HP's decision to stitch together its PC and printer businesses is likely driven by cost cutting but it could bring financial benefits to channel partners.
In a move first mooted by former CEO Carly Fiorina but not implemented before Mark Hurd placed his butt on the hot seat, HP yesterday confirmed the formation of the Printing and Personal Systems Group (PPSG).
“By providing the best in customer-focused innovation and operational efficiency, we believe we will create a winning scenario for customers, partners and shareholders,” said CEO Meg Whitman.
In reality the move will lop a load of cost out of the business, starting with the retirement of Vyomesh Joshi, veep for the printer business, leaving Todd Bradley to run the new PC and printer lovechild.
This is an "obvious cost saving," said Steve Brazier, CEO at channel abacus-stroker Canalys. He added: "[This] will then be replicated across the regions and countries; presumably you can think how many vice presidents you can cut out in one move."
But although HP staffers will not welcome further rationalisation in the ranks, the move could be pure goodness for resellers and distributors as HP has been "more difficult to work with" after splitting its Solution Partners Organisation in three.
Resellers and disties had lost bartering power while dealing with a trio of different faces at HP – the Imaging and Printing Group (IPG), the Personal Systems Group (PSG) and the Enterprise Servers, Storage and Networking division.
"By bringing PCs and printers together presumably with one sales force to the channel some of that power comes back again in terms of negotiating rebates," Brazier said.
Mike Rodwell, commercial director at Computacenter, agreed the overall visibility of volumes resellers trade with HP will increase.
He said that he understood the "synergies" in the back office, and added: "I still believe that sales and technical staff will operate more locally as [PCs and printers] are very different technologies and go-to-markets".
Jeremy Davies, CEO at channel beancounter Context, said the merger created clear cost savings opportunities but is "bound to confuse not only the messaging from HP, but also the relationships with its channel partners".
He said on top of the fact the products are different, have "diverging dynamics and to an extent, different market ... the imaging business is moving towards the [Managed Print Services] model, and PCs are a hardware commodity play".
In addition to the PPSG change, HP also revealed the Global Accounts Sales org will integrate into the newly named HP Enterprise Group led by David Donatelli, comprising Enterprise Servers, Store and Networking and Technology Services.
Brazier at Canalys said a "more ambitious" move would have been for HP to split its entire business between "volume and value". ®