Hurd pressures HP storage sales team

Hewlett-Packard CEO Mark Hurd says HP needs to invest more in its storage sales organization to boost sales

HP CEO, Mark Hurd's, assessment of his company's storage sales organisation was simple and blunt: "We just don't cover enough accounts." His comments came during a conference call with analysts to discuss HP's latest quarterly earnings.

Sales of storage products grew only 3 per cent during the quarter ended Jan. 31, compared to a year ago, while HP's overall revenue grew 11 per cent, and revenue in the Technology Solutions Group, of which storage is a part, grew 40 per cent.

"We need to drive stronger top line results in the business," Hurd said.

To do that HP will invest in improving sales coverage and hiring more storage sales specialists, he said, as well as better aligning the company with its value added resellers, independent companies that sell HP storage.

In other words, HP has to do a better job of reaching out to customers such as Gary McCready. McCready is a storage manager in the IT department of a major New York area financial institution, which he did not want identified, and a member of Encompass, an HP user group.

Although he frequently receives invitations to HP technical forums or other events surrounding operating systems or servers, McCready sees very few invitations to HP storage events.

"I'm not sure HP is really putting the emphasis on selling storage the same way it puts the emphasis on other areas. I think they figure that storage simply sells itself," he said.

McCready also lamented that HP recently merged its StorageWorks convention into the HP Technology Forum, a show devoted to all HP systems.

In fact, storage doesn't sell itself, principal analyst with The Enderle Group, Rob Enderle, said..

The enterprise storage buyer is a very conservative buyer who makes a decision only after careful consideration, which makes for long sales cycles, Enderle said. "If you don't have enough specialists you are not going to get the business."

More to the point, a storage specialist needs to know about the specific storage issues facing different industries, a storage industry analyst at Forrester Research, Andrew Reichman, said.

Storage needs differ for financial institutions versus health care companies, for example, on what regulations companies had to obey, and the types of software they used, Reichman said.

"It's hard for storage vendors in general, not just HP," he said, but added that some storage vendors were dealing with the challenge. EMC and Hitachi Data Systems, both solely storage vendors, were organised around sales account managers who were supported by sales specialists who could address specific needs in specific industries, Reichman said.

But while Hurd thinks HP's storage sales operation needs attention, it is competitive.

HP ranked second to EMC in storage sales worldwide market share in the third quarter of 2006, according to IDC's latest figures. HP's $US760 million in revenue gave it a 17.6 per cent share, while EMC's $US927 million gave it a 21.4 per cent share.

But HP actually lost market share to EMC that quarter as its sales grew by only 1.8 per cent, compared to the year ago quarter, while EMC's grew 18 per cent.

HP has a chance to improve its sales if it takes some simple advice from customers such as McCready: Call me.

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Robert Mullins

IDG News Service
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