Zitzner Reaffirms HP 50 Percent Commercial Direct Sales Goal

Speaking at the HP analyst meeting here Wednesday, Zitzner, executive vice president of HP's PSG, and other HP executives said the company remains committed to making the channel an integral part of the growth of not only the PSG division, but of the entire company overall.

In a question-and-answer session, Zitzner said that while that 50 percent of PSG's commercial business will be comprised of all direct sales, about 10 percent of those sales will be fulfilled by solution providers.

Zitzner said that in fiscal 2002, which ended Oct. 31, 17 percent of PSG's worldwide sales were direct. In that same period, 46 percent of North American commercial PSG sales were direct.

When asked how HP came up with the 50 percent sales figure, Zitzner said: "It felt like the right number, If you look at where the market is and what is happening in the marketplace (there is a) predominance of direct in North America. We looked at it and extrapolated."

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Vyomesh Joshi, who heads HP's Imaging and Printing Group, said that the direct numbers for the PSG group are not reflective of the entire HP strategy, which continues to have strong channel ties. More than 90 percent of HP's imaging business goes through the channel.

"Don't just look at the commercial PSG business, you have to look at all of HP," Joshi said. "From the HP point of view, [partners are key drivers for growth. [They will grow with us."

Zitzner said HP will avoid conflict with its solution providers by remaining predictable in its plans. That is, HP will let partners know the regions or markets where it plans to sell direct so they can take advantage of other areas, he said.

"The key on this is predictability. We will be very predictable in what we do," Zitzner said. "When you're not, then partners will lose confidence in you."

During a final question-and-answer session , Fiorina also emphasized HP's strategy to let solution providers know where HP will be selling direct, and where HP would like partners to play. "One of the reasons we can partner effectively is because we give them a plan of where we're going to play and where they will play," Fiorina said. "We go to SIs with solution maps and say, 'Here's where we'll play, here's where we want you to play. So they know precisely [what to expect. That's a clean, crisp message to the marketplace."