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HP woos Dell customers with warning private rival will stagnate

05 Feb 2013
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HP has moved quickly to cast doubt on Dell's $24.4bn buyout plans to try and spook customers concerned by the deal and tempt them to its offerings instead.

The move had been on the cards for a few weeks but was confirmed on Tuesday, with founder Michael Dell himself paying out to buy back his own firm, and Microsoft putting up $2bn in a loan offering too.

The move should help buy Dell time in the PC market by removing shareholder pressure and giving it more time to innovative.

However, HP has sought to capitalise on any customers concerned by the move, attempting to lure them to its products and services as it too faces a long slog to return to the top of the market.

"Dell has a very tough road ahead. The company faces an extended period of uncertainty and transition that will not be good for its customers. And with a significant debt load, Dell's ability to invest in new products and services will be extremely limited," it said.

"Leveraged buyouts tend to leave existing customers and innovation at the curb. We believe Dell's customers will now be eager to explore alternatives, and HP plans to take full advantage of that opportunity."

Carter Lusher, chief IT analyst at Ovum, said while Dell's move makes sense in the long run, HP's scaremongering could work as Dell's changes would not be straight forward.

"While the company might come out of this transition stronger with a product lineup that better meets the needs of businesses and public sector organisations, there will be uncertainty as to what products and services stay, get strengthened, or get eliminated," he said.

"Ovum sees effective communication to prospects and customers about its strategy and product roadmap as a, if not the, critical success factor to get through the transition. While this might sound simple it is not."

As such he recommended that any chief information officers using Dell put plans in place in case any hardware, software, and services shifts by Dell require changes to procurement plans.

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Dan Worth
About

Dan Worth is the news editor for V3 having first joined the site as a reporter in November 2009. He specialises in a raft of areas including fixed and mobile telecoms, data protection, social media and government IT. Before joining V3 Dan covered communications technology, data handling and resilience in the emergency services sector on the BAPCO Journal

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