Lenovo launches attack on HP

PC maker Lenovo has begun its assault on HP, taking out the first of many paid advertisements in a bid to woo its rival's channel partners.

The number three PC manufacturer is looking to capitalise on current uncertainty at the global market leader, thanks to numerous CEO changes and the possible sale of HP’s PC business.

Lenovo took a out a double-page ad in CRN this month featuring a letter addressed to the channel in which it repeatedly reiterated its commitment to its partners, saying the company is ‘here to stay’.

It is personally signed off by Australian chief Alan Munro who told CRN resellers were concerned about the future of HP and were moving to Lenovo as a safer option.

“We are committed to the PC segment of the market, we see great opportunities there and for products around the outside, like tablets, mobile phones and workstation servers,” Munro said.

“That’s why you saw a lot of language about commitment. What we’re hearing is our partner community is really concerned about HP’s announcement and what the future holds, and they are looking for vendor partners that are committed.”

Munro confirmed Lenovo had signed up 40 new resellers since the news HP might sell off its PC business surfaced two months ago, though declined to name any. He said end users and not just partners were concerned with the confusion at HP.

“We’ve had a number contact us that have been long-term HP customers who say we need an alternative, the strategy is not what we thought it would be," Munro said.

He cited the recent launch of the Lenovo ThinkPad as a further example of his company’s PC focus.

“I wanted to make sure our partners understood we feel the PC market is a good one to be in. I’ve talked to a lot of partners directly, and it’s all very similar; they are concerned, confused and disappointed because they felt HP’s strategy was strong and now it’s been undermined,” Munro said.

“These partners have been investing time and training going into market with products that have no clear future. For many that’s disappointing and something they’re not happy about.”

Lenovo relaunched its own channel program 18 months ago following a period of strong growth.

“We see a great opportunity going forward, the IDC data shows the tablet market is exploding and the PC market is still a very good one to be in for the future,” Monro said. “That’s our view, apparently HP has a different view, and they don’t think its worth investing in.”

“We’re already the fastest growing PC business in the world, we’re catching up on Dell in second place and we believe we will pass them sometime this year,” he added. “When you look at HP divesting from the tablet business and creating uncertainty around the PC business, clearly that’s a great opportunity for us in the market, and we want to take that opportunity.”

Lenovo’s ad campaign, seen in this month’s CRN, is followed by a one-page effort launched by HP. Devoid of specific references to its PC business, HP’s ad focuses on its security, personality and status as the market leader. Lenovo’s Munro said the advertisement will do nothing to help the company as the external confusion has come from the top.

“I think the partners that I’ve talked to will need more than an ad in a magazine to get recommitted,” he said.

“It’s the uncertainty of the [PC business] announcement that makes it difficult for vendors. It’s important HP realise if vendors are going to recommend products, they need to be sure the products are going to be here in the future.”

HP’s local PC vice president Janice Cox refused to confirm or deny Lenovo’s claims it had seen a number of HP partners defect across. Cox reiterated HP’s public message that the company held the number one position in the market due to its channel.

“HP has the largest network of registered resellers across the country,” she said. “The channel is excited about the prospects of the PC business, excited about the flexibility, innovation and responsiveness a spinoff would offer them.”

Cox brushed away criticisms of the company’s unclear PC strategy, saying its partners trust HP to be ‘open and transparent’. 

“Our partners expect us to evolve. Part of being a market leader in the IT space is about recalibrating when market dynamics and business performance require a different approach or offering and our valued partners recognise and understand this,” she said. “HP will always look to innovate and the PC business continues to be a strong and healthy business, in large part because of the partnerships we have.”

Cox's comments are unlikely to allay the anxieties of HP’s many channel partners still perplexed about the way the company has handled the situation.

Despite the dramatic fall in HP’s share price and the constant speculation about the company losing both customers and partners, Cox said the business was “as strong as it ever was .. and will continue to be.”

Lenovo’s current PC business began life as the result of a merger with IBM’s then-PC arm in 2004. Munro was head of IBM’s Personal Computer Division at the time and said the difference in that sale and HP’s mooted PC spin-off lay in the planning and communication.

“We had about six months to plan the transition to make sure that when we did move to Lenovo we held all our customers and partners together, and they knew what was going on,” Munro said. “We had a long time to manage that, which is very different to the [HP] announcement. There was real certainty with our move.”

Lenovo plans to run more ads over the coming year directly appealing to dissatisfied HP partners.