HP UK chief tries to rally troops after PC group U-turn

Analysts say question marks over strategy remain after Personal Systems Group back track

Paul Hunter, head of HP's UK PC arm, has issued a rallying cry to his customers, channel partners and staff in the aftermath of yesterday's decision to cancel plans to sell off the company's personal computer division.

Putting a brave face on the debacle that cost HP its CEO Leo Apotheker, caused customers serious doubt and allowed rivals such as Dell to score points off HP, Hunter said: "We have undergone a robust, and at times very public, audit of the company, which can only make us fitter and stronger.

"After a deep data-driven analysis, we have decided that HP and the Personal Systems Group (PSG) are stronger together."

He insisted that market share had remained "remarkably resilient" and that the company was "striving to increase the gap on our competition".

He promised a renewed drive to engage with HP's channel partners, provide "more consultancy and advice for our enterprise customers and deliver improved customer service and after-sales support for consumers.

Phil Codling of analyst TechMarketView took a jaundiced view of the HP U-turn: "The fact is, very large companies get to do very silly things. Sometimes they even get away with it. HP will probably get away with this - for now. For one thing, the company is number one in shipments and volumes for PCs worldwide. It is not going to fall away in that market overnight."

However, Codling questioned the long-term impact on HP, asking "what impact will the very public goings-on of recent months have on the perception of HP among customers, particularly those enterprise and government customers needing long-term partners?"

Ovum chief analyst Carter Lusher was more encouraging. He dubbed the initial announcement that the PC division was to be sold or spun-off "an unmitigated disaster".

"We applaud HP CEO Meg Whitman for acting swiftly and decisively to eliminate the uncertainty surrounding HP's intentions for the Personal Systems Group (PSG).

"The announcement by now former-CEO Leo Apotheker that PSG was undergoing a strategic review and could be sold or spun off was an unmitigated disaster.

"Everything around the PSG strategic review decision sent shock waves of uncertainty through the enterprise and public sector IT executive circles as it called into doubt HP's ability to execute a clear strategy for any product or solution. IT executives need insights into strategic vendors' intentions in order to make multi-year commitments and HP's actions called into doubt its stability."

Lusher also pointed to longer-term issues for HP though. "It is very clear that the old approach of 'better, faster, cheaper' PCs is not viable for enterprise and public sector organisations. Rather HP will need to make the PC more relevant to IT's need to future-proof its strategy and plans.

"For example, HP needs to embed technology in its PCs that make them better to manage using HP's management software suite. And it is not just in the products that HP has to change to make PSG more relevant."

He urged HP to develop its business models to make it easier for IT departments to support a bring your own device policy by working with retailers and channel partners to create bundles of products and support services that employees can buy and that will fit in with their organisation's IT department's infrastructure and strategy.

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