What does HP's shake-up mean to you?

News Analysis

What does HP's shake-up mean to you?

Charlie Russo, News Writer

Hewlett-Packard Co.'s organizational shakeup this week could benefit its customers in the long run. For now, though, small and midsized businesses need to pay extra close attention to the way their HP accounts are managed, according to several SMB analysts.

Yesterday HP CEO Mark Hurd announced that the printer and computer maker will cut 14,500 jobs over the next 18 months, a move the company expects will result in annual savings of $2 billion. Hurd, who arrived to his CEO office less than four months ago, has made several executive hires in recent months, including CIO Randy Mott, who Hurd recruited from HP's chief competitor, Dell Inc.

The changes in HP's salesforce means that the Customer Solutions Group (CSG) will be split into three business units. That could cause some confusion about who is responsible for what, said Carmi Levy, senior research analyst for Info-Tech Research Group Inc., based in London, Ont.

"Smaller guys have less expertise in-house, so they look to companies like HP for guidance," Levy said. "I think they're probably the ones who will be most affected because their rep might change, or they might have to deal with two or three reps instead of one."

Analysts suggested that customers should pull out their HP contracts and service level agreements, call up their reps and ask for assurances that services will remain unaffected.

However, SMB customers could ultimately benefit from streamlined operations and improved lines of communication between HP and its channel partners, said John Madden, a practice director at Boston-based Summit Strategies Inc.

Hurd's restructuring, Madden said, is the first step toward "making a leaner, meaner HP that is able to serve a variety of different constituencies and be more competitive, especially in the SMB market."

One chief problem, said Gartner Inc. research vice president Leslie Fiering, is that account management is currently "a huge, huge weakness for HP." Still, Fiering said, the "customer-facing pieces seem to remain intact" following the recent restructuring.

HP is focusing on channel partners that "focus on ROI," Fiering said, and that bodes well for SMBs. But any tinkering with the sales organizations does leave room for trouble, she said.


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