© 2004 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice
Winning and growing
Peter BlackmoreExecutive Vice President Customer Solutions Group
Customer Solutions Group
Customer focus
Simplicity
Growth
• Aligned by customer segment
• One face to the customer
• Power of portfolio leveraged across region and country
• Growth plans by country, by segment, by account
• Managing Director role
• Greater share of wallet from accounts
• Volume direct growth, balanced with strong channel
IT partner for the next generation
A ~$625B CSG opportunityFY03
HP revenue32003
HP share3
$27B
$9B
8.4%
7.6%
03-07CAGR3
10.2%
5.0%
5.1%
5.8% $19BSMB
Enterprise
Public Sector1
FY03addressable
market2
$320B
$118B
$186B
HP strategy tocapture
PortfolioCross-sellUp-sellNew markets% IT spend
1 Public Sector includes government services and administration, defense and security, and education and healthcare2 Source: IPR March 20043 Source: IPR March 2004, CSG estimates
Enterprise + Public Sector addressable market defined as companies with >1,000 employees, SMB 1-999 employees
Segment growth: Enterprise
Network andService Providers
Financial Services Industry
Manufacturing Regional industries
75% of enterprise revenue in FY03
• Network equipment providers
• Service providers • Media & entertainment
• Banking• Payments• Financial markets • Insurance
• Automotive• High tech• Life sciences• Oil & gas• Consumer goods• Aerospace and
defense
• Retail • Utilities • Logistics
Adaptive Enterprise
Unique vertical plus horizontal offerings taken to market with industry expertise
Drive existing horizontal offerings
Examples
Focus on key industries
Enterprise addressable market $320B in 03 and growing at 5.0%
3950
87105
108
125
108860
100
200
300
400
2003 2007
CAGR
$320B
$389B
4.9%
3.8%
6.6% N&SP
Mfg
Regional
WW Enterprise segment
5.8% FSI
HP positioned to win
• HP is Walmart’s technology supplier of the year
• 50% of SAP implementations and 80% of world’s semiconductor fabs run on HP
• 80M people and 35 operators depend on HP OpenCall
• HP powers 100+ stock exchanges and 2 of every 3 credit card transactions
Source: IPR March 2004
Enterprise = companies >1,000 employees
Segment growth: Public SectorK-12
Education
HigherEd.
HealthDefense & Security
Government Services & Admin
Education
• First responder planning & response
• Data/voice interoperability
• Emergency notification
• Military & intelligence
• Treasury, Finance & Taxation
• Case Mgt for Social Services
• Web Services & Portals
Customersegments
• HIS • PACS• Payer Core Systems• .NET Healthcare
• Student info Systems• Enterprise Apps• Education Portal
Solutions
Multi-national
Orgs Federal/National
State/ Local
Healthcare Providers
Healthcare Payers
Life Sciences
Solutiongroups
Vertical solutionportfolio
Unique vertical plus horizontal adaptive enterprise offerings taken to market with industry expertise
Public Sector addressable market $118B in 03 and growing at 5.1%
HP positioned to win• Classroom 2000 in Northern Ireland
• Healthcare Integrated Delivery Network for U.S. Department of Veteran Affairs (one of the largest such networks in existence)
• Over 80% of the U.S. 911 Emergency call centers (Chicago, NYC)
• White House, Kremlin, British Cabinet, Vatican City, United States Postal Service
Plan to accelerate• Improve account coverage
• Enhance market presence• Build critical partnerships
• Strengthen service capabilities
7391
12
1433
37
2003 2007
CAGR5.1%
Government
Healthcare
Education
$118B
$142B
Source: IPR March 2004
Segment growth: SMBCustomer needs Smart Office programs & solutions
Integrated infrastructure• File and Print• Communication & Collaboration• Ready Office• Business Protection• SMB Servers + Storage• Smart Services + SupportJoint offerings with• Microsoft• Intuit• SAPNew offerings to drive growth• Office communications ($4B mkt)*• Security ($5.1B mkt)*
*Source: E-Marketer, In Stat, Forrester, EC Security Briefing; IPR
Reliability“There is enough risk in day to day business…I don’t need technology risk, too.”
Ease of ownershipAllowing daily focus on the business, not the technology
Expertise and supportAddressing gaps in internal staff bandwidthand capabilities
Standardization and integrationEnabling better investment protection and leverage of prior technology purchase decisions
SMB addressable market $186B in 03 and growing at 5.8%
18 22
32 40
3951
50
6047
60
0
100
200
2003 2007
Revenue($B) $233B
500-999
100-499
20-99
5 to 19
1 to 4
$186B
Companysize
HP positioned to win• HP is market leader and growing
1.5x faster than the market (8.4% HP CAGR vs. 5.8% market growth)
Plan to accelerate• Build a world-class, high volume,
closed loop demand generation engine
• Develop partner-sold, partner-delivered HP branded services
• Expand the addressable market with solutions, alliances, new categories
• Be the easiest to partner with
Source: IPR March 2004
Account growth: Sales model to increase share of wallet
SMB
Corp
PublicSector
Corporate accounts• Focus on 107 named accounts –
dedicated CBMs• $11B revenue in top 107, grew by
17% in 1H04• Share of wallet is ~10% – double in
3 yrs
Enterprise Tier I + II • Now extending program with EAMs
for 1700 Enterprise Tier I accounts• Survey of 2500 customers shows HP’s
dramatic improvements from tactical to consultative selling
107
1700
6000
EnterpriseTier I + II
10,000s
Growth by region: EMEAFortress EuropeHP’s formidable footprintEMEA is a $30B region for HP#1 IT vendor, larger than IBM#1 in Total Servers in 24 of 35 countries –
Gained more share than IBM, Sun, Dell 1#1 in Unix (36%), Windows (43%), Linux 1#1 Disk Storage Vendor 2Great Managed Services momentum – Ericsson,
BT, Telecom Italia#1 in all Printer categories 3#1 in all PC categories 4
Plans to drive growth• 45,000 headcount• New managing director role to
leverage power of portfolio• 3 year country growth plans• Leverage strength in target areas
–Network & service provider–Manufacturing–Finance–Public sector–SMB
1 Gartner “Server Market Analysis: EMEA, 4Q03”2 IDC “External Disk Storage Systems Posts Third Consecutive Quarter of Year-on-Year Growth, According to IDC”3 Gartner “Printer and Copier Quarterly Shipments: EMEA, 4Q03”4 IDC “EMEA PC Market Remains Solid in 1Q04, Driven by Increased Corporate Spending and Continued Portable Adoption, IDC Says”
Country growth: HP in China
$1,374$1,582
$1,779$1,759
$2,257$1,986
$3,014
$1,369
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
FY03 FY04 FY05 FY06
Baseline Rev ($M) Growth Plan ($M)
China 3-year growth plan
Reve
nue
($M
)
•33.6% growth Y/Y ahead of 2X market growth goal
•PSG desktops + notebooks growing faster than Dell
•PSG + IPG represent 100% growth Y/Y
Source: HP internal 2Q04 and 1H04 China performance summary
Adaptive Enterprise progress reportFinancial• $7.8 billion in Adaptive Enterprise orders, 3QFY03 –
2QFY04
Customers• Adaptive Enterprise plans for corporate accounts• 300 companies in Agility Assessment benchmark • 150 managed services engagements won
Operational excellence• 6 software and 4 services companies integrated • 150+ new Adaptive Enterprise products and services shipped
CSG plan for breakaway growth
Growthplan
Exploiting keyindustries
Country 3-yearplans
HP grows faster than market
Accountfocus
HP at market growth rate
• Customer focus –organized around segments and industries
• Simplicity – one face to the customer
• Growth – by segment, account, country, partner
Focused on winningand growing