HP Canada targets the inefficient PC market

Las Vegas – The executive vice-president of Hewlett Packard Co.’s (Nasdaq: HPQ) personal systems group told partners the personal computer market is inefficient, and the coming PC refresh cycle is an opportunity for HP and its partners to capture market share by selling complete solutions.

Speaking to HP partners at the vendor’s Americas Partner Conference on Wednesday, Todd Bradley said from 2005 to 2009, HP went from holding 15 per cent to holding 20 per cent of the worldwide PC market. But once tier one competitors such as Dell, Lenovo, Acer and Toshiba are factored out, there’s still 40 per cent of the market held by what Bradley called smaller, less capable players. It’s an opportunity for HP and its partners.

“50 players making up 40 per cent of the market is an inefficient model that we will attack and we will go after, because we see room for phenomenal growth in the next couple years and we see a chance to grow together in this marketplace,” said Bradley. “Clearly our scale drives us and enables is to do many things. And our scale multiplies with our partners.”

The Canadian market has began to move away from tier two and clone PCs over the last 10 years, but there’s still a lot of share to be gained by tier ones such as HP said David Kelly, vice-president and general manager, Central Canada for HP partner Metafore.

“I think there’s still a lot of share to be grown in that market. A lot of customers over the last 10 years have made that move over to tier one, but surprisingly there’s still a big market out there of customers who are still quite happy with the clone,” said Kelly. “For us, it just continues to reinforce a huge opportunity.”

Bradley sees the long-delayed PC refresh cycle beginning in the SMB sector and expanding into the enterprise market in 2010.

Microsoft’s Windows 7 will be one factor, but he added customers won’t just be looking for point-products. The world is now mobile, and HP’s focus is on taking that mobility and turning it into connectivity.

“The entire portfolio is really what matters. A notebook sale is really a full mobility solution. A thin client sale is really a server and storage sale,” said Bradley. “Any product you sell can really pull more for you when you understand the entire portfolio that we’re innovating across.”

A priority for HP in 2010 will be taking its touch technology, pioneered in the consumer space, and bringing it into the enterprise market. Bradley sees a $20 billion global market opportunity in the retail vertical, where touch, an innovative and easy to use technology, has great potential to innovate. The upcoming HP Slate is another product with interesting commercial potential, in verticals such as health care, education and insurance. Bradley also sees a $50 billion global digital signage opportunity.

To succeed, though, he said HP will need the local touch, knowledge and customization of its channel partners. To support then, HP is adding account managers, investing in training, putting more money into fewer programs, and listening to partners on how to do better.

He also wants HP to get more aggressive involving partners in its planning and development cycle, and getting better tuned-in to the feedback partners get from their customers on the ground.

“It’s not just the vision of what we want to do, but the execution around what is expected,” said Bradley.

Bryant Jackson, Metafore’s vice-president and general manager for Western Canada, said Metafore is moving hard into solution selling and the biggest area it’s working on now with its clients and with HP centres around virtual desktops. Metafore sees an opportunity with many corporate PC infrastructures coming of age, and running 10-year-old operating systems.

“The biggest impact we’re having on the solutions side is working with customers to explain the virtual desktop model and how it works, doing proofs of concept, and starting to get some of those opportunities into production and actually rolling them out now,” said Jackson.

He added Metafore is definitely seeing the beginning of the PC refresh cycle, with Windows 7 as probably the major driver. It takes longer for their larger clients to make the move because of the migration planning involved, but Jackson said he expects their larger accounts that don’t refresh in the latter half of this year will definitely make the over next year. For the SMB, it’s easier to do, but the limiting issue will be availability of capital.

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Jim Love, Chief Content Officer, IT World Canada

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Jeff Jedras
Jeff Jedras
A veteran technology and business journalist, Jeff Jedras began his career in technology journalism in the late 1990s, covering the booming (and later busting) Ottawa technology sector for Silicon Valley North and the Ottawa Business Journal, as well as everything from municipal politics to real estate. He later covered the technology scene in Vancouver before joining IT World Canada in Toronto in 2005, covering enterprise IT for ComputerWorld Canada. He would go on to cover the channel as an assistant editor with CDN. His writing has appeared in the Vancouver Sun, the Ottawa Citizen and a wide range of industry trade publications.

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