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HP’s decision to cancel the proposed sale or spin-off of its $40 billion PSG business has brought joy to its partners.
Said Ujjwal Mhatre, Director, Orient Technologies, “A spin-off would have impacted at least 20 percent of HP’s global business. It could have affected contracts with large enterprises, as well as the company’s IPG and servicing, both of which are huge profit-making businesses. Separating the PC division would have diminished HP’s buying power with component makers because HP would have lost economies of scale.”
To many partners, the initial news of the sale came as a shock because the uncertainty meant they had to continue selling products that had no clear future roadmap.
“Due to the lack of proper guidance by HP, many tier-3 partners started promoting other brands. Our normal sales of 1,000 laptops per month dipped by 10 percent in September to 900 units; however, it returned to more than 1,000 units in October due to the festival season,” informed Sandeep Garg, Director, Cyber Park.
Added PL Suhasaria, Director, Caltron Group, “The confidence of the HP sales team was at a low, therefore HP PSG lost about 20 percent market share to Lenovo and Sony.”
On the enterprise front however the impact was not much. “The enterprise segment understands that mergers and acquisitions are part of business, and it was quite confident about the status of ongoing contracts. Still, we observed delays in new contracts from the enterprise and SMB segments,” said Rajeev Mehta, CEO, Innovative Enterprise.
But now it’s business as usual. “With the reversal of the decision, customer confidence is back. We expect the execution of the contracts which were delayed due to the confusion,” said Rajeev Krishnaswamy, Director, Infobahn Technical Solutions. |