HP Getting More Price Aggressive, Moving Fast For DRAM Supply4:49 PM EST Wed. Sep. 11, 2013
Hewlett-Packard Senior Vice President of Personal Systems and Printing John Solomon Wednesday told CRN that the computer giant is getting more price aggressive and leveraging supply chain relationships to assure DRAM supply in the wake of a fire in a DRAM production facility last week in Wuxi, China.
The $120 billion computer giant last week held a two-day, all-hands-on meeting with top executives from its printer and personal systems group and HP supply chain executives to make sure it gets more than its fair share of DRAMs for its PC, printing and server portfolio.
"We cleared all our calendars for two days, and all we did was make sure that we have an unfair share of the available [DRAM] commodity and that we are working with alternative suppliers as well as the supplier [impacted by the fire] to make sure we are well situated with a common theme to grow faster than the market," said Solomon.
The supply chain push comes with HP stepping up its bid to drive market share gains in its PC and printer product portfolio, said Solomon. "We are getting more price aggressive in terms of the price points we are playing at across the [PC and printer] portfolio," he said.
The interview with Solomon came in the midst of HP's Partner/Customer Solutions Showcase in Atlanta featuring 20,000 square feet of existing and soon-to-be-released new printer and PC products. The HP event, the first in a series of customer and partner gatherings, drew 150 partners and 100 end users.
The HP supply chain offensive came after a fire at South Korea-based SK Hynix's main DRAM production facility in Wuxi, China, last week that pushed spot market prices up 20 percent for the chips, according to market analysts at TrendForce. As a result of the fire, several memory suppliers put shipments on hold until the extent of the fire is better known, according to published reports.
SK Hynix, for its part, said it resumed operations at the fab in Wuxi, China, on Saturday, Sept. 7, after completing safety inspections. "We are continuing our inspection of utilities and equipment to restore the line that was partly damaged by the fire under the cooperation of the Chinese government," SK Hynix said in a statement supplied to CRN. "Further, we have dispatched many experts from our headquarters and established a 24 hour restoration system with partner companies."
The DRAM crisis is a great example of HP jumping on an "opportunity" to leverage its "scale, our relationships and our sense of urgency" to gain market advantage, said Solomon.
NEXT: More Operational Rigor As HP Steps Up PC, Printing Attack
HP's Solomon said new HP Executive Vice President of Printing and Personal Systems Dion Weisler, who took the top PC and printing job nearly three months ago, has put in place more "operational rigor" as HP steps up its PC and printing new product attack.
"In the past we have had to limit the number of deals or the amount of volume we do through the channel at the lower price points because frankly we couldn't afford it," said Solomon. Weisler, he said, has made HP's PC and Printing group more customer focused. "If there is a large market, for example, in the under $500 commercial PC space, if we don't have the right product, we can't just walk away from that. We have got to develop the right product, have the right cost structure and win. We are going to win in all the relevant price points."
HP is sharply focused on determining the biggest market opportunities by price point for all the major PC and printer category segments. "We have literally [a spreadsheet with] page after page by price points, the size of the market, the opportunity and the HP share," he said. "Our strategy is, for each of those segments that are relevant, HP is going to grow faster than market. Then we make sure we have a product set that can support that."
U.S. Channel Chief and HP Vice President and General Manager PPS Scott Dunsire said partners are excited by the more aggressive HP product offerings. "There is a lot of excitement and enthusiasm around aggressiveness in price bands where there are [new] opportunities for our partners," he said.
Ted Glahn, CEO of ProSys, a $600-million solution provider and HP partner headquartered in Norcross, Ga., who attended the one-day HP event, said he sees HP as a much more aggressive, sales-focused organization under HP CEO Meg Whitman.
"This place is packed," said Glahn of the HP PPS event. "They are really getting the crowd going with new product introductions. Meg has really brought a different attitude to HP. HP has always been an innovator, but under Meg they have become a sales-focused company. Their people in the channel are much more involved in the sales process and sales opportunities. We see a lot of improvement from HP in terms of supporting the channel."
That sales focus has resulted in more joint selling between ProSys and HP, said Glahn. "We are starting to see HP sales people coming into our office building relationships with our people," he said. "Sales are made based on relationships. Getting their salespeople and our salespeople working together creates an environment where you are going to win most of the time."
Glahn said he expects his HP business to be up about 20 percent this year and another 20 percent in 2014. "Meg has really started to turn it around," he said. "We are seeing much more competitive programs and incentives from HP."
PUBLISHED SEPT. 11, 2013