HP 2008 Annual Report Download - page 14

• distribution partners that supply our solutions to smaller resellers with which we do not have
direct relationships;
• independent distributors that sell our products into geographies or customer segments in which
we have little or no presence;
• original equipment manufacturers (‘‘OEMs’’) that integrate our products with their own
hardware or software and sell the integrated products;
• independent software vendors (‘‘ISVs’’) that provide their clients with specialized software
products, frequently driving sales of additional non-HP products and services, and often assist us
in selling our products and services to clients purchasing their products; and
• systems integrators that provide various levels and kinds of expertise in designing and
implementing custom IT solutions and often partner with HPS to extend their expertise or
influence the sale of our products and services.
The mix of HP’s business by channel or direct sales differs substantially by business and region. We
believe that customer buying patterns and different regional market conditions necessitate sales,
marketing and distribution to be tailored accordingly. HP is focused on driving efficiencies and
productivity gains in both the direct and indirect business.
TSG manages most of our enterprise and public sector customer relationships and also has
primary responsibility for simplifying sales processes across our segments to improve speed and
effectiveness of customer delivery. In this capacity, TSG manages our direct sales for both volume and
value products including industry standard servers products, UNIX↧, enterprise storage and software
and pre-sales technical consultants, as well as our direct distribution activities for commercial products
and go-to-market activities with systems integrators and ISVs. TSG also drives HP’s vertical sales and
marketing approach in the communication, media and entertainment, financial services, manufacturing
and distribution and public sector industries.
PSG manages SMB customer relationships and commercial reseller channels, due largely to the
significant volume of commercial PCs that HP sells through these channels. In addition to commercial
channel relationships, the volume direct organization, which is charged with the management of direct
sales for volume products, is hosted within PSG. In addition, PSG manages direct consumer sales
online through HP Home & Home Office.
IPG manages HP’s overall consumer-related sales and marketing activities, including our annual
consumer product launch for the back-to-school and holiday seasons. IPG also manages consumer
channel relationships with third-party retail locations for imaging and printing products, as well as other
consumer products, including consumer PCs, which provides for a bundled sale opportunity between
PCs and IPG products.
Manufacturing and Materials
We utilize a number of contract manufacturers (‘‘CMs’’) and original design manufacturers
(‘‘ODMs’’) around the world to manufacture HP-designed products. The use of CMs and ODMs is
intended to generate cost efficiencies and reduce time to market for certain HP-designed products.
Third-party OEMs manufacture some products that we purchase and resell under the HP brand. In
addition to our use of CMs and ODMs, we currently manufacture finished products from components
and sub-assemblies that we acquire from a wide range of vendors.
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