Fiorina Gets Feisty at Gartner EventBy Tom Steinert-Threlkeld | Posted 2002-10-08 Print
Online exclusive: Hewlett-Packard Chairman Carly Fiorina did more than take the stage at ITxpo todayshe took aim at the competition.
LAKE BUENA VISTA, Fla.Merger accomplished, Carly Fiorina is coming out feisty.
In one 45-minute session at a gathering of 6,000 information-technology executives and potential customers, the chairman and CEO of the newly combined Hewlett-Packard and Compaq Computer corporations dissed rivals such as Dell Computer as a mere distribution mechanism, Sun Microsystems and EMC as "stand-alone hot box companies'' and IBM as a company that cares more for its own needs than those of its customers.
Affording her management team a B-plus grade for the way it has absorbed Compaq into Hewlett-Packard, Fiorina showed no fear at the prospect of the industry's star entrepreneur, Michael Dell, now taking aim on the printer market, where HP generates a disproportionate share of its corporate profits.
"The fact that Dell makes an announcement doesn't send us shaking in our boots," she said at the Gartner Symposium and ITxpo here. "Dell has become a channel. They're not a technology company. They're not an R&D company. They're just trying to expand their portfolio.''
In the first nine months of this year, HP's imaging and printing business accounted for $14.7 billion of the company's $54.9 billion in sales. But it's the only really profitable part of the business. As that unit has recorded $2.32 billion of earnings from operations in the first nine months, HP as a whole has recorded just $2.26 billion.
Sensing a possible vulnerability as HP merges with Compaq, Dell recently reached an agreement with Lexmark International to have printers and ink cartridges manufactured under the Dell name.
But Fiorina dismissed the pact as a marketing move, since Dell already sells Lexmark printers, under the Lexmark brand.
"'Dude, you're getting a Lexmark' just doesn't have the same ring,'' said Fiorina, "which is maybe why Michael Dell has decided to private-label printers.''
As HP rolls out 50 new printing products, the company is also investing about $900 million a year in R&D and has, for instance, 100 patents on a sub-$50 printer in its lineup. By contrast, Fiorina asserted, the Lexmark deal shows that Dell is mainly a means of moving products.
"Michael Dell can be a channel of distribution, but that's not the same as being a printer provider," she said.
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