Fiorina: HP To Continue Streamlining Services And Enterprise Sales Efforts

Hewlett-Packard will continue streamlining the sales efforts of its services and enterprise technology businesses but is stopping short of a corporate reorganization, Chairman and CEO Carly Fiorina said Tuesday.

In a meeting with financial analysts in New York, Fiorina said the streamlining effort began in June and would continue through the second half of HP's 2004 fiscal year.

"We talked [publicly last year] about aligning HP services and our enterprise systems sales teams more effectively together," Fiorina said. "We had multiple selling promotions into our key enterprise customers. We are continuing that evolution, aligning multiple selling motions into a single selling motion."

Fiorina noted a report in Tuesday's The Wall Street Journal, which suggested the executives would announce a reorganization. She quashed that report. "When we're ready to make organizational announcements, we'll make them," Fiorina said.

What the company will also do, she and HP CFO Robert Wayman said, is place the performance of its enterprise hardware, services and software businesses under the umbrella title of Technology Solutions Group in quarterly financial reports.

Among other pronouncements, Fiorina and Wayman said they expect HP to continue to grow its earnings per share by 20 percent in 2004, as restructuring costs from its 2002 acquisition of Compaq wind down.

In addition, Fiorina told analysts the company would continue investing in its software business and focus any acquisitions on smaller, rather than larger, businesses, and that she would continue to eschew larger acquisitions of firms like EDS.

"What you're really going to see us doing is focusing on accelerating growth," Fiorina said, including the continued "alignment" of the services and enterprise sales forces.

"It enables us to sell the Adaptive Enterprise much more successfully," Fiorina said. "We're seeing impressive growth gains in our management software. We'll continue to make that progress in very specific segments where we choose to focus."

Fiorina used the forum, at the Crowne Plaza Hotel in New York, to highlight the company's success in key markets, its $600 million "branding" investment in its 2003 fiscal year, and its differentiation from other vendors.

"I know it is popular these days to describe HP as stuck between IBM and Dell," Fiorina said. "It is particularly popular for our competitors, IBM and Dell, to say we are stuck between the two. The facts don't support the thesis."

Fiorina then rattled off a list of markets and segments where the company is either first or second in market share, including Unix, servers, desktops, printers as well as external and RAID storage. She said HP stood as a contrast to Dell, which she said was a "low-tech, low-cost" provider, and IBM, which she said was a "high-tech, high-cost" provider.

"This is not a company stuck," Fiorina said. "This is a company that leads in virtually every category in which we compete, and a company that is gaining share in the categories in which we are No. 2."

Fiorina also took a shot at the alliance between printer rivals Lexmark International and Dell. "Dell made a lot of noise recently that they shipped a million units in nine months," Fiorina said. "All of that came at Lexmark's expense. All of it."

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