Capellas fails to reassure channel

Mike Capellas, the 'new' Hewlett Packard (HP) president, is adamant that the take-over of Compaq will not harm either companies' channel partners, despite the fact that resellers in the UK have so far been left in the dark.

"It's not a question of conflict," said Capellas at a news conference yesterday. "If you look at both our relationships with our resellers and, over the past four to five months the work that we've both done to drive business through our partners, it has been remarkable. Collectively it will be more efficient.

"Channel partners know that inventory is the enemy and velocity is the friend. We both have the philosophy to drive lower inventories down, which is good news for everyone. We will dramatically simplify the product set. You will see some real improvements."

Capellas further hinted that the 'new' HP would work towards creating a complete system offering that would go through the channel. But channel players in the UK were still getting over the shock of the news and were none the wiser as to where they will stand once the deal is finalised.

A spokesperson for HP reseller Landscape said: "We don't really know much about what is happening. Nobody is sure at the moment. No meetings have been called, and we haven't been given any special information yet."

Hedley Dixon, sales manager at Compaq reseller Sinergie, was similarly bemused by events. "It is difficult to say anything because we haven't been told anything. We are shocked at the news. To my knowledge I thought Compaq was bigger than HP, but that obviously isn't the case," he explained.

Andy Brown, senior analyst at IDC, said: "If I was a smaller channel player, not like the Computacenters and Compunets, then I'd be really confused about what this consolidation means for me.

"It doesn't look good for channel partners unless they are a big player. A lot of resellers were stitched up by Compaq before, and resellers are struggling to prove their value-add as it is. This doesn't make it any easier for them.

"[HP and Compaq] said a lot about costs being cut and inventories being reduced but, of course, those things will happen if you are cutting back on staff numbers and working at making an annual saving of $2.5bn. It's quite obvious that reseller numbers will also be trimmed."

News of the acquisition saw corporate reseller Computacenter's share price rise by seven per cent yesterday, which could be seen as an sign that investors are already looking on the HP deal as an indicator of industry consolidation.