Whitman's latest report makes grim reading

Meg Whitman might have provided analysts and investors with a great deal of honesty about the time it's taking to turn the business around but as Billy MacInnes discovers the bad news has been coming for quite a while now out of HP

It was nice to see, among all the bad news at HP, that CEO Meg Whitman was keen to strengthen the company’s links with its channel. But before we get to the good stuff, let’s look as briefly as we can at the bad stuff at HP.

When it comes time to look back on this period in HP’s history, assuming HP is in a position to look back, 18th August 2011 will surely go down as “Black Thursday”. That was the day HP announced plans to sell or spin-off the PC business, revealed it was acquiring Autonomy and killed off the TouchPad tablet and plans for a range of webOS smartphones.

StormThe announcement was notable for combining the good (buying Autonomy), the bad (ending plans for tablets and smartphones) and the ugly (selling/spinning off the PC business). It proved to be the undoing of CEO Leo Apotheker who was swiftly replaced by Meg Whitman. When she took over, Whitman quickly reversed the decision to get rid of the PC business although the wisdom of that course of action is still open to question.

A year down the line, have things improved at HP? No, not at all. At a recent analyst briefing, Whitman predicted a fairly gloomy outlook until 2014 and said it would take until 2016 to turn the company around. She revealed HP planned to cut its printer product range by 30% and reduce its PC line up by a quarter. On the tablet front, HP has announced one, the HP ElitePad 900, but the Windows 8-based product is not due for release until January. Whitman also revealed HP smartphones are unlikely until 2014.

Still, there’s nothing wrong in reducing the scale of the product range for printers and PCs because the more products HP has the more complex its supply chain. A point made by Whitman who stated: "The cost impact that too many products and SKUs has on our supply chain and the ability to focus and have the right inventory on hand to forecast is incalculable.” The same must be true for channel partners who have to be able to supply (or be seen to be able to supply) all of these products to the customer.

In any case, Whitman was pretty forceful in exhorting HP to “capitalise on the enormous strengths of our partner network with world class programmes that don't change very often”. Consistency and reliability are the bedrock of any type of successful relationship, of course, but I can’t help feeling part of the reason HP’s programmes have changed often is down to the strategic upheavals at the vendor.

Whitman talked of HP’s need “to reconnect with the channel. I love the channel. We need to deliver consistent and excellent programmes that the channel can rely on everyday.” Again, this is surely down to HP. If it wants to deliver consistent programmes, it needs to deliver a consistent strategy. Preferably one that works.

The jury is still out on the latest one.

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