May 11, 2006 7:57 AM PDT

HP: We're hurting Dell

SAN FRANCISCO--Hewlett-Packard says it is displacing Dell from its powerful position in direct PC sales by luring away its business customers.

HP said on Wednesday that larger businesses are increasingly dissatisfied with Dell's sales practices. It also cited Dell's warning earlier this week that its first-quarter earnings will be below analyst expectations.

"We are displacing Dell in most of the bigger and strategic accounts," Alberto Bozzo, vice president of HP's personal systems group, told ZDNet UK at the HP Mobility Summit here.

Alberto Bozzo Alberto Bozzo

"Most of our large customers are dissatisfied customers from Dell. They were dissatisfied with the services that haven't been delivered, delivery times and with the quality of the product," he added.

Bozzo said that Dell's shortfall in performance was linked to "fierce competition" in the direct-sales market.

"Customers are asking to buy directly from us because of the quality of service of the direct relationship," Bozzo said.

HP is aiming to attract more corporate customers to its direct sales operation.

"There's still a huge global customer list to address--mainly current IBM and Dell customers," Bozzo said.

HP's revenue grew 6 percent in its last financial quarter, when it recorded net revenue of $22.7 billion. Dell is expected to record between $14.2 billion and $14.6 billion in revenue for the period ended in April. HP's personal systems group--which competes directly with Dell--saw its revenue grow 8 percent year-over-year to $7.4 billion in the first quarter.

Dell declined to comment on HP's claims regarding its revenue, as it is in its "quiet period" ahead of the disclosure of first-quarter results. But Dean Kline, a senior manager at Dell, denied the computer seller was losing big customers to HP.

"Large business customers, both U.S.-based and globally, continue to turn toward Dell to get the benefits of working directly with Dell as their technology partner," Kline told ZDNet UK by e-mail.

"Data from IDC backs this up. According to IDC results for the fourth quarter in 2005, Dell held a 44.4 percent share of PCs shipped to large business customers (those with greater than 500 employees) in the U.S., compared to HP's 21.9 percent. Dell's share increased +2.4 points year over year and +2.7 points quarter over quarter from the third quarter last year, while HP's grew by +1.9 points year over year and +0.8 point quarter over quarter," Kline said.

Tom Espiner reported for London-based ZDNet UK.

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More like Dell is hurting themselves
Even the HP guy alludes to this:

"Most of our large customers are dissatisfied customers from Dell. They were dissatisfied with the services that haven't been delivered, delivery times and with the quality of the product,"

Dell has definitely lost it's way resently, I'm a long time Dell fan but I just recently chose an HP server over a Dell because Dell would not sell me the configuration I wanted because what I wanted wasn't one of their "standard" configurations. (Complete story at <a class="jive-link-external" href="" target="_newWindow"></a> )

If Dell can lose sales to someone like me I have no doubt they are losing lots of sales to lots of people.

I still have faith in Dell though, I think once they have figured out what has gone wrong they will fix it and return to their former glory.
Posted by raitchison (103 comments )
Reply Link Flag
As A Former Dell Home Computer User...
When the time came to buy a new home computer, I wanted Anybody But Dell, which led me to HP.

My 2002 HP computer has been problem free, and my next computer will also be an HP.

In addition, at the home computer user level, when you buy an HP, you can pick up exactly what you ordered/want at a local retailer. With Dell, if they screw up your order, you have to go round and round with some guy in India.

HP's technical support is, well ... I don't know. With a problem-free computer you don't need technical support.
Posted by john55440 (1020 comments )
Reply Link Flag
HPLaserJet printers are impressive
I've been really impressed with HP's laserjet printers. I'd be interested in checking them out for PCs if they're engineered like their printers.
Posted by backgroundnoise (32 comments )
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DELL the screw driver company is the next Enron
It's way too overvalued with a 15x price/book.

<a class="jive-link-external" href="" target="_newWindow"></a>
Posted by sharikou (106 comments )
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Message has been deleted.
Posted by anarchyreigns (299 comments )
Link Flag
I have been a long long time Dell customer, since the days of Computer Shopper when Mike Dell answered the non 800 number. My most recent laptop was a Gateway (Dell does not offer a tablet PC) and more and more folks I talk to have reported a slide in customer service and customer focus. Gonna take more then a day or two of slashing prices for Dell to reverse the trend. Regardless, HP left such a bad taste in my mouth years ago, that it would take a lot for me to shop them.
Posted by akbar_or_jeff (14 comments )
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Aparently you have hit the nail on the head
I never knew that the namesake had talked to buyers, the only experience I have with dell is the free laptop that I was given.... there were dozens donated because their batteries do not recharge.

I wonder who that company bought their replacements from?
Posted by qazwiz (208 comments )
Link Flag
This statement may be true. But i have ALWAYS received much better service from dell. When i ordered my brawn new $2,000 laptop from hp, they ended up sending me a refurbished laptop. The sad part is three days after i got the laptop, the hard drive fell right out of it, they had forgotten to tighten all the screws after they were done refurbishing it. The worst part was i had bought over $3,000 worth of software for college, it took 4 weeks for me to get the company's to give me another copy of their product after explaining to them what happened. I personal think dell is built 100% sturdier and better then Hp.
Posted by Geius (1 comment )
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I have been a Dell customer for years, even when I worked for HP 4 years ago I still purchased Dell products. The only HP device in my home is a network printer. HP's printers are great and HP should stick with making printers, not computers. I had a laptop and within 6 months it started to fall apart. Dell may be slow with a delivery, but at least the machines last.
Posted by TheRealComputerGeek (1 comment )
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