HP Confronts Slump, Tweaks Sales Strategy
Hewlett-Packard Co. is tweaking its direct sales strategy and is readying a new line of midrange Unix servers in a bid to reinvigorate sales that have been slowed by the shrinking economy, channel turmoil and the dot-com collapse.
The company recently instituted its so-called Hard Deck program, under which it has identified and listed about 500 of its largest customers to whom it will sell products and services directly.
The goal of the program is to address growing channel concerns regarding which companies HP will sell to directly and which customers it will let resellers approach, said Mark Hudson, a global marketing manager at HP.
The company has said that problems arising from this conflict at least partially contributed to HP's sales slowdown in the fourth quarter.
HP plans to be more active in generating leads for resellers via advertising, direct mail campaigns and joint sales efforts that will be managed by new field alliance managers, Hudson said.
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Sorting through these channel issues should benefit HP and its customers, according to David Krauthamer, manager of information systems at Advanced Fibre Communications Inc., a Petaluma, Calif.-based manufacturer of telecommunications equipment and an HP user.
"There always seems to be a lot of overlapping going among HP's channel partners. . . . There always seems to be a lot of people looking to sell you HP [technology]," Krauthamer noted.
HP is also readying new midrange servers and workstations based on its next-generation PA-8700 chip, which will debut at speeds ranging from 600 to 800 MHz. The first systems based on the new chip should begin shipping sometime in the second half of this year, Hudson said.
HP's moves come at a crucial time. The company has recently lost market share in the highly competitive server arena to both IBM and Sun Microsystems Inc. HP's high-end Unix revenue declined 54% in the last quarter, compared with the same quarter last year.
Meanwhile, HP said that sales of its long-awaited Superdome enterprise Unix servers - the company's answer to Sun's popular Ultra Enterprise 10000 server - have been slow to take off. Although figures aren't available, even HP officials acknowledged that Superdome sales have been slow.
"The major issue they are facing is that Superdome is not delivering the performance that a lot of people were expecting," said Humberto Andrade, an analyst at Technology Business Research Inc. in Hampton, N.H. "It has not been the big breakthrough that was promised."
Acccording to Hudson, however, the slow sales have more to do with the longer sales cycles than with any inherent performance issues.
Prices range from $400,000 for a 16-way server to more than $1 million for a 64-way box, so it's taking HP much longer to close those deals, Hudson said.
» posted by ITworld staff
Computerworld
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