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'New HP' gets mixed channel reaction

Louise Boltman
Hewlett-Packard's merger with rival technology firm Compaq has met with mixed reaction from the industry and market.

Analysts are predicting that the new HP's claims that it will build a strong services offering may conflict with a channel that currently has a strong share of Compaq-related services.

Senior research analyst at AMR Research, Kevin Lucas, claimed the merger will create "unwelcome turmoil" within the channel and may result in defections from the Compaq channel side. "HP will find it very hard to build the service offering it desires. Customers do not tend to see hardware vendors as strategic sources of services and, in practice, the new HP's likely failure will continue to leave room for service partners," he said.

But Lucas admitted that both sides of the channel "stand to gain from a broader range of platform options, provided the new firm creates a marketable platform strategy".

Russell Luke, sales and marketing director at Precise UK, a reseller for both industry giants, welcomed the move: "Consolidation of this kind will draw out and unite the strengths of both companies which will in turn offer customers improved service."

He said he was optimistic that the move would pull IT out of the current downturn and restore customer confidence. From Precise's own point of view, Luke claimed it will make business easier for the firm. "As a partner of both companies the merger will mean that we will eventually be able to provide a solution for one integrated technology," he said.

John Kemp, managing director of A2000 Distribution, said he didn't think there would be "any significant impact on the reseller channel in the short to medium-term", but added that there could be long-term changes in areas such as stocking requirements.

www.hp.com

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