Why HP is failing and Dell is winning

This week was Dell's Annual Analyst Conference (DAAC) and next week is HP Discover [disclaimer: I've worked with HP and Dell for over a decade and covered both firms extensively], but this year I'll pass on the HP event and will be at VCE's analyst conference in Chicago. Here's why.

HP: Lessons NOT learned

Back in 2013, I wrote about how IBM had expertly outmaneuvered HP by anticipating what HP would be presenting at its event that year. As a result, a lot of customers who experienced both events lost faith in HP. What I found fascinating then, and now, is that HP hasn't learned anything from this. (HP is run by Meg Whitman, who attempted to run for governor of California nd effectively set herself up to lose by making a similar mistake, not anticipating.) Point is, if I'd lost millions because I didn't anticipate a rival, I'd learn from it, or at least hire someone who could advise me on how not to make the same mistake a second time.    

This year, as HP ramped to HP Discover it invited a large number of analyst. After the invites were accepted, HP sprung the news that the analysts would have to pay their own way. This not only pissed off the analysts, it pissed off their firms. Now these people are all going to be flying to Las Vegas to attend a customer event and, if asked, they are likely not going to be kind to HP at HP's own event.

At some point, you just have to wonder if the company's plan is to fail because it is actually really hard to imagine any firm being this foolish.

For those of you going to Discover, let's talk about how Dell has prepped the analysts who will be there with you to point out HP's shortcomings.

Dell touts stability and experience

At DAAC, one of the recurring themes was how long the executives that were presenting had been at Dell. The apparent argument is that this extended tenure speaks to how loyal they are to Michael Dell, how experienced they are and how stable their related relationships with customers are. Most of the presenters measured their tenure in decades. In addition, each is effectively a subject matter expert in the area they manage. What customers will hear is that Dell has as a core asset an experienced team of executives who can provide a consistent and stable relationship.

Dell focuses on customers strategically

Another core message from Dell is the advantage of being private. Dell spoke at length on how this gives them the flexibility to innovate and explore new markets because they don't have to fear the adverse impact on quarterly financial statements. This is sharply contrasted with HP's need to dramatically cut costs and employees adversely impacting development, innovation (risk taking) and its ability to pivot to new opportunities.

PCs remain a strategic part of Dell

One of the most pronounced messages was how PCs remain a strategic part of Dell and a core component of their end-to-end market strategy. Dell provided a strong roadmap to the future with details I'm not allowed to share.

In contrast, Whitman has flip-flopped on her plan/promise to keep PCs and now plans to spin them (and printers) out along with most of the company's debt, all but assuring that the divested company will fail. Ironically, at HP PCs have been one of their most successful divisions, but Whitman has decided to renege on her original promise to keep the company together, all of which is in sharp contrast to Dell's message.

Dell has a consistent corporate strategy

The final message that Dell drilled into us was that the company is cohesive. It starts with a corporate strategy that Michael Dell personally shared with the audience. Each division and function then dovetailed underneath.   Particularly exceptional was the Dell investment and M&E organizations, which form a powerful team that helps fund innovative startups and then, if appropriate, husbands them into Dell acquisitions.

Dell's acquisition process is unique in that it identifies the assets that they value and protects them during the process. HP in contrast is more like a group of mini-kingdoms under an empress where the strategy, if it exists, is ad hoc and bottoms up and the acquisition process is comparatively rushed and famous for destroying the companies acquired.

[ Related: Meg Whitman's 4-step guide to killing acquisitions ]

HP remains clueless

So with the IBM piece in 2013, I pointed out that all HP had to do was see what IBM presented and then pivot to address the exposure, but they were apparently unable to do either. Two years later, it is now Dell setting HP up, apparently with HP's own help, and the end result will be a bunch of pissed-off industry analysts primed to look for and write about HP's shortcomings. I expect HP will be as clueless this time as they were last time, but only you folks attending will know for sure.

If you go to HP Discover, drop me a line and let me know if they stepped up this time.


Rob Enderle

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