Despite the impact of a global economic pressure on the PC industry, senior management at Hewlett-Packard (HP) South Africa has confidence in the domestic market’s ability to withstand pressure and sustain growth.
Thibault Dousson, Country General Manager at HP South Africa, says there has been a general slow down in terms of volume in personal computing sales, but the situation is not critical.
Dousson says ongoing worldwide economic hardship has impacted procurement of ICT and influenced foreign investors.
However, he is not concerned because he believes that this is just another cycle, one that is following the international curb and is reminiscent of previous tough periods experienced by the local IT industry.
“There is still a lot of excitement around product launches and technology …and if you look at the market abroad, you are not looking at double digit figure growth at the moment – particularly when it comes to mainframe equipment and hardware,” he explains.
A closer inspection of HP’s results from the previous fiscal year ended 31 October 2012 corroborates Dousson’s insight into the current state of the PC industry.
According to financial results for its fourth fiscal quarter and full fiscal year ended Oct. 31, 2012, net revenue of $120.4 billion was down 5% from the prior-year period and down 4% when adjusted for the effects of currency.
The company’s fourth Fiscal Quarter 2012 Business Group results showed that:
• Personal Systems revenue was down 14% year over year with a 3.5% operating margin. Commercial revenue decreased 13%, and Consumer revenue declined 16%. Total units were down 12% with both Desktops and Notebooks units down 12%.
• Printing revenue declined 5% year over year with a 17.5% operating margin. Total hardware units were down 20% year over year. Commercial hardware units were down 15% year over year, and Consumer hardware units were down 22% year over year.
• Services revenue declined 6% year over year with a 14.2% operating margin. Technology Services revenue was down 4% year over year, Application and Business Services revenue was down 7% year over year, and IT Outsourcing revenue declined 6% year over year.
• Enterprise Servers, Storage and Networking (ESSN) revenue declined 9% year over year with an 8.3% operating margin. Networking revenue was up 7%, Industry Standard Servers revenue was down 7%, Business Critical Systems revenue was down 25%, and Storage revenue was down 13% year over year.
2012 was a significant year for the company in terms of its HR capacity and capability. By May last year widespread media reports focused on the company’s global redundancy programme and that 8% (approximately 30,000 jobs) of the company’s worldwide workforce would be cut.
In South Africa, Dousson says there have been some changes, with some staff leaving voluntarily and others being redeployed within the company, but, for the most part, the Programme did not impact significantly on the company or its operations.
In January this year, the company announced the appointment of President Ntuli as HP Business Critical Servers (BCS) BU and Sales Manager for the Enterprise Group in South Africa, with immediate effect.
In December 2012 HP South Africa Keith Bothma was appointed as HP Networking BU and sales manager for the Enterprise Group in South Africa.
Bothma has already been acting in this role for the last two months and next to his responsibility to lead the HP Networking team, Keith will also be responsible for leading the Commercial & Public Sector sales team
Despite the volatile market conditions and internal changes within HP, Dousson is quick to point out the company’s dominance in terms of revenue and/or market share across the product markets in which it competes – including PCs, servers, printers and workstations.
Another reason for his optimism is because of the company’s extensive solution delivery strategy in place to build on its existing business in South Africa and in Africa.
This strategy and business model is constructed on three key pillars, including cloud computing, security and information management.
“Our business model is based extensively on a five-to-ten year plan, designed to react and adapt to the market, and covers cloud computing, security and big data. From a big data point of view, the issue is not only acquiring and storing information, but how this data is then used. Being able to provide that solution, that search to help companies use their information will be a huge focus for us going forward,” he adds.
From a cloud strategy point of view, the company has released what it calls HP Converged Cloud. This is standards-based and structured for consistency and choice Dousson explains.
HP’s printing solution silo reflects its growing interest in- and contribution to the cloud, as well as application and management in business.
In terms of security with mobility and cloud, HP says access points are infinite and threats have come more sophisticated and unpredictable. An enterprise can never be completely secure, and hackers will eventually break the locks that have been traditionally relied upon.
The strategy and product road maps falls in line with confirmation by HP’s global CEO, Meg Whitman, that the company is in the initial stages of a turnaround, a process that will take some time.
Whitman was quoted on the New York Times as saying that the company requires four more years to have confidence in itself.
As for HP South Africa, the immediate future looks promising and its leadership is optimistic – particularly as far as meeting the demand within Africa’s rapidly growing technology market is concerned.