HP fights back

The vendor saw a significant drop in profit for the last quarter - 44 per cent, with the the consumer and business PC and printer divisions hardest hit.

New global CEO, Meg Whitman, was frank in her assessment of the result: "For years, we've been really running our business in silos. Pursuant to this agreement that model, we've built some of the biggest franchises in innovation, nevertheless it's as well made us too complex and too slow," Whitman said.

In terms of channel mindset, the company is for all that reeling from the damage former CEO, Leo Apotheker, caused the company following the early termination of the HP tablet and uncertainty over the future of the HP Personal Systems Group business.

Three-part turnaround plan for the company

She outlined a three-part turnaround plan for the company: It will work at fixing its supply chain by making the process more efficient and cutting unnecessary models; It will address what Whitman terms "ongoing problems" with each business unit through investment in innovation as so then as streamlining processes and support services; All things considered, it will aim to better capitalise on the recent dramatic shifts in the industry around Cloud computing, information management and security.

As part of that strategy, HP has announced a new tablet, focused on the enterprise market, to take a second crack at the massive growth mobility market. Tailored for security, productivity and business network compatibility, Whitman claimed this product will differentiate itself by being better at preventing data breaches than the dominant rival, the iPad.

Locally, these strategies will look like a "back to basics" approach, according to HP director of channel sales organisations, PSG, Margrith Appleby.

The market uncertainty around the company

Appleby claimed that in spite of the market uncertainty around the company, HP has not lost channel partners. What it needed to do now, although, was be a stronger presence to them.

"It's about being more proactive," Appleby said. "We've not been as aggressive in going out and engaging with our channel. We've got a vast number of channel partners out there, and they need the support of HP."

Partners can look forward to some 'exciting' product announcements, Appleby added, as HP ramps up its investments in R&D. Furthermore to that, HP's PartnerONE program aims to simplify engagement with the vendor for its partners.

Channel Dynamics director, Moheb Moses, said the problem HP now faces is an "inconsistent business and product strategy", and recovering from that might take longer than HP's board and shareholders either expect or have the patience for.

"This is driven by the quarterly mindset in the US. If you can't achieve something in six months, at the time Wall Street starts to look hard at you, so what you see a lot of vendors doing is 'unnatural acts' at the end of each quarter. That's fine from a revenue point of view nevertheless if often goes completely against strategy."

McIsaac said HP has done a good job in starting the transition to engineer its technology at the same time into a stack, and pointed to the announcements it has made around virtual systems and cloud systems as part of that development. But, the difficulties HP is having with the hardware translates to additional pain points for the partner - highlighting how important it is for HP to accelerate its planned turnaround. "Right now if this client has a failure, guess who is bearing the heat? Channel partners. They sold it, installed it and configured it and it's not working and the customer is very upset, McIsaac said.

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