Commercial PC
HP scrapes through
Last year HP won the commercial PC category (notebook and desktop) by a fairly comfortable margin. In 2009, its victory was far less assured. Dell and Acer came second and third, while Lenovo lagged behind.
Hewlett-Packard
HP has the widest range of commercial PCs, including thin-clients, desktops and notebooks, and enjoys the widest penetration. However, issues of channel over-capacity continue to plague the company; it scored lowest on partner profitability. Partners appreciated HP’s strategy of having different ranges—DX, Pro and Elite for desktops, and ProBook and Elite for notebooks—which helped them slot products according to user profiles.
HP is highest-priced among peer brands; partners feel that in an economic slowdown customers are unwilling to pay a premium. Respondents gave a thumb-down to Smart Quote, the new automated tool introduced in February 2009 for SPC (special price clearance). They said the tool delayed the SPC process to 7-15 days and blamed the delay on managers responsible for approving SPC requests.
HP continues to enjoys a strong brand-pull, and is the most aggressive in customer marketing. Respondents however said that the consolidation of HP’s service partners in 2009, and the introduction of regional neutral service providers, has affected the quality of post-sales support.
Respondents added that the PSG business had the least amount of problems compared to TSG and IPG, which were plagued by account management and product unavailability issues, respectively.
Dell
What helped Dell take the second position is that it scored better than its peers on price-performance, partner profitability and post-sales support. Dell has positioned its Vostro range for SMBs, while at the high-end it has Optiplex for desktops and Latitude for notebooks.
While on performance, Dell is rated at par with HP, on the pricing front it is the most aggressive. For deals of even five PCs, it offers SPC which is at least 10 percent lower than HP’s. Many HP and Lenovo partners who took the poll admitted to having done business with Dell on specific orders. Dell’s fixed front-end commission and simple back-end incentive model also guaranteed better partner margins compared to peers.
Product availability was a major issue for Dell as respondents reported delivery delays of more than two weeks for desktops for online orders, as against the committed 7-10 days. They said that while distributors have good ex-stock availability of Vostro notebooks that for desktops is lacking.
Dell’s strength is clearly in class B and C cities, from where it polled 75 percent of its votes. Respondents in these cities said that they preferred Dell because it offers the best warranty support.
While the company has put in place a deal registration mechanism, it’s not perceived to be transparent. Also, it lacks a proper named-account policy; this creates conflict regarding which accounts are direct and which are in channel domain. With Dell still doing a large portion of its business directly, the biggest fear among partners is what happens if Dell changes its channel strategy.
Acer
In 2009, Acer turned its focus on the commercial PCs, and this reflected in the survey with the brand scoring ahead of Lenovo. The company improved its product availability and became very price aggressive, which helped it win large deals in the government, education and SMB segments.
It did a good job of segmenting products, which wasn’t the case earlier. For desktops, it has the Power brand for value-conscious buyers and Veriton for enterprises. For notebooks, it has positioned Travelmate at the entry and mid-range, and Extensa at the high-end.
Acer also increased its brand visibility by running vertical marketing programs. It ran the back-to-school campaign to promote notebooks in the education sector, which was appreciated by channels.
Respondents added that the news of Acer overtaking Dell as the No 2 PC vendor globally created a positive customer influence about the brand and helped them clinch deals. Acer’s Select program launched in the H2 2009 has been appreciated even by some HP and Lenovo partners as the back-end margins offered by the company are good; however its post-sales support got a low score.
Lenovo
Lenovo, which won the consumer notebook category this year, seems to have gone wrong in managing its commercial PC business. Its relationship business team is facing severe criticism from large partners, particularly in north, about unkept promises on rebates, poaching of accounts, and pressure for over-stocking.
Throughout 2009, Lenovo’s market operating price (MOP) was under significant stress. Partners allege that many key business partners with the help of some Lenovo employees misused the SPC mechanism and sold PCs in the open market.
While Lenovo did address the matter by making the SPC process stricter and even delisting a few partners and firing some of the staff, respondents said that the low MOP affected their business, significantly.
Lenovo polled the lowest in product availability. While some partners complained about unavailability of certain high-end models, a few others opined that Lenovo didn’t have enough SKUs to fit different user profiles. Its post-sales support was rated better than HP and Acer.
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