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HP's Fiorina Sees Big Opportunity In Potential Sale Of IBM PC Business

Hewlett-Packard Chairman and CEO Carly Fiorina on Tuesday said IBM's expected sale of its PC business to China-based computer vendor Lenovo presents a "big opportunity" for HP and its channel partners.

Cautioning that HP must wait to see what IBM and Lenovo formally announce, Fiorina said HP plans to go after IBM channel partners and accounts. Fiorina made the statements in a brief interview with CRN after the HP Security Analyst Meeting in Boston.

"Of course, we'll wait to see what they're really doing," Fiorina said, adding that Lenovo mainly plays in the Chinese market. "For a company that has been totally focused on China -- and frankly, over the last year, has had a little bit of trouble competing as others have entered [that market] -- it is going to be a complex process to put the two together," she said.

Fiorina said one customer told her yesterday that they were really upset about news of IBM's plans to sell its PC business. "HP always has been and always will be a partner by strategy, by personality, by choice," she said. "We have invested in strengthening our relationships with the channel, and that investment pays off when we can go together after big opportunities." Fiorina pointed to HP's new enterprise engagement model as evidence of the company's channel commitment.

The potential sale of IBM's $11.5 billion PC business would "cause a lot of turmoil with the IBM accounts out there," said Duane Zitzner, executive vice president of HP's Personal Systems Group. "It does give us and our channel partners a great opportunity to go in and offer more stability," he said. He pointed out that IBM's PC channel would be in "disarray" as a result of such a deal.

HP has begun to look at how to capitalize on the IBM sale, but it doesn't yet have a detailed field plan to win over those channel partners and IBM accounts, Zitzner said, adding that IBM has only single-digit PC commercial market share. "This would give us an opportunity to go after that," he said. As far as incremental resources, "this is a case where the channel can play a key role."

Mike Winkler, executive vice president of HP's Customer Solutions Group, reaffirmed HP's commitment to better leverage the channel with a new enterprise engagement model. But he noted that HP hasn't yet finalized how many accounts will be handed over to the channel, despite earlier reports.

"Those numbers have yet to be refined because we are just finishing that mapping in North America and in the other countries," Winkler said.

HP didn't have enough sales coverage to effectively cover a number of the top accounts, Winkler added. "What we are saying is, it's even more cost-effective to cover that through the channel," he said. "We will make more profitability out of that area and arena that we under-covered before. Effectively, it was a market gap that we had."

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