HP's Whitman To Partners: Don't Give Up Hope On PCs

Hewlett-Packard CEO Meg Whitman told CRN Thursday that the death of the PC market has been greatly exaggerated.

"We would like to see the partners not give up hope by any stretch of the imagination on PCs because I don't actually think PCs are dead," said Whitman in an exclusive interview with CRN. "I think you are going to start to see a slowdown in the [PC unit] decline. Remember there are 140 million PCs out there that are older than four years, and people may have brought in tablets in the interim, but eventually they are going to replace that device."

Whitman sees big opportunity ahead with business customers poised to upgrade from Windows XP, with Microsoft support for XP ending in April 2014, to Windows 7. "Remember 40 percent of businesses are still running Windows XP," she said. "They are either going to upgrade their hardware and their software or they may just upgrade their software, but there is going to be an upgrade cycle that the partners can participate in."

[Related: CRN Exclusive: HP's Whitman On Dell, Taxes And Windows 8 ]

Whitman said small, medium-sized and even large enterprises are sidestepping Windows 8 and moving to Windows 7. "We don't see a big demand for Windows 8 in business," she said. "So in my view, this XP upgrade cycle is all going to go to Windows 7."

Whitman's comments come after HP's Personal Systems' sales plummeted 20 percent to $7.58 billion for its second fiscal quarter ended April 30 compared with $9.47 billion in the year ago quarter.

HP solution provider partners, for their part, said they expect significant HP personal systems sales growth this year. A big factor in that sales growth, partners said, is the ability of the channel to wrap additional services around the HP offerings and provide logistics around device rollouts in businesses.

Majdi "Mike" Daher, CEO of Denali Advanced Integration, Redmond, Wash., No. 119 on the SP500 with $157 million in annual sales, said he expects his HP personal systems' sales to be up 30 percent this year.

"We are killing it in personal systems," said Daher. "We need to stop saying the PC is dead and we need to start saying the personal device is alive. The way we think of PCs has changed dramatically. To continue to talk about something in the past is like continuing to talk about [covered] wagons versus cars. Wagons are no longer around, but there is something else that replaced them completely. That [rapid introduction of next-generation personal devices] is what HP is doing very, very well."

Daher praised HP Executive Vice President Printing and Personal Systems Group Todd Bradley for doing a great job pivoting into a multi-device, multi-architecture world with new Android operating system devices and Chromebook products. "The dual OS strategy has really enabled us to have a great conversation with our customers," he said. "It is a matter of educating the customer that it is a device we are looking at -- not a traditional PC."

Denali is also seeing robust HP personal systems' sales growth in the virtual desktop interface market with thin clients accounting for as many as 15,000 seat upgrades. "HP make a fantastic thin client product that is secure and works great," he said.

Denali is also seeing robust Windows 7 demand in corporate America. "HP is coming up with great products for Windows 7 and that is where we are seeing business growth," said Daher. "That XP [client base] is not moving to an Android, Apple iOS or a Mac device. They are moving to Windows 7."

One of HP's great assets in the next-generation device battle is the legion of HP solution providers ready to aggressively upgrade the massive XP base to Windows 7, said Daher. "Apple and Google do not have the channel partners and the strength of the channel partners to move the massive numbers of XP devices to Windows 7," he said. "HP has that capability because they have a mature and capable partner ecosystem that can go out and compete and deliver on that migration from XP to Windows 7."

NEXT: HP Partners See Big Windows XP PC Upgrade Opportunity

Adam Shaffer, senior vice president of marketing for PCM, formerly PC Mall, a $1.5 billion IT solutions and services company headquartered in El Segundo, Calif., said he is "bullish" on the HP personal systems business with big enterprise customers doing significant Windows XP upgrades.

"It is refresh time for XP," he said. "We see this as a great opportunity to make that call to our customers. Their PCs are 'x' years old and it is time for a refresh. And the systems are more powerful, faster and energy efficient than ever."

HP has evolved its personal systems business with sleek new multi-OS hybrid devices, said Shaffer. "HP has been creating great products and it's a great moment in time to refresh PCs," he said. "What is brilliant about HP is they are not backing any one horse. They are playing the Android game, the Windows 8 game, the Chromebook game. In a world of bring your own devices to work, we need to be able to support them all."

Shaffer said HP has not gotten enough credit for its sleek and "sexy" new devices. "People always talk about Apple's stuff being sexy, but HP's stuff is now very sexy. People say the PC is dead. I have an iPad, but I don't use it. I use my PC all the time. And now I have tablet-notebook hybrid."

Shaffer, who recently attended an HP partner advisory board meeting, credited HP's Whitman with driving a new level of entrepreneurial spirit in businesses like HP's printing and personal systems unit. "The HP teams are more energized than ever," he said. "They are playing offense and that wasn't the case before Meg came on board. She has really brought HP together."

Dennis Wang, COO of Golden Star Technology (GST), a large HP partner based in Cerritos, Calif., with a significant HP business, said he expects his HP personal systems business to show double-digit sales growth this year as it has for the last three consecutive years.

GST's commercial and government customers are moving ahead with significant desktop upgrades, said Wang. For example, he said, GST recently won a $2.7 million, 2,500 unit desktop upgrade deal.

"There is an exaggeration on the decline of PCs," he said. "The flip side is there is too much hype around bring your own device and tablets. We still see a very big need for workstations, PCs and laptops. Customers still love their personal systems. Many of them are not ready for tablets or bring your own device. Customers still need reliable PCs and laptops that are secure and work well in commercial IT environments."

PUBLISHED MAY 23, 2013