HP leaks reveal tired strategy

For those readers who may not have noticed, I've been away for the last couple of months recuperating from a motorcycle accident. Following two operations, my left arm is healing nicely, thank you -- especially important, since I'm a southpaw.

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Strangely, though, while my physical body was healing I thought maybe my head was left in some sort of post-operative fog, because I had the weirdest feeling I had awoken in the late nineties.

How else to explain the news stories coming out of Hewlett Packard?

According to Cnet  reporters Dawn Kawamoto  and Tom Krazit , HP is planning to modernize its online sales infrastructure and logistics systems in order to create a direct-sales Web site that can compete head-on with Dell. It seems their anonymous source was a member of the board of directors.

What I find amazing is that these high-level plans hatched by the current board of directors -- and, I assume, C-level executives -- come almost ten years after every reporter worth his or her salt filed almost the exact same copy about HP and Compaq.

Ten years later, and it seems HP is still trying to sort the direct versus indirect sales conundrum. And still, HP is "insanely sensitive about its PC strategy to the point that they were willing to break the law," as Josh Greenbaum , principal at Enterprise Applications Consulting , says.

Ten years later, HP is still pursuing a strategy -- dominance in direct sales -- that is as out of date as the systems they intend to revamp.

I may not have an absolute knowledge of what the enterprise buyer wants, but it does seem pretty apparent to me that the PC and its channel, direct or indirect, is irrelevant. Are companies still worried about ticking off the channel by going direct? That train has left the station. The relevant strategy for the new century should be focused on the after market service model. PCs, it is apparent to seemingly everyone but HP, are a commodity. The question is who can do the best job in servicing the hardware, rather than which channel executes the sales order.

"Look at Dell. They don't have the best track record for service," Greenbaum says. In fact, he believes that when it comes to servicing large companies, the promise of an indirect sales model is that it can deliver more personal and localized service.

Frankly, very few companies can boast of the breadth of products that HP has, and yet the products still remain siloed, for the most part. Printers, PCs, servers, and service are all, to all intents and purposes, separate entities within the company.

HP management should be more embarrassed about its need for a "direct sales strategy" than the lame attempts it went about to find the boardroom leaker.

Instead of trying to emulate Dell's online sales genius, HP should be creating and selling a comprehensive hardware and software strategy. Instead of hiring a former Dell executive, as they did earlier this year, they should hire an IBM Global Services guru who knows how to sell the company, not the product.

The real irony is that HP is doing so well in retail and the indirect channel that they may soon overtake Dell in worldwide PC sales. The HP board's paranoid reaction to the disclosure of a stillborn strategy says a lot about an old-school company whose management can't seem to shake off the past.