With post-merger HP unveiling its new personal systems group (PSG) and imaging and printer group (IPG) management teams last week, full attention now swings to sorting out its channel.
So far, PSG general manager Tony Bill seems to be handling the huge step up in responsibility he has taken on. Just over 12 months ago, Bill was managing the commercial business group of Compaq with perhaps 30 staff under his control and somewhere around $350 million worth of annual sales.
He then managed to survive the union of the consumer and commercial business units at Compaq in April 2001. To get that job, he beat off rival Rob Balmer, who seemed to be the scapegoat for the failed Connect direct retail store strategy. It was a nice step up the corporate ladder.
This appointment was good for the channel because the consumer group was obsessed with the Dell threat and convinced direct sales were the way to go. Bill was the opposite and all that have dealt with him are happy to give him a reference as a staunch channel advocate.
From then on, despite dipping its toes in the direct online sales game, Compaq was regarded by distributors and resellers alike as the best supporter of the channel among the big-name brands. In light of this, there is no surprise for us in the fact that Compaq consistently rated number one in Australian PC sales.
Now Bill is stepping up to the plate of an HP business unit that is probably looking to turn over around $1.2 billion annually and employ about 350- 400 staff, according to sources. That is a big job. He has arrived in the major league and only time will tell if he will be struck out swinging or whether he hits a grand slam homer.
Bill's positive channel attitude is probably a good recipe for HP's personal systems group. If he can unite the marketing savvy of Compaq and the brand recognition and conservative business systems of HP it will be undoubtedly be good for the post-merger company's channel partners, but there are still a number of challenges along the way.
Compaq management in Australia operated in a fairly autonomous manner, whereas under the HP wing they will be under much closer scrutiny from regional headquarters in Singapore. Mistakes, budget misses and communications lapses will be monitored, noted and not tolerated.
Compaq staff may have secured the lion's share of the senior management positions in this country but it will be extremely interesting to see whether the two cultures mix - one born out of Texas in an over-hyped era of growth, and the other originating in California in the far more conservative post-war years.
While Rebekah O'Flaherty, Bill's HP equivalent in IPG, is under the same pressure to perform, she is an ex-HP employee. She therefore understands the culture and has the contacts upstairs. Also, the size of the business she is responsible for hasn't grown so dramatically. I'm told by sources that her business unit is looking to generate about $500 million annually, which is not too much more than it was pre-merger.
It is my understanding that nobody is expecting one plus one to equal two in the post-merger PSG organisation. The sum is expected to total about 1.7 but there will be little time for Bill to ponder the significance of that number. To achieve sales of $1.2 billion he will be relying on his good old friend, the channel, which still needs to be sorted out. The process of mapping, auditing and eventually trimming distributors and tier-one resellers is now under way.
Several key players will be waiting with bated breath to see what the outcome of these processes will be.