Hewlett Packard's recent announcements

A lot has happened since Hewlett Packard (HP) made a number of strategic announcements last Thursday, August 18.  Over the weekend and into Monday, we read dozens of news reports regarding what HP said, what it’s doing, what they are planning on doing.  Additionally we spoke with various HP representatives throughout the company regarding the meaning of the announcements and what the future would hold.  Frankly a lot of what was in the news is speculation and some of it is just plain incorrect.   In this article, we are addressing the hardware side of HP’s announcement.  The Autonomy transaction will not affect most of The Computing Center’s client base.

The Computing Center is an HP Elite small and medium business partner and has done business with them since 1982, before the first HP Laserjet.  Our partnership with HP and our goal with all our vendors is to bring the best in products and services to our clients. So, we’ve sifted through what Hewlett Packard has announced, what’s fact, what’s fiction, and what’s just speculation on the part of so called “experts”.  To the best of our knowledge here’s what’s going on and how it may affect some of our clients:

  1. HP has announced that it is making a strategic change with its PSG Division.  The PSG (Personal Systems Group) is the division that makes PCs, Laptops, and tablets.  This is a $42Billion business for HP.  For now, that is it. Exactly what they are going to do is unknown.  HP may sell it - similar to what IBM did several years ago by selling their PC Division to Lenovo.  They may create a wholly owned subsidiary and run it as a separate business.  There are several other options as well. None of this is decided.  These decisions and whatever the process is will be completed sometime in the next 12-18months. What they are NOT going to do is shut down the world’s largest PC and laptop manufacturer.
  2. HP is NOT making any changes in their Server, Printer, and Networking divisions.  No changes in manufacture, service, or support.  These three divisions are some of the most profitable that HP owns.  Anything you may have read regarding these divisions is simply speculation.
  3. Regardless of what HP ultimately decides to do with PCs and laptops, The Computing Center will continue to be able to fully service and support EVERY computer product we are authorized to sell and support till the end of that equipment’s useful life.  Any Hewlett Packard  PC or laptop that has been purchased or you decide to purchase will come with a full warranty that will be completely backed by HP and will be serviced and supported, as always, by our staff or at ANY HP Authorized service center. 
  4. HP has decided to stop making the HP Touchpad and other webOS devices.  Only a very few of our clients had even begun testing these units.  Most are more interested in the Apple iPad and the Android pads such as the Motorola Zoom and Samsung Galaxy.  HP will continue to work on the webOS software platform and make that available to other hardware manufacturers.   The Touchpad can be purchased at extreme discount if there is any interest.

Some additional comments and observations:

  • A lot of us in the sales and services side of the computer business were extremely disappointed with the content of HP’s announcements.  For instance, we understand what PSG means (see above) and what that division manufactures.  Most of our clients don’t (and it’s not your job to understand HP’s divisional breakdowns).  HP’s lack of that basic understanding created a lot of confusion.
  • I received an email from my son who works for a major storage manufacturer.  He and others in his department were concerned that HP was going to stop making servers.  They are not!  Same as above – HP did a very poor job, even on their website FAQs explaining what their various divisions do.
  • As we’ve said, HP could have done a much better job communicating their strategic decisions to their staff, their partners, and their clients of all sizes.  In our opinion, this has led to much of the confusion and speculation over the past several days.
  • HP’s PSG division is a $42Billion business annually.    Even at 5% profitability, that’s $2.1Billion in pretax profits per year.   It’s the world’s largest PC manufacturer with Dell second, Lenovo third, and Apple fourth. That is nothing to be overlooked.  And right now, if HP is indeed going to sell it, they certainly want to grow the business, not let it shrink.  The last thing they will do now is slow down innovation and their wish to retain customers.
  • Indeed, what is going on your desktop is changing.  PCs now represent only about 50% of the devices that go on our client’s desks today.  Laptops, smartphones, tablets, and even terminals make up the rest and are all growing portions of the devices that people do desktop computing with.  And the prices continue to fall. They may be low, but the savvy manufacturers still make a profit on them which is critical to continued innovation and growth. 

The bottom line is that for our clients, HP is not going anywhere.  And more importantly, whatever  comes of this, whatever devices our clients put on their desktops or carry on their laptops or in their smartphones, The Computing Center will be there to provide the guidance of what to buy and the service and support  keep those systems running.  Please contact us at sales@compcenter.com or call anyone at The Computing Center with your questions or concerns.

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