Dell, Lenovo Take Aim as HP Begins to Split in Two

By Jeffrey Burt  |  Posted 2014-10-07 Print this article Print
business trouble

In addition, in a video on the company's Website, Michael Dell—without naming HP—stressed the stability and vision of the now-private vendor, which is pushing to become an IT solutions and services provider.

"In light of recent news and uncertainty, I want our customers and partners to know that Dell has never been more certain," the CEO says. "Our business from end to end is strong and gaining momentum. Today, Dell is the fastest growing integrated IT company in the world. … The best way for Dell to enable our customers’ success was to be a comprehensive provider of future-ready technologies, from the desktop to the data center to the cloud, and that’s exactly what we’ve done."

Michael Dell said the company has its "best-ever portfolio of hardware, software, solutions and services, all engineered to work together as open, scalable, end-to-end solutions. We are fully committed to all of our businesses, now and for the long term. … As a private company, we’re more stable, more driven and more liberated to lead in a fast-changing industry and an uncertain world."

In response, HP officials said in a statement that "the only thing resonating with Dell's strategy is a lack of enthusiasm. Based on the conversations we've had, our customers and partners understand our strategy and they are as excited as we are for how two laser-focused Fortune 50 companies and help drive their businesses."

In their own statement, Lenovo officials said they would have no specific comment on HP's decision, but noted their company's continued strength in the global PC market and the capabilities Lenovo will be adding not only in servers with IBM's x86 system business in hand but also its $2.9 billion acquisition of Motorola Mobility from Google.

"We are confident this trend [with PCs] will continue, as we are focused and will continue to leverage the consolidation of this industry to grow; as we are innovative and the market can expect we will launch more and more exciting PC, mobile, enterprise and ecosystem products in the near future and in the long term; and as we are consistent and clear with our strategy, which after we close both the IBM System x and Motorola deals, will give us three growth engines—PC , Mobile and Enterprise," they wrote.

Both are going in the opposite direction of HP, choosing instead to broaden their capabilities rather than narrow them. Pund-IT's King said he didn't think HP's decision to split the company signaled that the push by some vendors—including Dell and Cisco Systems—to become comprehensive IT solutions providers had failed.

"Dell is doing a terrific job of building its end-to-end strategy, and Lenovo will do a good job now that it has [IBM's] System x [business]," he said.

It could be an indication of the difficulty of managing a company the size of HP, King said. Dell and Lenovo may be pushing to greatly extend the reach of their businesses, but they're not the size of HP. At the same time, for public companies to thrive in these "earning-obsessed" days, they either need to be dominant in their markets—like Apple—or be a PR darling like Facebook, he said.

For old-line tech vendors like HP, it's a hostile environment.


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