Hewlett-Packard CEO Mark Hurd says he isn’t spending any time worrying about Dell.
After years of taking a pounding from Dell in the PC market segment, HP appears to have turned the tables. HP is now winning share against the Round Rock, Texas, direct vendor by leveraging its channel partner relationships. Yet, even as HP last week posted better-than-expected quarterly results while Dell once again disappointed investors, Hurd said he is simply focused on driving further improvements at HP.
As some Wall Street analysts and the press touted what one scribe called the “dawn of the HP era and the end of the Dell era,” Hurd said HP is focused on the fundamentals of building great technology products, selling them and servicing them.
“I don’t know anything about the dawn of anything,” said Hurd. “We are just trying to run a good company. We are a technology company. We are trying to build great technology and make sure we get it to the marketplace appropriately and properly and that we service it properly. We think if we follow the fundamentals we’ll have a great company. That is what we are trying to do.”
Hurd’s comments come as Palo Alto, Calif.-based HP is gaining share against the direct-focused Dell in the personal systems market segment. By HP’s count, the company gained 2 percentage points of U.S. market share and 1.4 percentage points worldwide in the first calendar quarter against Dell. Hurd, for his part, stressed that only about 30 percent of HP’s business is in the personal systems market segment. “For us it is really important to be strong across the company,” he said.
HP’s Personal Systems Group performance, however, was indeed impressive. PSG reported a 10 percent increase in sales from the year-ago quarter to $7 billion. Operating profit was $248 million, or 3.6 percent of sales, up from a profit of $147 million, or 2.3 percent of sales. Hurd said the PC group had been improving steadily for some time before he joined the company 13 months ago. “It has been a very steady rise,” he said. “To be very blunt with you, I don’t think this has been recognized.”
The PC segment wasn’t the only segment that performed well for HP. In the Imaging and Printing Group (IPG) business, HP posted a 5 percent sales gain to $6.7 billion with supplies revenue up 10 percent in the quarter. Operating profit in IPG was $1.0 billion, or 15.5 percent of sales, up from a profit of $814 million, or 12.7 percent of sales in the year-ago quarter.
Even with those gains, Hurd is beefing up his sales force in the commercial printing and enterprise units as part of a campaign to grow revenue for both HP and its channel partners.
Hurd said HP is set to add hundreds of sales reps in the next two fiscal quarters. “We will hire as quickly as we can,” said Hurd. At the same time, he cautioned that HP is looking to attract the top sales talent in the industry, which could take time. “It’s not as simple as putting a sign up.”
Hurd said he is determined to improve HP’s sales coverage and sales excellence. “Sales as a discipline is not a hallmark of this company,” he said. “We are an engineering-driven company and we are very good at it. We build great technology at Hewlett-Packard. We just have to build the same kind of discipline and capability in our enterprise sales [effort].”