1. © Copyright 2010 Hewlett-Packard Development Company, L.P. 1 Swati Saxena Senior Research Manager August 27 2010 RESEARCH AND ANALYTICS: AN SMB CASE STUDY AT HP

2. © Copyright 2010 Hewlett-Packard Development Company, L.P. 2 USING CUSTOMER ANALYTICS –Business issue Penetrate a growing business segment Root cause analysis of a problem –Design analytics to leverage all the data sources available Behavioral Social media Primary research –Derive actionable insights Sales, marketing, product development, etc. Targeted marketing Customized solutions

3. © Copyright 2010 Hewlett-Packard Development Company, L.P. 3 DISCUSSION OVERVIEW –Business problem –Analytical approach and process –Insights to action –Challenges

4. © Copyright 2010 Hewlett-Packard Development Company, L.P. 4 BUSINESS PROBLEM © Copyright 2010 Hewlett-Packard Development Company, L.P. 4

5. 5 SMB market has been growing $500 billion market Increasing share of IT spend Increase sales to this segment for HP’s products/services WW SMB IT SPEND 2009, IDC BUSINESS PROBLEM SITUATION

6. © Copyright 2010 Hewlett-Packard Development Company, L.P. 6 OBJECTIVES Develop insights and strategies to generate an increasingly larger share of revenues and product/service sales from our existing customer base Gain a deep understanding of our customers in this segment Apply business and behavioral knowledge to these insights Design the right growth strategy based on customer needs

7. © Copyright 2010 Hewlett-Packard Development Company, L.P. 7 ANALYTICAL APPROACH © Copyright 2010 Hewlett-Packard Development Company, L.P. 7

8. 8 DETERMINE SCOPE –Clearly define problem –Internal client collaboration –Analyze existing data –Identify information gaps –Design analytical approach –Execute Pan HP Strategy EB IPG PSG

9. © Copyright 2010 Hewlett-Packard Development Company, L.P. 9 EVALUATE AVAILABLE CUSTOMER DATA Social media Not Solicited [Communities, Blogs, Social Platforms [Face book, MySpace] Twitter… Behavioral data [Sales, Support Data, Web analytics, …] Insights Action Surveys (Solicited Feedback) THROUGH Secondary data [Analyst reports, external studies] Analyze Customer Data

10. © Copyright 2010 Hewlett-Packard Development Company, L.P. 10 ANALYTICAL PROCESS SMB Insights A holistic approach to defining, identifying, and understanding, the SMB opportunity “Business case”: Market Analysis Analyst research Internal business group research HP opportunity “Business case”: Market Analysis Analyst research Internal business group research HP opportunity “Opportunity Identification” : Behavioral Analysis Data mining –SMB Install base Product purchase analysis Cross sell sensitivity analysis “Opportunity Identification” : Behavioral Analysis Data mining –SMB Install base Product purchase analysis Cross sell sensitivity analysis “Understanding Behavior”: Primary Research Customized online interactive survey Behavior and needs assessment Customer profiles “Understanding Behavior”: Primary Research Customized online interactive survey Behavior and needs assessment Customer profiles

11. © Copyright 2010 Hewlett-Packard Development Company, L.P. 11 MARKET ANALYSIS What is the size of the market? What is the projected growth rate? What is known about the segment? What do they buy? Who are the key competitors? Market analysis involves understanding the customer segment and determining the market opportunity for HP “Business Case” SMB Insights

12. © Copyright 2010 Hewlett-Packard Development Company, L.P. 12 BEHAVIORAL ANALYSIS How many SMB customers do we have in the relevant market? Of these, how many are active? What do they buy from us? Who are the profitable customers? What makes them profitable? How much is our financial opportunity? Behavioral analysis attempts to describe our customer base by aggregating our active customers and analyzing their business and financial attributes “Opportunity Identification” SMB Insights

13. © Copyright 2010 Hewlett-Packard Development Company, L.P. 13 DATA CLEANING AND MINING Identified “active” customers that had at least one transaction in the last x fiscal quarters Gain familiarity with the data and “clean” the data Conduct iterations of analysis to determine how best to group the data Create standard definitions of variables to be used in analysis

14. © Copyright 2010 Hewlett-Packard Development Company, L.P. 14 “SWEET SPOT” OPPORTUNITY IDENTIFICATION Of these active customers only x% transacted with all three BU’s but they represent xx% of the revenue IPG Only EB Only PSG + IPG EB + PSG EB + IPG EB, PSG & IPG PSG Only % SMB Rev Contribution % of SMB Companies BU Combination IPG Only PSG + IPG EB + PSG EB + IPG EB, PSG & IPG PSG Only % SMB Rev Contribution % of SMB Companies BU Combination “Sweet Spot”“” Our data mining analysis estimates a financial impact of $xxx million/yr incremental revenue if we motivate 1% of our active SMB’s in each BU combination to purchase from an additional BU Analysis of our SMB customers revealed that xx% of customers buy from a single HP product family, generating lower average revenue relative to customers that purchase from multiple BUs

15. © Copyright 2010 Hewlett-Packard Development Company, L.P. 15 PRIMARY RESEARCH Is there a desire among our SMB customers to standardize IT purchases primarily with one vendor, and if so, which segments of customers? What impedes customers from buying a wider range of product and services from us? Is there a financial opportunity for HP to move customers to the sweet spot? What is the right strategy to take advantage of this opportunity? What role can marketing play in influencing purchase decisions? Primary research attempts to understand the patterns of behavior unearthed in the data mining effort “Understanding behavior” SMB Insights

16. © Copyright 2010 Hewlett-Packard Development Company, L.P. 16 RESEARCH INSIGHTS PROCESS Business Need Business Need Decision Drivers Decision Drivers Opportunity Areas Opportunity Areas Need to Standardize Robust portfolio Ease of business Addressing needs HP share of wallet Multi-brand customers HP portfolio mix Our primary research findings are articulated using a three step inductive process organizing the findings into key drivers and opportunities that will be used to form our recommended strategy for migrating groups of SMBs into the sweet spot

17. © Copyright 2010 Hewlett-Packard Development Company, L.P. 17 INSIGHTS TO ACTIONS

18. © Copyright 2010 Hewlett-Packard Development Company, L.P. 18 INSIGHTS TO ACTIONS Migration Strategy Migration Strategy Migration Tactics Migration Tactics By company size By industry vertical Marketing’s Influence New HP Solutions Using the insights we recommended strategies for migrating groups of SMBs into the sweet spot. We also identified marketing tactics that can be used to migrate customers. New customer solutions for this market segment were also identified

19. © Copyright 2010 Hewlett-Packard Development Company, L.P. 19 INTERNAL AUDIENCES USING DATA Marketing Product Teams Sales Services Segment Strategy

20. © Copyright 2010 Hewlett-Packard Development Company, L.P. 20 BUSINESS IMPACT –Helped define SMB sales strategy which has been deployed Driving increased revenue and margin –Influenced marketing strategy with a more pan-HP approach Highest performing marketing vehicle

21. © Copyright 2010 Hewlett-Packard Development Company, L.P. 21 © Copyright 2010 Hewlett-Packard Development Company, L.P. CHALLENGES © Copyright 2010 Hewlett-Packard Development Company, L.P. 21

22. © Copyright 2010 Hewlett-Packard Development Company, L.P. 22 CHALLENGES Availability and quality of the data Data Gain Cross-BU consensus on business objectives Decisions With the business groups Credibility Designing relevant in-depth analysis Insights

23. © Copyright 2010 Hewlett-Packard Development Company, L.P. 23 Q&A