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HP Will Prey on Disgruntled Customers in Wake of Dell Buyout

By - Source: HP | B 26 comments

HP is going to take advantage of a vulnerable Dell as the rival moves to go private.

On Tuesday after Dell announced that it would be acquired by CEO Michael Dell and global technology investment firm Silver Lake, HP released a short statement saying that the rival PC maker has a very tough road ahead, especially when it comes to retaining customers.

HP would seemingly know all about the "tough road" given all the uncertainty surrounding the company in 2011 after it discontinued selling webOS products and revealed plans to possibly spin off its Personal Systems Group. But HP Meg Whitman said that "a separation would not create incremental shareholder return or customer value". Thus the company went through an "organizational realignment" to improve performance and drive profitable growth across the entire HP portfolio.

Now the struggling PC maker is taking shots at another struggling PC maker that's gone private in a $24.4 billion leveraged buyout deal so that it can restructure and shift its focus to the enterprise sector. Dell may even be able to find its mobile footing so that it can better compete in a growing smartphone and tablet market.

"The company faces an extended period of uncertainty and transition that will not be good for its customers," HP stated. "And with a significant debt load, Dell's ability to invest in new products and services will be extremely limited. Leveraged buyouts tend to leave existing customers and innovation at the curb. We believe Dell's customers will now be eager to explore alternatives, and HP plans to take full advantage of that opportunity."

Ouch. Dell founder and CEO Michael Dell, who invested his own funds and shares into the buyout, sees the change a little differently.

"I believe this transaction will open an exciting new chapter for Dell, our customers and team members," he said. "We can deliver immediate value to stockholders, while we continue the execution of our long-term strategy and focus on delivering best-in-class solutions to our customers as a private enterprise. Dell has made solid progress executing this strategy over the past four years, but we recognize that it will still take more time, investment and patience, and I believe our efforts will be better supported by partnering with Silver Lake in our shared vision."

On Tuesday Dell announced that stockholders will receive $13.65 in cash for each share of Dell common stock they hold, in a transaction valued at approximately $24.4 billion. The buyers will acquire for cash all of the outstanding shares of Dell not held by Michael Dell and "certain other members of management".


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  • 15 Hide
    iknowhowtofixit , February 5, 2013 8:04 PM
    I work closely with HP's distribution chain. They have no room to talk.
  • 13 Hide
    Anonymous , February 5, 2013 8:15 PM
    Why would DELL customers be disgruntled?
Other Comments
  • 15 Hide
    iknowhowtofixit , February 5, 2013 8:04 PM
    I work closely with HP's distribution chain. They have no room to talk.
  • 13 Hide
    Anonymous , February 5, 2013 8:15 PM
    Why would DELL customers be disgruntled?
  • 6 Hide
    antilycus , February 5, 2013 8:16 PM
    to save on their profits, HP used inferior parts in business class equipment. I've had custoemrs loose hundreds of thousands of dollars because they use cheap/eco Seagate drives, horrible raid controllers and borderline stupid bios'. STAY AWAY FROM HP. Dell is STILl the better choice and custom build your own if you can deal with warranty issues (if they even come up). I've built over 75 servers and workstations for customers in 3 years (including businesses as they are my clients) and never once have I had a warranty issue. I uses ASUS Motherboards and Wester Digital drives. PUrchase good equipiment, not cheap equipment.
  • 8 Hide
    jacobdrj , February 5, 2013 8:20 PM
    antilycusto save on their profits, HP used inferior parts in business class equipment. I've had custoemrs loose hundreds of thousands of dollars because they use cheap/eco Seagate drives, horrible raid controllers and borderline stupid bios'. STAY AWAY FROM HP. Dell is STILl the better choice and custom build your own if you can deal with warranty issues (if they even come up). I've built over 75 servers and workstations for customers in 3 years (including businesses as they are my clients) and never once have I had a warranty issue. I uses ASUS Motherboards and Wester Digital drives. PUrchase good equipiment, not cheap equipment.

    Even WD drives have quality problems these days, at least since the floods. There are not 'good' hard drives in the consumer space that can be recommended to my clients in good faith...
  • -5 Hide
    g-unit1111 , February 5, 2013 8:23 PM
    I need a new laptop and I hate Dell - will HP give me a deal on one? :D 
  • 2 Hide
    RealBeast , February 5, 2013 8:29 PM
    The total lack of HP printer drivers for Windows 7, talk about a complete absence of customer service.
  • 3 Hide
    hakesterman , February 5, 2013 8:36 PM
    The PC market is so slow right now that i don't think HP is going to get many new customers. Dell makes great laptops, i have had at least 3 in my life time and never had an issue with them, they run alot cooler than HP laptops and their better built.
  • 1 Hide
    jacobdrj , February 5, 2013 8:59 PM
    hakestermanThe PC market is so slow right now that i don't think HP is going to get many new customers. Dell makes great laptops, i have had at least 3 in my life time and never had an issue with them, they run alot cooler than HP laptops and their better built.

    Their Alienware stuff has serious problems. A customer had to RMA their 17" with SLI 3 times for hardware/driver issues. Ultimately they replaced it (finally) but for a 2000 dollar laptop, that was unacceptable.

    Dell in general... well, I have a consumer grade 11" laptop with an i3. It is ok. Does the job. Wish they had cheaper batteries (their 1st one died in a couple months, but that might just be a glitch). I just feel like their bios are too proprietary...

    Wish we had more options. ASUS seems to be the only vendor I can trust these days...
  • 3 Hide
    blazorthon , February 5, 2013 9:02 PM
    RealBeastThe total lack of HP printer drivers for Windows 7, talk about a complete absence of customer service.


    My somewhat new HP printer has no issues with Windows 7. Are you referring specifically to older printers?
  • 3 Hide
    blazorthon , February 5, 2013 9:03 PM
    jacobdrjEven WD drives have quality problems these days, at least since the floods. There are not 'good' hard drives in the consumer space that can be recommended to my clients in good faith...


    Although expensive, it's my understanding that WD's VelociRaptor drives are still very reliable. I also haven't had issues with any Caviar Reds, granted they aren't very old yet.
  • 6 Hide
    blazorthon , February 5, 2013 9:05 PM
    jacobdrjTheir Alienware stuff has serious problems. A customer had to RMA their 17" with SLI 3 times for hardware/driver issues. Ultimately they replaced it (finally) but for a 2000 dollar laptop, that was unacceptable.Dell in general... well, I have a consumer grade 11" laptop with an i3. It is ok. Does the job. Wish they had cheaper batteries (their 1st one died in a couple months, but that might just be a glitch). I just feel like their bios are too proprietary...Wish we had more options. ASUS seems to be the only vendor I can trust these days...


    Can you distinguish between the issues being hardware or driver issues? If they were hardware issues, then it's Dell's fault AFAIK, but if they were driver issues, would it really be Dell's fault?
  • 3 Hide
    dgingeri , February 5, 2013 10:04 PM
    antilycusto save on their profits, HP used inferior parts in business class equipment. I've had custoemrs loose hundreds of thousands of dollars because they use cheap/eco Seagate drives, horrible raid controllers and borderline stupid bios'. STAY AWAY FROM HP. Dell is STILl the better choice and custom build your own if you can deal with warranty issues (if they even come up). I've built over 75 servers and workstations for customers in 3 years (including businesses as they are my clients) and never once have I had a warranty issue. I uses ASUS Motherboards and Wester Digital drives. PUrchase good equipiment, not cheap equipment.


    I work in a server software test lab, and we have LOTS of hard drives. On the order of a couple thousand. In my experiences, Hitachi, WD, and Seagate have been in a dead heat for reliability. Toshiba trails badly from the other three. At home, I have 12 Seagate drives (4 2TB and 8 1TB) and have had no problems at all. I find Seagate to be equal in reliability and having an advantage due to price.
  • 4 Hide
    dgingeri , February 5, 2013 10:07 PM
    Honestly, Dell will probably gain customers in the long run with this. the board of directors and a shareholders mentality have been holding them back for a long time. This way they'll be able to innovate and reinvest the profits much more easily and move faster than HP ever could, even if they fire their current idiot CEO and get one that knows the business.
  • -2 Hide
    A Bad Day , February 5, 2013 10:16 PM
    dgingeriHonestly, Dell will probably gain customers in the long run with this. the board of directors and a shareholders mentality have been holding them back for a long time. This way they'll be able to innovate and reinvest the profits much more easily and move faster than HP ever could, even if they fire their current idiot CEO and get one that knows the business.


    That's assuming Mr. Dell is competent. There has been privately run businesses that were run into the ground by their own original owners.
  • 6 Hide
    dgingeri , February 5, 2013 10:41 PM
    A Bad DayThat's assuming Mr. Dell is competent. There has been privately run businesses that were run into the ground by their own original owners.


    He made the company into what it was before it went public. I don't think he'll screw it up now. He's one of the most forward looking, competent men in the business.
  • 1 Hide
    Tlight131 , February 5, 2013 11:09 PM
    Michael is buying the company back for that very reason. He was sick of quality cuts they had to make to meet share holder demand ('merricuh!)

    That said i had an overstock dell inspiron that i bough for 160 dollars. She had a sweet celeron 450 single core, 1.8 ghz. I traded an old mac for a gateway with a bad mobo because it had a core 2 quad in it, im using that dell with the quad in it to this day. Not as my main computer, I used it for two years no problem with that processor in it and just replaced it over the holidays.

    HP is a bad company, bad customer service.
  • 1 Hide
    godfather666 , February 5, 2013 11:37 PM
    I agree with those saying this will be good for Dell. No reason for customers do be disgruntled. I wish them luck.
  • 3 Hide
    vengfulr3ap3r , February 5, 2013 11:39 PM
    jacobdrjTheir Alienware stuff has serious problems. A customer had to RMA their 17" with SLI 3 times for hardware/driver issues. Ultimately they replaced it (finally) but for a 2000 dollar laptop, that was unacceptable.Dell in general... well, I have a consumer grade 11" laptop with an i3. It is ok. Does the job. Wish they had cheaper batteries (their 1st one died in a couple months, but that might just be a glitch). I just feel like their bios are too proprietary...Wish we had more options. ASUS seems to be the only vendor I can trust these days...


    I just want to point out that it would be rather impossible for anyone to RMA a m17x (eg 17" alienware) for having that many SLI problems seeing as it only has one GPU bay. It's the m18x (18" alienware) That has that particular capability.

    It really depends on if it was a hardware or a driver issue and I sure hope the tech narrowed it down. If it was a software issue, that's the fault of the GPU manufacture. If the card it's self was defective, and they just recieved a bad batch that also would be considered a fault of the GPU manufacture. Anything more than that and it was dells fault. It really just depends. Saying it was a hardware/driver issue doesn't even come close to narrowing down the meat of the problem and without knowing the problem you can't fault one or the other. for all we know the problem could have been the customers fault.

    Too many unknown's to just blatantly say "alienware sucks and has serious problems because someone somewhere had a hardware/software issue with SLI of all things". That many RMA's either the computer was a lemon, alienwares just suck (Though im sure i'd have read about them having THAT many problems seeing as i have researched alienware recently) or the customer was the problem.
  • 1 Hide
    dgingeri , February 5, 2013 11:49 PM
    tlight131HP is a bad company, bad customer service.


    Amen to that. I bought a high end 27" monitor, the ZR2740w, and had it go bad in less than a week. Traded it for another one, only to have that one die in 4 months. I couldn't swap it at Microcenter the second time, so I called HP. It took 3 calls and over 6 hours before I got to the department that could actually support the monitor. (It's a 'commercial' monitor, BTW, not a 'business' or 'consumer' monitor.) I found out over the next few days that this problem was frequent with the first and second run ZR2740w monitors because of cheap, outsourced, power supplies. The decision to use that power supply supplier probably cost them far more in support costs than they made from that line of monitors.

    The biggest problem with HP, though, is the convoluted support departments. They are hamstrung by the sheer complexity of their system. If they would just put some thought into making their support department make sense, they'd probably cut support costs pretty well and make customers happier. It's just so stupidly set up. That's bad management decisions.

    HP is a bad company, because of bad management.
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