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By | Paul Kunert 7th September 2011 13:32

Dell woos rattled HP PC sales partners

'We'll still be here', insists direct-sales mammoth

Dell has accused archrival HP of unsettling channel partners by revealing its intention to spin out the PC biz, claiming it is a "stable" alternative for resellers.

In the three years since Dell binned its direct-only mantra and formalised a reseller network, sales via partners have accounted for 30 per cent of its turnover worldwide.

And the recent announcement by HP CEO Leo Apotheker that it is exploring strategic alternatives for its PC biz may be the tonic Dell is looking for to talk up its dealer engagement and ultimately topple the world's largest client vendor.

“HP's proposed actions are in strong contrast to Dell’s strategy. Dell remains a stable partner that is strongly committed to the PC business," said Kathy Schneider, Dell exec director for channel marketing and programmes EMEA.

Enterprise client and mobility solutions remain vitally important to Dell customers she said, "We have had great response from partners and tremendous interest from existing partners and potential new ones around the world since the news.”

In the last set of numbers for Q2, Dell client revenues grew 6 per cent sequentially to $8.5bn, but were flat on the year ago period. HP recorded a drop in its fiscal Q3 PC sales of three per cent year-on-year to $9.6bn, but grew two per cent sequentially.

HP has already tried to calm the reaction to Apotheker's ill-judged comments, with PSG UK boss Paul Hunter bizarrely claiming recently that HP is not quitting the PC game irrespective of whether it spins off, sells or maintains the division.

It is too early to tell if HP's publicity gaffe comes homes to roost in terms of sales, but Jeremy Davies, CEO at channel analyst Context, felt it would play into the hands of rivals.

"How could anyone make such a staggering mistake. Not the decision to hive off PSG but the amount of damage that the announcement did to HP's credibility, the trust in the channel and the relationship with customers," he told El Reg.

"Anyone in the process of buying HP or thinking about engaging long term must be questioning any deal," he added.

The sentiments were echoed by IDC research manager Eszter Morvay. She asked: "Why cause turmoil that is upsetting channel partners and customers? Everyone is in limbo. It is bizarre." The public response from some channel partners was understandably less damning, with Alex Tatham, sales and marketing director at long-standing HP distie Westcoast, proclaiming "business as usual".

However Tatham added that HP had been too defensive since the announcement: "Let's go on the offensive so that it is all about a positive approach with sales programmes to drive new business".

One of HP's largest PC resellers, which asked not to be named, said there had been a lot of talk from competitors, analysts and the press but "I have not heard one customer want to talk about it, this is not on the agenda of CIOs."

However, the reseller conceded that the longer the saga dragged on, the more likely it becomes that it will turn into a horror story.

Sources close to HP reckon there has been "huge disquiet" among its sales force – rather than resellers – which now has roughly seven weeks to hit year-end targets. "These guys have had the rug pulled out from underneath them," said one. ®

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