Printer Pact: HP Authorizes Dell to Sell Entire Line of HP Printers and Scanners; Relationship Extends HP's Leadership in Commercial Hardcopy Marketplace

Edge: Work-Group Computing Report, July 6, 1998

Hewlett-Packard Company and Dell Computer Corporation Monday announced that HP has authorized Dell to sell HP's entire line of printers and scanners in North America.

The move is part of HP's strategy to supply products where customers want to buy and to maintain the company's position as the world's No. 1 supplier of commercial hardcopy products.

Dell will add the following HP products to its corporate outbound sales distribution: the HP LaserJet 4000, LaserJet 5000, LaserJet 8000 and Color LaserJet 5/5M printers and the HP Network ScanJet 5 scanners. Dell and HP plan to team up to provide these printers and scanners to corporate customers -- the majority of Dell's business is commercial sales -- and to federal-, state- and local-government and educational organizations.

The relationship with Dell was formed as part of HP's on-going focus on customer buying preferences. A growing number of corporate customers are choosing to purchase PCs from direct PC manufacturers such as Dell.

"Dell offers a value proposition that appeals to many customers," said Lee Ray Massey, HP vice president and group marketing manager for HP's LaserJet Solutions Group. "These customers prefer to do business with one company that can meet all their PC and printer requirements. The relationship between HP and Dell allows us to meet these customer needs."

Dell has been selling low-end HP LaserJet and DeskJet printers since 1997. In March of this year, HP initiated a pilot program with Dell's outbound sales force -- which targets corporate customers -- to gauge customer satisfaction. The success of the pilot led to the current relationship and the authorization for Dell to sell the complete line of HP printers.

"Our goal is to realize incremental growth, vs. channel shift, in an increasingly competitive market," said Massey. "HP's focus is customers, and our overriding objective is to sell printing and scanning solutions where corporate customers want to buy them."

"Customers are demanding a more direct relationship with their technology suppliers to decrease costs and increase responsiveness," said Joe Marengi, senior vice president and general manager of Dell's Relationship Group. "Partnering with HP benefits both companies, and, more important, it benefits our mutual customers."

Conventional reseller channels are the dominant suppliers of HP printers, and they will continue to be rewarded and given incentives for creating demand for hardcopy products. HP currently is developing a new Web site specifically for resellers, providing leasing and finance programs to drive sales, implementing new reseller training programs and offering resellers the help of HP hardcopy field specialists.

HP's recent distribution agreements with Ikon and Danka, which moved parts of HP's printer product line into the conventional copier and office-products market, are further examples of HP's evolving channel strategy. The demarcations that once separated channels have begun to blur, and HP is redirecting its sales efforts accordingly.

Ranked No. 125 in the Fortune 500 companies, Dell Computer Corporation is the world's leading direct computer systems company, based on revenues of $13.6 billion for the past four quarters. Dell designs and customizes products and services to end-user requirements, and offers an extensive selection of peripherals and software through the DellWare program. Information on Dell and its products can be obtained through its toll-free number 1-800-388-8542 or by accessing the Dell World Wide Web server at www.dell.com.

HP is the official information-technology hardware and maintenance supplier to the 1998 World Cup soccer tournament.

Hewlett-Packard Company is a leading global provider of computing, Internet and intranet solutions, services, communications products and measurement solutions, all of which are recognized for excellence in quality and support. HP has 125,300 employees and had revenue of $42.9 billion in its 1997 fiscal year.

Information about HP and these products can be found on the World Wide Web at http://www.solutionjet.hp.com/lj8000.>

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