts in server and storage products, HPE hopes, sales will
The Details: The price cuts are mostly for the transactional, ship-ready Smart Buy Express ProLiant servers, which come in preconfigured packages suitable for SMB customers. The ProLiant price cuts are around 5% through distribution.
HPE is also cutting prices of storage products — including 3Par, Nimble, SimpliVity, and Synergy — by 3% to 8% for partners with status in the Partner First program.
The Impact: HPE believes the price cuts will help stimulate transactional SMB sales, particularly of its Gen10 line. And the price cuts in servers and storage could put pressure on competitors — most notably, Dell EMC, which overtook HPE in server market share in the last quarter of 2018. Partners tell CRN that the price cut is enough to stimulate more activity and provide them with a competitive weapon in the open market.
Background: According to IDC, overall server sales increased 12.6% in the fourth quarter of 2018, generating nearly $21 billion in sales. Dell edged out HPE in revenue and market share — $4.4 billion and 18.7% market share to $4.2 billion and 17.8% market share, respectively. What’s worrisome for HPE and its partners is the growth rate, as Dell increased server sales 20.4% to HPE’s 10.5%.