HP 2011 Annual Report Download - page 15

financing, utility programs and asset recovery services, as well as financial asset management services
for large global and enterprise customers. HPFS also provides an array of specialized financial services
to SMBs and educational and governmental entities. HPFS offers innovative, customized and flexible
alternatives to balance unique customer cash flow, technology obsolescence and capacity needs.
Corporate Investments
Corporate Investments includes business intelligence solutions, HP Labs, webOS software and
certain business incubation projects. Business intelligence solutions enable businesses to standardize on
consistent data management schemes, connect and share data across the enterprise and apply analytics.
This segment also derives revenue from licensing specific HP technology to third parties. In addition,
revenue from the sale of webOS devices was reported as part of this segment prior to the wind down
of the webOS device business in the fourth quarter of fiscal 2011, which negatively impacted segment
net revenue, gross margin and loss from operations as a result of contra revenue associated with sales
incentive programs and expenses related to supplier-related obligations and inventory write downs.
Sales, Marketing and Distribution
We manage our business and report our financial results based on the principal business segments
described above. Our customers are organized by consumer and commercial customer groups, and
distribution is organized by direct and channel. Within the channel, we have various types of partners
that we utilize for various customer groups. The partners include:
• retailers that sell our products to the public through their own physical or Internet stores;
• resellers that sell our products and services, frequently with their own value-added products or
services, to targeted customer groups;
• 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, and often assist us in selling our products and services to clients purchasing their
products;
• systems integrators that provide various levels and kinds of expertise in designing and
implementing custom IT solutions and often partner with our services business to extend their
expertise or influence the sale of our products and services; and
• advisory firms that provide various levels of management and IT consulting, including some
systems integration work, and that typically partner with our services business on client solutions
that require our unique 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 the depth and breadth
of its coverage in addition to efficiencies and productivity gains in both the direct and indirect business.
HP’s Enterprise Sales and Marketing organization (‘‘Enterprise Sales’’) 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
7