HP CUSTOMERS DESERT …….

[Anonymous]

HP customers desert

The ongoing confusion over HP’s future plans is causing customers to abandon ship, according to reports.The company has been sending out mixed messages since its shock announcement to quit the PC business, as well as stop production of its webOS TouchPad tablet.HP’s dithering is already causing customers to look elsewhere, according to the Wall Street Journal. The paper cited engineering company Fluor, which generally spends $25 million a year on new hardware and software, and was planning to buy high-end design computers and a fleet of tablets from HP. "I’ve put that all on hold and won’t buy from HP,” said Fluor chief information officer Ray Barnard in the report. "It appears that they’re lost right now."

And Fluor was not alone, with the WSJ also citing education customers with doubts over spending money with the world’s largest PC manufacturer, amid confusion over its plans and abrupt announcements."This appears to just come out of the blue without a really good explanation," Frank Cervone, a vice chancellor for information services at Purdue University, told the paper. "It makes you wonder what the strategy really is and where it is going."

Meanwhile, Greg Davis, Dell’s channel chief, on Thursday e-mailed a letter to Dell’s solution providers emphasising the company’s commitment to being a stable partner.The letter, which does not mention Hewlett Packrd by name, comes amid ongoing speculation and confusion regarding the world’s biggest PC business., Davis, who is vice president and general manager of Dell’s global commercial channels, told partners that they play, "the critical role of delivering valuable solutions" to customers, and that Dell is "now more than ever" committed to its partners and the PartnerDirect program."The changing landscape in the PC market may have you asking yourself a number of questions. Dell remains a stable partner committed to the PC business. We are here to help," Davis wrote.

HP partners and customers were left in a state of shock last month when the copany announced it was exploring "strategic alternatives" for its Personal Systems Group (PSG), including separating it into a separate company through a spin-off or other transaction.

In response to Davis’ letter, an HP spokesperson said in a statement, "While the competition is focused on HP, we’re focused on our partners. We have spent the past 25+ years delivering the right products and solutions for our mutual customers, the right programs and support for partners, and the right strategy that has helped place our partners among the most successful and profitable in the industry. We have never wavered in this commitment and that has not and will not change."

HP’s PC division, with its yearly revenue of $42 billion, is currently the world’s largest PC manufacturer, with a 17.5-percent share of the worldwide market and a 26.9-percent of the U.S. market for PCs in terms of numbers shipped, according to analyst firm Gartner. However, for HP, PSG is one of the lowest-profit parts of its business, earning the company a mere 5.7-percent margin.

HP was followed by Dell at No. 2 worldwide and in the U.S. in terms of units shipped. However, Dell’s worldwide PC sales during the second quarter grew 3.3 percent over the second quarter of 2011, compared to HP’s growth rate of 3.0 percent. But for the U.S. market, both companies saw shipments fall, with Dell’s shipments in the U.S. dropping 9.8 percent compared to only a 1.2 percent drop for HP.

Dell has taken the offensive since HP’s said it was considering alternatives for its PC Division, with Davis moving to aggressively recruit HP PC solution providers into the Dell fold.The offensive even includes Dell Chairman and CEO Michael Dell, who has taken to social media to chide HP for its latest position regarding the PC market, and who told CRN in an exclusive interview that HP’s decision is a great opportunity for the channel and for Dell"Others in the industry will do whatever they are going to do, which I guess nobody really knows yet. You can ask them about it," Dell said. "The summary is that Dell is now the x86 enterprise partner of choice. If I am in the channel I want to be working with the enterprise x86 partner of choice."HP, however, has been on a push to end some of the uncertainty over its PC business and stem potential concerns among solution providers and customers wondering about the future of that business.

A week or so after unveiling plans to get out of the PC business, HP tried to clear up the confusion by saying it is more likely to spin the PC division off into a separate company instead of sell it to another PC maker. However, HP is also still considering selling it or even keeping it as part of HP.The company has launched a campaign to present the change in its PC business as a chance to work with a new PC company that will operate like a startup.

Next: HP’s Positive Spin, Dell’s Response
"Our preferred course to harness our vision of the future is to build a separate, more agile company. It’s time to think like a startup again. It’s time to be nimble and revolutionary. It’s time again for world-changing innovation. And so, it’s time we realized we’re at a crossroads in an evolving HP," HP said as part of that campaign.

Davis told CRN after the letter was sent to solution providers that his company remains committed to the PC business and to partners in the wake of HP’s decision to consider alternatives for its PC business."Clearly (HP is) the strongest competitor we have," Davis said. "My phone has been busy the last seven to ten days with partners asking about it. There’s no speculation at Dell. We are committed to PCs and being an end-to-end provider. And we are committed to the channel."

Davis said Dell’s indirect channel business continues to grow. For the second quarter of 2011, enterprise commercial sales through indirect channel partners grew 24 percent year-over-year," he said.

Dell wants to make clear to partners that it is a stable and reliable partner, "in light of our rival who is sending a message to partners questioning the stability of the business," Davis said. "Partners’ confusion is an opportunity for Dell. We want them to know there’s no uncertainty in our business."

Dell has been pushing partners hard on the PC business even before HP said it was looking at alternatives, said Dave Hiechel, president and CEO of Eagle Software, a Salina, Kansas-based solution provider and Dell partner.The message from Davis’ letter to partners is clear, Hiechel said. "It’s a good way of saying, ‘HP’s bailing on you, come over to Dell,’" he said.

However, getting customers to move from HP to Dell is not as easy as Dell would have it, Hiechel said."I had a conversation with a good education customer who is an HP [customer]," he said. "He said he can get a quote from HP and know that the configuration will not change in two or three years. His big knock on Dell was, you get a sweetheart deal now, but you’re not sure what you get in the future."Davis responded that Dell does make it possible to get stable configurations when needed.

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September 6, 2011 at 8:25 AM