Can Hewlett-Packard really re-invent itself?

HP has been talking about re-inventing itself for around a year. Now, it is time for the talk to end and the action to start says HP's Middle East GM, Ali Ferling.

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By  Rob Corder Published  November 22, 2000

It feels like we’ve been writing a lot of “HP re-invents itself” stories recently. The appointment of Carly Fiorina as CEO gave us one opportunity; the attempted acquisition of PriceWaterhouseCoopers was another; and then there was the launch of the high-end SuperDome server.

None of these seemed particularly important to the Middle East. Sure, there’d be a trickle-down effect as marketing focuses changed, but it has been hard in the past to look at HP’s Middle East operation as much more than a box-moving operation; and not a particularly good one at that, right?

Right, agrees Ali Ferling, general manager for HP Middle East. But that was two years ago; a time when HP’s local operation consisted of one person and some distributors working behind the protection of exclusive agency agreements.

That’s a past, and an image, that today’s 60-person strong Middle East operation hopes to bury. “We are moving from ‘product-push’ to ‘solution-pull,’” explained Ferling in a breakfast meeting with ITP.net today.

That mission has already driven a massive overhaul of HP world-wide into an organisation that builds solutions around customer needs, rather than building technology that is then hard-sold to customers.

OK. So you’ve heard that pitch before; and not just from HP. You’ll hear the same thing from IBM, Compaq, Sun Microsystems, et al.

But HP says it is offering something different. It’s putting together solutions that go beyond the traditional hardware/software/services/support package. It is putting together business solutions that make it much more of a partner than a supplier to its customers.

Take the example of the Jumeirah International Group, which recently issued a tender for creating Internet cafes at Emirates Towers. In came the usual bids for PCs, monitors, hubs, switches, etc, and as you would expect, there was little differentiation between the proposals.

That is, except HP’s.

“We sold a concept, not boxes,” explained Amr Hassan, retail account manager for HP Middle East. That “concept” was a detailed business plan for Jumeirah International on how to make the Internet cafes work. Sure it included what products to install, but it also included how to market the cafes; how to create the right atmosphere in the cafes; how to make sure people were happy with the experience when they used the cafes.

That type of business planning for its customers is what HP hopes to use to strengthen its position in the Middle East’s largest corporates, telcos, financial institutions, and dot.com companies.

Another service that HP will use to differentiate itself in the Middle East is to offer funding to companies. This could be in the form of extending lines of credit to large accounts; or it could be in the form of providing venture capital funding to startups. HP, in fact, is a bank. It has its own banking license registered in Ireland that allows it to offer a whole range of appropriate banking services to its customers.

The strategy certainly looks sound, and it has certain elements that differentiate it from competitors that may prove attractive. The question must surely remain, however, on whether HP can execute on this strategy at both an international and a local level.

The challenge at a local level seems to be that the strategy will be highly people-intensive, and HP will need to convince major customers that it has the skills available to see projects through.

HP’s failure to acquire PWC’s army of consultants has meant that HP is forced to grow its skills base organically. This will be a tough and time-consuming process in any country. Finding the right skills in the Middle East will be even harder.

Augmenting the HP skill base with skills in the channel is a natural direction to go, but the process of improving skills in the channel may also take too long. “We can’t limit ourselves to the speed of our partners,” said Ferling.

The solution, according to HP’s Middle East office, is two-fold: first, to draw on a pool of consultants from the wider EMEA region; secondly to recruit like crazy. “It’s all I ever seem to do these days is hire people,” joked Christoph Schell, who runs HP Middle East’s commercial division. That division handles customers that are too big to be considered retail customers, but not big enough to warrant their own HP account handler.

The local office is only in the early stages of the transition to a “solution-pull” company. Evidence that box moving was still driving the company came as Ferling announced year 2000 growth figures for only printers (27%); and PCs/notebooks (65%). Not a mention of solutions.

Ferling did promise, however, that next year he would announce results by customer segment. We’ll have to wait until then to get our first feel for whether the “re-invented” HP, is doing any better than the old one.

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