HP channel partners react to losses

HP channel partners have spoken to ChannelBiz UK, under condition of anonymity, about the company’s recently posted losses.

Some have said it was “expected” while others now fear the recent announcement will have a “detrimental effect” on their businesses.

Yesterday the technology giant announced losses in all parts of its business except the software sector, recording a huge $6.9 billion loss overall. Falling PC sales coupled by a write-off of Autonomy were blamed, while net revenues for the fourth quarter were down seven percent year on year to $30 billion.

The massive losses have caused a stir in the channel with one partner claiming that there will now be more pressure to sell to try and “recoup a tiny fraction of these huge losses”.

He also claimed that with less money in the pot, training costs would “probably go up, while marketing material will go down”.

“We don’t get enough support as it is and I think this will probably now get worse,” he added.

HP’s disastrous results continued in its Personal Systems group, which saw revenues decline by 14 percent. Similarly, commercial and consumer revenues decreased 13 and 16 percent respectively and desktop and notebook revenues fell by 12 percent.

One reseller was not shocked, telling us his company “knew this was coming”.

This was “not only through not so quiet whisperings, but also because there’s been so much pressure from HP for us to sell, sell, sell”.

“In fact,” the source added, “we’ve never had so much interest about our performance in the last 10 years as we have had the past few months. What HP has to remember is that we’re just tiny cogs in a huge wheel. If it wants us to perform better we need better incentives and much better support”.

It was hoped HP CEO Meg Whitman would be on the road to saving HP after its disastrous flirtation with ex-SAPman Leo Apotheker. However, last quarter the company announced similar losses, while in May the giant announced that it would be axing around 30,000 staff in the near future following trouble with its bottom line.

The cuts are said to affect around eight percent of the company’s workforce with sources claiming that the axe is still grinding and more announcements will come.

“Let’s be honest, HP hasn’t been right for a long time,” one partner said, speaking with ChannelBiz UK. “Job cuts and now these losses aren’t really a surprise given the economic climate”.

“Maybe it should look at cutting down on its partners and really giving those ones who perform year after year more time and special recognition,” the partner added.

Others have blamed the losses and increasing pressure on channel partners as a result of poor decisions from top level management. The latest ruckus about Autonomy is not helping.

Yesterday, HP said in a statement that it was extremely disappointed to find that some former members of Autonomy’s management team used accounting improprieties, misrepresentations and disclosure failures to inflate the underlying financial metrics of the company, prior to Autonomy’s acquisition by HP. However, Autonomy’s founder, Mike Lynch, rejected the claims in an interview with AllThingsD, who said HP’s announcement was totally out of the blue.

One partner was keen to highlight the channel was not to blame.

“We can’t take all the blame, which has come from the top,” one reseller told ChannelBiz UK. “If HP wanted more sales perhaps a management restructure and more help down here would have been better.” Which is precisely what HP is promising to do – though time will tell if its promises come to light.