HP: We're hurting Dell
Hewlett-Packard says it is displacing Dell Computers from its powerful position in direct sales by luring away its business customers.
HP claimed on Wednesday that larger businesses are increasingly dissatisfied with Dell's sales practices. It cited Dell's warning earlier this week that its first-quarter earnings will be below analyst expectations.
"We are displacing Dell in most of the bigger and strategic accounts," Alberto Bozzo, vice-president of HP's personal systems group, told ZDNet UK at the HP Mobility Summit in San Francisco this week.
"Most of our large customers are dissatisfied customers from Dell. They were dissatisfied with the services that haven't been delivered, delivery times, and with the quality of the product."
HP claimed Dell's shortfall in performance was linked to "fierce competition" in the direct sales space.
"Customers are asking to buy directly from us because of the quality of service of the direct relationship," said Bozzo.
HP is aiming to attract more corporate customers to its direct sales operation.
"There's still a huge global customer list to address -- mainly current IBM and Dell customers," said Bozzo.
HP's revenues grew 6 percent in its last financial quarter, when it recorded net revenue of $22.7bn (£12.1bn). Dell is expected to record between $14.2bn and $14.6bn in revenue for the period ended in April. HP's personal systems group -- which competes directly with Dell -- saw its revenue grow 8 percent year-over-year to $7.4bn in Q1.
Dell declined to comment on HP's claims regarding its revenue, as it is in its "quiet period" ahead of the disclosure of first-quarter results. But Dean Kline, a senior manager PR at Dell, denied it was losing big customers to HP.
"Large business customers, both US-based and globally, continue to turn toward Dell to get the benefits of working directly with Dell as their technology partner," Kline told ZDNet UK by email.
"Data from IDC backs this up. According to IDC results for the fourth quarter in 2005, Dell held a 44.4 percent share of PCs shipped to large business customers (those with greater than 500 employees) in the US, compared to HP’s 21.9 percent. Dell’s share increased +2.4 points year over year and +2.7 points quarter over quarter from Q3’05, while HP’s grew by +1.9 points year over year and +0.8 point quarter over quarter," Kline said.