January 23, 2006 4:00 AM PST

HP outlines long-term strategy

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managed Dell's Internet and Web-based infrastructure and had also worked at retailing giant Wal-Mart Stores, where he devised the retail and supply chain automation systems.

Mott will help HP implement the back-end processes that are needed to operate a top-notch direct-order Web site, said Roger Kay, president of Endpoint Technologies Associates. Information-intensive tasks like gathering and sorting reams of customer data and quickly reacting to changes in component costs are vital to improving the efficiency of a direct sales operation, and Mott's experience implementing such a system at Dell will be invaluable to HP, Kay said.

At the same time, HP has to avoid antagonizing its retail and channel partners with a renewed push toward direct sales, he said.

"When you go from direct to indirect, the only people who get upset are your own sales force," Kay said. "But if you've got distribution and you go direct, you're competing against the people that help you."

Improving its direct-sales operation allows HP to get closer to its customers and learn more about the areas the company needs to improve, said Stephen Baker, director of industry analysis at NPD Techworld. This could actually help HP's retail and channel business by allowing it to understand what its channel partners go through when making a sale or dealing with support, he said.

HP has little choice but to improve its direct sales model to compete with Dell and to sell its products more efficiently, said Baker. Retailers are faced with the same problem, and several have resorted to carrying inexpensive private-label brands to compete against direct sales vendors, he said.

Though HP's direct sales technology is expected to undergo changes, one thing that's not likely to happen is a merging of the HP and Compaq PC brands, the source said. Because the Compaq brand is still recognized in the market, it offsets the additional costs associated with maintaining two brands, the source said.

This approach makes sense, but HP needs to do a better job of differentiating between the two brands, Baker said. The Compaq brand has gone through several changes since HP bought Compaq, from a leading PC brand to the low-cost position it currently occupies within HP, he said.

Clearly, getting a better handle on what customers want is a big item on the agenda. Hurd has already talked about developing a next-generation data center architecture, which would consolidate the information it has spread across 700 different locations into a data center that would provide one, simplified view of its information.

Through its beefed up data center, HP hopes to gain a greater understanding of its customers and markets, Hurd has said in the past.

And from a services perspective, HP is hoping to leverage its own beefed-up data center with its services business, via running customer data through its own center.

And while HP has struggled with getting customers and the market to understand its "Adaptive Enterprise" concept, the same mistake will not happen with HP's "Next Generation Data Center Architecture," the source said.

"Adaptive Enterprise. What is that? No one understood it," the source said. "But the 'Next Generation Data Center' is something that everyone can understand. The name is (cumbersome). Don't be surprised to see it changed."

CNET News.com's Stephen Shankland contributed to this report.

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HP - INVENT????????
Since the 1970's I have watched the moves of management of American companies incorporate value engineering (designed obsolescence) and other moves since the only thing American sales forces can sell on is price. Now HP is joining them. They will end up with the quality level of Dell since that is the only way they can think of to compete.

As we installed a new Small Business Server for a customer this weekend, I commented that the customer should now be set for many years since they had more computing power than they will ever require. Our operations director replied, yes except todays equipment doesn't last like it used to and the software companies obsolete their software.

I thought back over the years and the best return on investment that I have seen was the Tandy Model 16 with SCO Xenix. Those machines served the needs of the small businesses I serviced for many years.

What the manufacturers do not realize is the fact that for most small businesses, the technology level we have at this time would be sufficient for many years. The problem is the hardware won't last and the software companies will make the OS obsolete.

Quality and long product life are important. Small business will have more opportunity to develop products and pay their employees better if they do not have to constantly replace low quality systems.

Is the goal of America continued world leadership of declining to a second rate or third world country? The decisions of our government and corporate will decide that fate.
Posted by EdShaffer (19 comments )
Reply Link Flag
No output devices?
I was surprised the article made no mention of HP's output device plan, other than the somewhat foggy implication of the company trying to move into digital commercial presses. If HP does become the "next Heidelberg," it will be interesting to see if they develop proprietary ink supply systems that are made obsolete every three months to prevent printers from sourcing ink from preferred vendors (as it their current racket with inkjet printers). Also, does anyone really believe HP still has the skill and integrity to make something as substantial as a printing press? As recently as ten years ago, HP laser printers were renowned for their durability and ruggedness. Now their desktop output devices are flimsy, disposable, toy-like commodity POSs that should make anyone with the name of "Hewlett" or "Packard" completely ashamed. Yeah, "HP-Invent" . . . my foot. In my view, this once-solid company deserves the same sort of grieving lament and eye-rolling that characterized another once-great American icon . . . GM.
Posted by Tom CyBold (30 comments )
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AMD to have 40% market soon
<a class="jive-link-external" href="http://sharikou.blogspot.com" target="_newWindow">http://sharikou.blogspot.com</a>

INTEL is hopelessly behind
Posted by sharikou (106 comments )
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Why are you quoting someones opinion as a fact?
Posted by Andrew J Glina (1673 comments )
Link Flag
The difference in HP's improvement is clearly visible to the end user...
Lately HP seems to be getting it right. If you notice it is one of the few companies with ethics. Though it's a company which is cutting costs right now, the below facts about the company make it a solid investment and future growth is assured.

a. You might have noticed that its Chat support division is now GDPowers certified. Though Dell and HP were in the running for the first company to be certified, HP won it hands down. Dell was a long way off. Dell offers charge phone support except for the one month standard hardware warranty. Other than this it also offers email and chat services, but not many know that it exists. HP on the other hand provided a 90 day free telephone support, a one year hardware warranty, and lifetime free chat support. Lifetime here means that as long as the user wants to use it. If the hardware is bad, ofcourse they make the suggestions for replacement. I personally spoke to a guy by the name Harold, and the guy was great. Also there is a way you can access support for any software you have purchased issues regardless of the make of the system. All you need to do is state that you own a particular model and proceed to troubleshoot. And their suggestions actually work.
b. HP has the edge in the AMD series. With Intel coming out with mediocre processors lately AMD is almost on even kneel with Intel even as we speak. HP has always professed that they would push the products based on the market requirements. And you now know for sure that AMD makes the fastest servers and PCs for 64 bit computing. In fact, I believe Steve should have opted for AMD instead of Intel. (Read <a class="jive-link-external" href="http://sharikou.blogspot.com/" target="_newWindow">http://sharikou.blogspot.com/</a>)
If you notice HP's involvement in the development of the Itanium failure, you would understand why HP is now trying to stay away from Intel.
c. They are cutting down costs rampantly. If you notice their range of Compaqs and the Pavilions, they are focussing on the right product mix and technology. (Features like Lightscribe, media drives (hardware features) are common feature while other vendors provide software features) However it appears that they are cutting down costs by 25k US jobs last year. Wonder how much it would be this year.

By the way, there are a few details you might require to contact HP chat professionals. One would be the model number of a HP system and also you would require. That would suffice for software issues. You would not be able to access support for hardware. There are a lot of procedures required.
Posted by thedevilbegone (139 comments )
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Couldn.t resist a swipe at a Dell...
The charges for Dell support really puts me off.. But here are a few newslinks for you on the current state..

<a class="jive-link-external" href="http://news.techwhack.com/2927/dell-moves-closer-to-possible-amd-based-pcs/" target="_newWindow">http://news.techwhack.com/2927/dell-moves-closer-to-possible-amd-based-pcs/</a>
(Ummm..Probably on track)

<a class="jive-link-external" href="http://news.techwhack.com/556/dell-philips-order/" target="_newWindow">http://news.techwhack.com/556/dell-philips-order/</a>
(Big order for Dell)
<a class="jive-link-external" href="http://news.techwhack.com/2279/231011-dell-claims-intel-would-dominate-amd-in-2006/" target="_newWindow">http://news.techwhack.com/2279/231011-dell-claims-intel-would-dominate-amd-in-2006/</a>
(Once more Dell bites the dust, but too soon to tell in the servers market)
<a class="jive-link-external" href="http://www.itjungle.com/breaking/bn011206-story01.html" target="_newWindow">http://www.itjungle.com/breaking/bn011206-story01.html</a>
(HP on its way to beat Dell in the AMD market for servers)
Posted by thedevilbegone (139 comments )
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Your first two sentences are SO wrong, it hurts. From laughing so hard.
Posted by inseattle (19 comments )
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Looking at sustainability of brand loyalty as a strategic driver should be at the top of the list. The last two notebook computers I purchased were HP. I generally have been happy with them. However this week I attempted to get help when my WiFi card went out. I spent 3 hours on the phone with someone with so heavy an Eastern Indian accent that I had to spell and have her spell many words. At the end of the three hours I was no closer to a solution than when I started. Perhaps this is not as important to HP leadership as selling as many products as possible and losing those customers that run into problems. However, It will be a major factor as I consider my next notebook and in my recommendations to my colleagues. I would think that others, whether they get their problem resolved or not, may have the same reaction.
Posted by brucevbrian (1 comment )
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