Dell Smell Blood In the Water With Hp Split-Off

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Dell Smell Blood In the Water With Hp Split-Off

 user admin 2014-10-09 at 11:17:01 am Views: 170
  • #41230

    Dell Smell Blood In the Water With Hp Split-Off
    by Tom Spring

    Dell partners smell blood in the IT waters as Hewlett-Packard readies for a historic restructuring those partners said will trigger years of transition for HP from a global powerhouse into two smaller companies.

    "2015 is the year of winning back market share and taking the fight to HP's front door," said Bob Hazlett, vice president of business development at Glendale, Calif.-based Dell partner Lanair Group.  

    "HP is still trying to figure out who it wants to be and they are going to drag partners through the mud trying to figure it out," Hazlett said. "With Dell you have one throat to choke, one partner program and one stack from the client PC all the way up through the datacenter."

    "We are up against HP every day. Next year, it's going to be an HP land grab with our Dell business. It's going to be huge for us," Hazlett said.

    “The only thing resonating with Dell’s strategy is a lack of enthusiasm," said HP in response.  "Based on the conversations we’ve had, our customers and partners understand our strategy and they are as excited as we are for how two laser focused Fortune 50 companies can help drive their businesses.”

    On Monday, 75-year-old HP announced a massive restructuring that will cut the $112 billion company into two, spinning its computer and printer operations off from its enterprise hardware and services business.

    The move, which includes laying off 5,000 employees, was applauded by Wall Street investors who sent the company's shares up 4.7 percent. But analysts warn HP partners face struggles alongside jubilant investors.

    "Wall Street may love twin HPs, but partners or customers are going to be singing a different tune," said Laurie McCabe, co-founder and partner at research firm SMB Group.

    McCabe said HP will struggle to service the SMB and mid-market as it tries to unify a single HP offering across multiple versions of itself.

    "How does a partner sell from the bottom to the top of the IT stack with HP? How will that work? Do they have a secret that will make it less complex?" McCabe said.

    "The HP split benefits Dell giving it a very clear story and allows partners to draw a stark contrast between the two," McCabe said.  

    "Dell has a strategic advantage over HP now. Dell is integrated from top to bottom, just as HP is getting ready to split," said Michell Stockmann, president and CEO of TechKnow Solutions in Breese, IL.

    HP blinking even for a moment gives TechKnow's Dell business a competitive advantage as customers question HP's ability to deliver client PCs, server, software and services from the bottom of the stack to the top, Stockmann said. She added if HP can elevate its PC business to the same level as its world-class printer business she would give HP a second thought.

    "HP has its printer business nailed," Stockmann said. "But if I have to look to turn to more than one company for my servers and workstation, I'm sticking with Dell."

    That's exactly what Dell is hoping for as the Austin-Texas based company released a memo taking a pot-shot at Whitman's bombshell breakup news.

    "HP’s decision to break apart its business is complex, distracting and appears to benefit HP and its shareholders more than its customers, which is ultimately the wrong priority," wrote Cheryl Cook, VP Global Channels and Alliances at Dell, in a prepared statement.

    Cook reminded partners in her statement that Dell provided solutions from the "endpoint to the data center and cloud, customers value the certainty and predictability of working with Dell."

    The Dell digs come on the heels of months of badgering by HP where it blasted that Dell's privatization would create weakness within Dell's channel as it grappled with its $24.9 billion leveraged buyout.  

    Dell partners are now the ones that see opportunity at the expense of Dell's archrival HP.

    "It's going to be extremely hard for HP not to lose market share, customers and focus as it reinvents itself as two mini HPs," said Robert Brindell, managing director of Dell partner and Kraft Kennedy of New York City.

    "When we talk to our customers they want PCs, servers, storage [and] laptops from one vendor," Brindell said. "Starting today, Dell has a better story. HP has good products, but it's also got a lot of ambiguity now."