HP Has Magic Touch; Vendors Get Creative12:00 AM EST Fri. Nov. 28, 2008
HP's performance is utterly remarkable when you consider just how harsh things are in the IT market. A few weeks ago, HP buoyed stocks and the overall channel with the news that its financials and growth were not being negatively impacted by the deteriorating economy. It is worth spending time reviewing what HP Chairman and CEO Mark Hurd is doing to see if you should be emulating his moves.
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Hurd is also managing a highly diversified business model. While IBM walked away from the PC business, HP stuck it out with earnings rising just shy of 5 percent and shipments soaring 19 percent. Earnings from its printer unit jumped 11 percent; contributions from software jumped 34 percent to $195 million. Hurd is certainly trying to squeeze more out of his operation but is also priming the pump as he spent $360 million to purchase iSCSI SAN vendor LeftHand Networks. In addition, it cut a deal with CDW to fund more than 100 dedicated salespeople to drive HP-exclusive sales. HP's diversity can turn out to be its strongest asset or its weakest link depending on how aggressive its rivals become or if the downturn significantly worsens. Either way, Hurd is intent on gaining market share in the channel against its competitive set.
How aggressive will vendors get in the coming months? We are already seeing signs vendors are getting creative in efforts to stimulate year-end sales and build momentum. You can expect to hear more about this as vendors attempt to deliver their revised numbers for 2008 while laying the groundwork for next year. SAP launched a zero percent financing program in an effort to close sales and, at the same time, offered 100 percent reimbursement on MDFs. SAP is also asking partners to send it the names of accounts on the fence and said it will rally its sales team to help move deals forward. Meanwhile, Samsung is circulating a promotion on its LCDs and plasmas with aggressive pricing such as $499 for a 32-inch LCD and $699 for a 42-inch plasma.
Who's being aggressive with you?
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