HP Says PSG Situation Hasn't Hurt Thin Client Business

"We're not seeing any falloff in orders or demand," Jeff Groudan, director of worldwide thin client product marketing at HP, said in a recent interview. "I will say that we are getting lots of questions [about PSG]. But there really has been no noticeable falloff in orders."

Groudan noted that HP had well over 30 percent market share and grew at five times the rate of the rest of the market’s players combined, according to IDC's Q2 worldwide enterprise client market share report, released in August. HP is also shipping more Windows thin clients than the next 10 competitors combined, he said.

Despite HP's rivals' efforts to capitalize on the PSG situation, Groudan said HP is more than holding its own in the thin client space. "We're heading into all this noise in the marketplace with extraordinarily strong results," he said.

HP has been working to overcome misinformation that rivals are spreading in the channel about PSG's future, Groudan said. "We're reaching out partner by partner, customer by customer, and explaining what the real facts are," he said.

Todd Bradley, the executive vice president of HP's Personal Systems Group (PSG), has for the past few weeks been getting out in front of partners and customers and addressing their questions about the future.

"We have got to get this done. We have got to settle the uncertainty in the marketplace broadly for HP. Not just for PSG. The uncertainty is causing ripples across our business," Bradley told CRN earlier this month.

HP by year's end expects to have made a decision on whether to spin off PSG to shareholders, sell PSG outright, or leave it unchanged.

Wyse Technology, which considers HP its biggest rival in thin clients, says it has enjoyed a windfall of new customers as a result the PSG situation. Wyse says it enjoyed the best sales day in its 30-year history the day after HP's blockbuster Aug. 18 PSG announcement.

One West Coast virtualization solution provider and HP partner told CRN he's now recommending Wyse thin clients over HP thin clients due to the unclear situation with PSG. "This is causing confusion with customers," said the source, who requested anonymity. "I tend to favor Wyse over HP for thin clients, but now I'm approaching thin client customers that are currently HP and seeing if they'll explore Wyse as an alternative."

CRN wasn't able to get in touch with other solution providers evangelizing the HP-to-Wyse switch. However, HP is reaching out to channel partners in an effort to counteract the message coming from the Wyse camp. In an e-mail sent to channel partners Monday, which was viewed by CRN, HP outlines several advantages of its thin clients over Wyse's, including more flexible mounting options, cheaper device management costs and dual monitor support

Groudan acknowledged Wyse and Dell as competitors to HP's thin client business but downplayed the threat posed by these and other competitors.

"There's nobody else in market that has substantive experience in selling PCs and selling thin clients," he said of HP. "We're not structurally motivated to move customers to one product or another. We're able to go to customers in a very neutral fashion."