X

HP's killer business PC Rolodex

Hewlett-Packard has a computer hardware business that's second to none. And it's predicated on a long, enviable list of business PC clients.

Brooke Crothers Former CNET contributor
Brooke Crothers writes about mobile computer systems, including laptops, tablets, smartphones: how they define the computing experience and the hardware that makes them tick. He has served as an editor at large at CNET News and a contributing reporter to The New York Times' Bits and Technology sections. His interest in things small began when living in Tokyo in a very small apartment for a very long time.
See full bio
Brooke Crothers
2 min read

Hewlett-Packard has a Rolodex of business PC customers that rivals would kill to have.

Fortunately, Tuesday's news that HP may not spin off its PC business means cooler, wiser heads are prevailing.

HP executives must know the obvious. That Dell, Lenovo, and increasingly Apple are happy to pick off its high-value Fortune 500 customers in the midst of uncertainty. Those are the customers who buy the pricier HP business PCs (EliteBooks, ProBooks etc.) and often purchase the even pricier servers that the PCs are tethered to.

And HP's fast fact page makes the nexus between business PCs and the server side abundantly clear. "We ship 48 million PC units annually...One out of every three servers shipped worldwide is from HP."

Now, let's look at this graphically.

Gartner

Hmm...No.1 in both PCs and servers. Is that sheer coincidence?

I'll make a not-so-bold prediction that if HP goes through the messy process of spinning off PCs, its server business takes a hit. Not to mention the fact that it loses business laptop and desktop clients that it took the company decades to acquire.

IDC analyst Bob O'Donnell says that not only are PCs and servers inextricably linked on the demand side (customers) but on the supply side too. "It's all about buying components in quantity to maintain a price advantage and they lose all of that if they break those two apart," he said.

Maybe former CEO Leo Apotheker's series of bumbling decisions had some positive, however unintended, consequences. They made HP appreciate what it's got: a solid hardware business that's unrivaled in the PC world and, taken together, a cash cow.