HP Partners: PSG-IPG Wedding Could Work This Time Around


Hewlett Packard's reported plan to combine its Imaging and Printing Group (IPG) and Personal Systems Group (PSG) is music to the ears of partners who have been craving a simpler relationship with the company.

"The merging of the two business units would represent easier access to the decision process for partners, and offers customers a faster time to market," said John Convery, executive vice president of vendor relations and marketing for Denali Advanced Integration, Redmond, Wash.

Such a merger has recent historical precedent: HP united PSG and IPG in 2005 under then-CEO Carly Fiorina, only to have Mark Hurd reverse the decision six months later after taking over as HP CEO.

This time around, the PSG and IPG combination would seem to fit with HP CEO Meg Whitman's mission to make it easier for partners to do business with the company. Arlin Sorensen, CEO of Heartland Technology Solutions, an HP partner in the Midwest, is in favor of breaking down the organizational siloes that exist between the business units.

[Related: Report: HP To Combine PC, Printer Business Units]

"Selling printers and client machines are not the same thing -- each has its own unique requirements -- but directionally and programmatically, it can be two lanes of the same highway following one strategy," Sorensen told CRN.

Putting together deals involving products from PSG and IPG has been difficult for partners because the groups have separate Profit and Loss statements (P&L). Bob Venero, CEO of Future Tech, a Holbrook, N.Y.-based solution provider, believes a blended P&L for the merged groups would remove the barriers.

"You were never able to get aggressive and creative because the groups were siloed," Venero said. "This could be a big advantage for partners because we'll have a larger bucket of money to hit."

However, HP isn't merging PSG and IPG out of an altruistic desire to make life easier for the channel. HP needs to cut costs, and combining the business units is seen internally as a way to achieve this goal, The Wall Street Journal reported Tuesday.

HP may also be combining PSG and IPG in preparation for an attempt to spin off the combined business unit, according to Venero. "There is no doubt that the combination is a much stronger potential for a stand-alone or spinoff business," he said.

Such a move would likely bring channel consolidation at HP, and possibly layoffs, Venero added. "I believe this is inevitable," he said. "It makes good business sense to combine roles and shed excess."

HP currently does not have a corporate channel chief, and instead has assigned channel executives to perform the various functions of this role. Mike Parrottino leads U.S. channel sales for PSG, while Scott Dunsire handles this role for IPG. Others include Frank Rauch (Enterprise Storage, Servers and Networking), Steve Erdman (Americas Software); Ken Archer (Technology Services);Tracy Galloway (Attach and Services); and Matt Smith (Americas Channel Marketing).

The PSG-IPG tie-up would make sense because PCs and printers are both end-user facing hardware, said Travis Fisher, executive vice president at Inacom Information Systems, a Salisbury, Md.-based solution provider.

"I imagine there is a lot of overlap in marketing and relationships that doesn’t have to be there. Eliminating a silo and simplifying partner contacts seems like a great idea," Fisher said.

Mont Phelps, CEO of NWN, an HP partner headquartered in Waltham, Mass., has a more poetic take. "To quote Forrest Gump, PCs and printers go together like 'peas and carrots'. They should be sold to the same customer, by the same HP organization, via the same channel," he said.