Q&A: HP's Parrattino Talks Hardware Refresh, Pricing Pressure

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Mike Parrottino

Last month at D&H Distributing’s Mid-Atlantic Technology Show, CRN Senior Editor Rob Wright sat down with Mike Parrottino, vice president of HP’s Personal Systems Group, Solutions Partner Organization, to discuss his company’s PC sales for the first half of 2010 as well as HP’s effort to increase channel resources and personnel in the field. The results for the Personal Systems Group have been impressive so far: For HP’s second quarter, ended April 30, unit shipments jumped 20 percent year-over-year while revenue increased 21 percent, led by surprisingly high growth in the desktop category with 25 percent revenue growth.

With third-quarter earnings just around the corner, can HP keep it up? Parrottino outlines why he thinks PSG’s business will continue to grow, despite intense pricing pressure and competition from the likes of Acer. He also discusses tablet PCs, cloud computing and the product category within PSG that’s really turning heads.

There was a lot of talk six months ago about the potential hardware/PC refresh in 2010. How has the Personal Systems Group fared this year so far?

The first and biggest thing is that we are and have been working on growing our product categories, not just within PSG but throughout Hewlett-Packard. We have a great opportunity with our channel partners with workstations, desktops and notebooks, and we’re getting aggressive with our specialty product categories like retail point-of-sale systems and digital signage. It’s really about bringing together the entire technology portfolio for the client solutions set. And I’ll tell you, I think we have the best product lineup we’ve ever had.

So the first part is about growth. The second part is about how you organize and structure yourself to achieve that growth and support the VAR community. And we have realigned a lot of our resources in the field to support the growth and our expectations for that growth. We also know that more headcount resources that are going to be required. So if you look at everything we’ve done from November to this point, we’ve actually increased our co-selling resources -- what I mean by “co-selling” is HP with a partner in front of a customer to sell HP solutions -- by 90 percent. So not only are we talking about how important the health care, education, and SMB markets are, but we’re putting the programs and resources behind that talk. And we’re getting phenomenal feedback from our partner community on that support.

So from your perspective, is the hardware refresh we were expecting the real deal? Do you feel like demand has returned and the economy is improving?

From a macroeconomic perspective, we are seeing improvements in the economy here in the U.S., specifically in areas like banking and financial services. So we’re definitely seeing more demand. I think the Windows 7 launch has generated a lot of interest, and we’ve hosted multiple road shows across the U.S. with Microsoft as well as Intel. So that’s had a significant impact. And we haven’t backed off our investment to our channel partners, and that’s been huge.

When you say a reallocation of resources, can you give a few examples? Are you talking about adding new staff or shifting headcount?

It’s a combination of both. We’ve added additional headcount as part of the growth plan. And we’ve taken some existing headcount and integrated them back into the field organization. So typically, when you think about reorganizations, you think about just moving people around. But that’s not the case here. It’s the opposite; we’ve added people to support those markets in the channel and we’re adding resources and technical competencies to support our reseller organization. And at the end of the day, we want to cover more of the total addressable market and get to more buying points in the market than we have in the past.

Next: Gains for PSG, Cloud Computing and More

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