HP to invest in direct and channel sales as market improves


HP to invest in direct and channel sales as market improves

Microscope contributor

Hewlett-Packard is hiring again and plans to beef up its direct sales team to target more enterprise customers.

The good news - for some resellers at least - is that the Palo Alto tech giant will also invest more in channel partners that hone in on SMEs.

Buoyed by a 25% rebound in fiscal first quarter profits to $2.3bn (£1.47bn), HP CEO Mark Hurd said on several occasions during a conference call with analysts that it planned to boost its ranks.

"We address a $1.3tr IT market, the enterprise market represents roughly half of that, and even though HP's sales force is roughly 50% larger than when I joined the company, we want to increase that number," he said.

Around 17 months ago HP announced plans to lay off 24,600 jobs worldwide, which it forecast would save $1.8bn annually, though it said at the time it expected to refill half those jobs within three years.

In addition to the corporate enterprise, Hurd said HP also needed to "work hard" to address SMEs - the domain of the channel - both domestically and abroad.

"We are hiring now and will continue to invest in direct sales and channel partners to better reach [both] these [sets of] customers," he said.

Resellers would welcome a boost in HP channel account managers which have shrank in number during the recession, but any potential rise in direct sales is likely to be met with more sighs of frustration by enterprise players.

Sales in the first quarter ended 31 January grew 8% to $31.2bn including a return to growth of its hardware divisions, a marginal drop in services and flat growth in software.

Enterprise Servers and Storage turnover went up 11% to $4.4bn, including a 27% climb in ISS sales as blade revenues grew 24%. Storage and Business Critical Server revenues were down 3% and 22% respectively.

Revenues in the Imaging and Printing Group went up 4% to $6.2bn; supplies grew 1%, commercial and consumer hardware grew 4% and 21%.

However HP said ink and laser printer hardware supply issues meant it could not fulfil all demand and expect ed some further issues on the laser front for whole first half of the year.

Personal Systems Group grew 20% to $10.6bn with desktop and notebook sales up 25% and 16% respectively.

Hurd said it seen a strong consumer PC segment that it expected to continue and was factoring in an H2 corporate refresh.

Services revenue fell 1% to $8.7bn; Infrastructure Technology Outsourcing rose 2% to $3.9bn, Technology Services decreased 2% to $2.4bn, Application Services and BPO were down 8% and 3% to $1.5bn and $734m.

Software revenues were flat at $878m.

The Americas and Asia Pacific markets improved for HP growing 9% and 26% respectively but EMEA grew just 1%.

"We saw a mixed story in Europe...some markets saw a rebound and some looked stagnant to us," said Hurd.

"We probably want to see the whole of the first quarter close, get all of that data before we make a call on true IT growth for the year," he added.

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