Industry welcomes HP PSG reprieve

HP's not-unexpected decision to U-turn over the future of its PSG business unit has been generally welcomed.

HP's not-unexpected decision to u-turn over the future of its PSG business unit has been generally welcomed.

In the two months since Leo Apotheker made the announcement that would ultimately cost him his job, a storm of uncertainty and doubt gathered around the business, with rivals such as Acer, Dell and Fujitsu TS quick to put the boot in.

In a statement issued last night, HP said that the review of the business had revealed how deeply intertwined PSG was with the rest of its business, and the massive extent to which it contributes to HP's "portfolio and overall brand value".

Jeremy Davies, CEO at Context, agreed that HP would never have been able to divest the unit, saying it was "too interlinked and would have cost a fortune. There were too many dependencies in the business."

He praised new CEO Meg Whitman for turning her back on Apotheker's bizarre strategic decisions but suggested HP's board needed to undergo a period of reflection over why they had hired the errant CEO to begin with.

Responding to questions over uncertainty within the channel, Davies told MicroScope he believed there would be "no lasting damage."

"Confidence was shaken, but the fact that Apotheker has gone and Whitman took swift action will do a lot to restore confidence," he added.

Phil Codling at TechMarketView took a similar view, saying that HP had done a "very silly" thing but adding: "[It] will probably get away with this for now. For one thing, the company is number one in shipments and volumes for PCs worldwide. It is not going to fall away in that market."

Mark Fabbi, vice president and distinguished analyst at Gartner, said that any uncertainty around a vendor's future would naturally lead to risk around customers re-evaluating purchase decisions, adding that Gartner had told clients to consider HP's future carefully over the past two months.

"I believe the situation was putting additional pressure on the channel," he said.

"Having made such a quick and definite decision certainly will help turn things around, but going forward HP has to move beyond just keeping the PSG business to showing that they can compete effectively in a more complex market where tablets and other mobile devices are increasingly the device of choice for many users," added Fabbi.

Dave Johnson, senior vice president of corporate strategy at Dell, said HP's decision not to back away from PCs was "consistent with our vision and validates our long-term strategy."

However he couldn't resist the chance of a subtle dig at the rivals, adding: "From the endpoint to the datacentre and cloud, customers value the certainty and predictability of working with Dell."

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