How HP Can Differentiate

By John G. Spooner  |  Posted 2005-07-19 Print this article Print

Itself"> Aside from sorting out its sales channels, HP must work to make sure its products stand out, said Chris Foster, analyst with Technology Business Research Inc. in Hampton, N.H. "Other than the printing business, [Hewlett-Packard] doesnt have a strong differentiation in any of its products. Its obvious on the PC side, in industry standard servers … and it has pretty much eliminated the differentiation in business critical systems" by moving to Intel Corp.s Itanium chip from its own HP PA-RISC and Compaq Alpha processors, Foster said.
"I think the decisions [HPs management team] have made are great for the operational part or the business," Foster said, but added, "The next step is to figure out how youre going to grow, how youre going to get into high-margin businesses. That part is going to be more difficult."
Those high-margin businesses, all of which HP is either in now or capable of entering in some way, include offering consulting services, software and differentiated hardware, Foster said. HP is already plotting its next steps in areas such as software and services. However, it kept discussions of its product plans to a minimum on Tuesday so as to avoid creating any confusion, said Shane Robison, HPs executive vice president and chief strategy and technology officer. Robison said, in an interview with Ziff Davis Internet News, that HP is reviewing its product plans. Not surprisingly, making advancements in software, storage and services are among its goals. "Software is an obvious area of growth for us, as well as services [and] storage" and new media, which includes items such as televisions for consumers and back-end equipment to deliver multimedia, he said. "That is where we will spend a lot of time and attention, between [CEO] Mark [Hurd], myself, and some of the other executives." Although he declined to provide more details on HPs product plans—many of them are still being worked out and will be announced at a future date—the company is "looking at everything from enhancing existing product lines and services categories to adding new ones," Robison said. Meanwhile, streamlining its two consumer PC brands, which include HP Pavilion and Compaq Presario desktops and notebooks, might help the HP PCs better stand out with consumers, said Richard Shim, an analyst at IDC. Although HP "doesnt want to kill off product lines … I think it needs to pick which segments it wants to go to with and which brands," Shim said, because multiple brands "muddy the waters and confuse people." Ultimately, "Theres a sense that doing business with Dell is easy and doing business with other companies [such as HP] is hard," said Roger Kay, principal analyst at Endpoint Technologies Associates Inc. Thus, HPs got its work cut out for it when it comes to battling Dell Inc., the worlds largest PC maker, in the PC arena and companies such as IBM and EMC Corp. in other lucrative markets, such as services and storage. HP has already invested in itself, hiring a new CIO, Randall Mott, and installing a new PC chief, Todd Bradley, who will work toward its new goals. Its also revised its printer products and its storage product line of late. As Hurd sees it, there are numerous opportunities and more work ahead for HP, when it comes to its product lines and its efforts at winning new business. "Were not under the illusion that weve finished all our work with what weve described today," he said. "We have clearly more work to do." Check out eWEEK.coms for the latest news in desktop and notebook computing.

John G. Spooner John G. Spooner, a senior writer for eWeek, chronicles the PC industry, in addition to covering semiconductors and, on occasion, automotive technology. Prior to joining eWeek in 2005, Mr. Spooner spent more than four years as a staff writer for CNET, where he covered computer hardware. He has also worked as a staff writer for ZDNET News.

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