Distribution Execs: HP CEO In Info-Gathering Mode

Ingram Micro President Greg Spierkel, who met with Hurd two weeks ago, said he does not expect any "immediate changes" in HP's strategy since Hurd is in a "full-time listening mode right now."

Spierkel said Hurd has not "signaled" any kind of channel strategy shift. "I think it is premature for anybody to speculate about what kind of changes he may make," he said. "I don't think he is going to do anything rash," Spierkel added, speaking during a CRN executive roundtable in New York last week. "He is asking a lot of the right questions. I think he is supportive of the channel. HP clearly still has over 65 [percent] or 70 percent of their overall business worldwide that is dedicated to the channel. So they are not going to throw the baby out with the bathwater."

Hurd, who took Palo Alto, Calif.-based HP's helm on April 1, will host the conference call May 17 for HP's second fiscal quarter ended April 30. The Wall Street consensus is that HP will report earnings of 36 cents per share on sales of $21.35 billion for the quarter, according to a survey of analysts by Thomson Financial/First Call. For the same quarter last year, HP posted earnings of 29 cents per share on sales of $20.1 billion.

On the heels of its earnings report, HP is set to unveil later this week a new SMB initiative that comes amid continuing complaints by partners frustrated by conflict with HP's telesales reps in Colorado Springs, Colo.

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And HP solution pro-viders and distribution executives say they are waiting anxiously to see whether Hurd will take aggressive steps to improve SMB account engagement through HP partners.

Vyomesh Joshi, HP's executive vice president of the Printing and Imaging and Personal Systems Group, said last week that a broad new sales engagement model designed to help HP reach small and midsize businesses through VARs is still "under construction."

Speaking at the HP 2005 Imaging and Printing Conference held in Half Moon Bay, Calif., Joshi said HP plans to model the new SMB engagement initiative on its enterprise strategy, but the company is still ironing out the details. Indeed, caution will likely be the hallmark of any short-term steps HP takes to address its channel strategy under Hurd.

"From what I can tell, [Hurd] is in listen, learn and study mode at this point," said Tech Data Chairman and CEO Steve Raymund, who has spoken with Hurd. "It's a massive enterprise. There can't be a company that is much more complex in the world than HP. For him to get his arms around it and start making choices is going to take a little time.

"The decisions [Hurd] makes will likely be big ones with far-reaching ramifications, so he needs to be especially careful that when he does declare himself with respect to HP's go-to-market strategies, its use of channels, its internal organizational structure, that he is very resolute about his understanding of the problem, his diagnosis and his prescription for fixing it," Raymund said, speaking at the roundtable. "Because if he is incorrect, it is going to be very painful for a lot of people."

Synnex President and COO John Paget said he is heartened by Hurd's focus on the bottom line. "Anytime you do that, it certainly bodes well for the most efficient way to move your product to the market," he said at the roundtable. "For us, they are the largest vendor we have. They are 28 percent of our total volume. So it is very significant to us."

While he hasn't had any interaction with Hurd, John Marks, president of JDM Infrastructure, a Rosemont, Ill.-based solution provider, said Hurd's reputation precedes him. "His prior business acumen is to learn the company in the best way he can and then cut and rebuild," Marks said. "He is going to break it all down and put it all together again like a puzzle."

SCOTT CAMPBELL contributed to this story.