HP's service effort on track, has way to go

Since Carly Fiorina became chairman and chief executive officer of Hewlett-Packard two years ago, the company has embarked on a sweeping transition to evolve from a hardware shop to a company that not only sells products but also offers services to support customers.

During the company's customer event held here this week, HP clients responded to the company's new customer-centric mantra, saying HP is heading in the right direction but still has a lot of work to do.

"I think Sun and IBM are still a little more aggressive about pursuing our business and keeping in contact with us," said Randy Breitfelder, senior systems engineer at Nielsen Media Research Inc.

HP, Sun and IBM compete fiercely in the high-end server market, and Breitfelder finds HP's competitors more attentive to his needs and concerned about keeping him as a customer. Sun and IBM offer Breitfelder more support with products he has already purchased and more services around keeping his technology up to date. Nielsen is in the midst of testing some new hardware running the Unix operating system and received a server from IBM to do benchmark testing trials and compatibility checks.

"We have not seen or heard from HP yet," he said.

Nonetheless, Breitfelder, like many, had good things to say about HP's HP-UX flavor of Unix and voiced his intentions to learn more about the platform and continue his training on it this week.

Another user echoed an appreciation for HP-UX, the company's overall hardware line and its improvement over the last two years in dealing with customers.

"Over the past six years, dealing with HP has been a bit of a roller coaster, but in the last two years they have been much more consistent," said Richard Burns, senior technical analysts at Royal Bank of Canada in Toronto.

HP has been quicker and more reliable with responses from its services arm, providing Burns with consulting around his hardware and software selections. HP has been more responsive and "sympathetic" to Burns' needs in recent years than Sun by allowing his company to pick products from a variety of vendors and then help make them all work together.

"With Sun, they say 'you buy this and this is what you get,'" Burns said.

One of the main points of concern for Burns and his colleagues was that HP continue to evolve its IT resource center (ITRC) Web site, which provides extensive information on technology topics. The ITRC site has been a great tool for customers, according to Burns, but needs to expand further in the near future.

In keeping with customer demands, Ann Livermore, president of HP's services division, talked about the ITRC site and its over 700,000 registered users in a keynote address, saying the company plans to keep the site strong and begin delivering more services via the portal. The company has also devoted additional resources to its online store, speeding shipping times and improving customization options for customers, Livermore said.

"The measurement of how HP is doing comes through the total customer experience," she said, during a speech Wednesday at the conference.

HP has started to tie compensation for its sales force directly to a score taken twice a year as to how the managers respond to customer needs. The speed with which products arrive and sales personnel respond to customer complaints sets a foundation for HP's services arm to then concentrate on product support.

The ongoing changes in HP's customer philosophy appear to be having a positive effect on the company's customer base. Still, some users interviewed during the show voiced concern particularly about pricing on HP's high-end products, including the Superdome server. Many others also complained about the price and performance of the company's storage products.

Other users from Mexico, the United Arab Emirates and several Scandinavian countries complained that HP does not have the complete global support system of an IBM or Sun. HP does not take care of its customers in smaller markets, forcing them to wait long times for products and support services, several users said.

In total, however, customers tended to agree that HP is beginning a push in the right direction as it ups it focus on delivering services via the Web.

"HP has made some mistakes in the past, but I they think they have recognized that and are improving," said one systems administrator from a Michigan-based company that requested anonymity. "Overall, we are satisfied with HP."

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