by Patricia Ames
In mid-June, HP hosted analysts for the company’s “Power of Print” briefing at their headquarters in Palo Alto, California. In a compact day and a half, discussions touched on the company's growth ambitions in the office printing space, security, A3 and PageWide devices, and some insights on their go-to-market strategies.
There wasn’t much in the form of new announcements, but there was a tour of the HP Garage (very cool for the nerd I can sometimes be – this great article outlines the experience), demos galore, a bunch of (mostly unanswered due to legal restrictions) questions about Samsung - covered in depth by BPO Media here - and a roundtable discussion with HP executives.
The birthplace of HP
Playtime, Geek Edition
Most of the day was spent hands-on with some of HP’s latest innovations including virtual reality, 3D printing and ink science, and also hearing about HP’s efforts in sustainability, consumer products like the Sprocket and security.
Clockwise from top left: VR Jedi Valerie Alde-Hayman of gap Intelligence; Thom Brown, Ink Scientist Extraordinaire; Dr. Tim Weber, Global Head of 3D Printing Materials with the new HP Multi Jet Fusion 3D printer; Security Expert Michael Calce, aka “Mafiaboy.”
After the group presentations, late in the afternoon, a small number of analysts gathered in the hallowed reserve of the original boardroom used by Bill Hewlett and Dave Packard for a 90-minute briefing with key HP executives. Here is what we heard:
Poised for growth in the office space
“We see plenty of growth opportunity in office printing” said Stephan Schmitt, VP, Product Management at HP. Schmitt noted that HP’s venture into A3 gave HP “access to another $55 billion,” and that “by 2020, about 75 percent of all office pages will be in service contracts.” His point? It’s quite simple. HP can grow by as much as the pages they can capture.
So how do they plan on doing it? By evolving their product portfolio that enables users to have access to prints at any time. The company will push to develop products that can connect knowledge workers with information from wherever they are, and also be able to print it — ”which is the preferred means of communication,” according to Schmitt.
Schmitt went on to explain that there are three security considerations that HP needs to focus on: protecting the device, managing the fleet, and establishing the processes to do so. Customers want on-demand access to information — printed and digitally — wherever they are. But, “if you can’t provide secure access to digital information and printing as a part of a workflow, you can’t innovate, or you will expose your business to an enormous amount of challenges and exposure.” He also noted that it is difficult to manage an ecosystem where users have limitless access to printing, especially when print “is not part of the standard IT security infrastructure.”
Part of the problem is a basic issue: it’s a lack of awareness on the customer’s end, which makes life harder on the dealer. HP must figure out a way to get their end customers to understand that you cannot innovate in an insecure environment. But HP does have a few tricks up its sleeve to mitigate the struggles of selling security. To help spread the word, the company has tapped the truly great Christian Slater to star in The Wolf, a vertical-oriented video series that HP hopes will get their customer’s attention on security. If you have not seen it yet, the series has become a frequently viewed guilty pleasure of the BPO Media editorial team and you can view the latest episode here.
Christian Slater will help raise security awareness
But that’s not the only angle HP can work. Older equipment, the company claims, represents an inherent security risk, as older machines can’t offer the latest security, making them more vulnerable than their newer counterparts regardless of how much effort you put into securing them. “They’ll never be as secure as the new machines in ways that are important to customers, and some of the customers are valuing that enough,” said Dave Laing.
Rounding out the security conversation, Laing noted that the company has increased their number of security advisors almost tenfold over the last three years. The success drove the company to push their Security Care Package bundle, which is normally only available through direct channels, to partners. The package, which costs $15,000, can be marked up and sold to end users, which should help drive more security sales in the future for dealers. These types of efforts add value and allow dealers to act as that “trusted advisor” to their clients.
PageWide and A3
It has been four years since HP entered the A4 space with PageWide, and that side of the business has grown by 13 to 16 points — all without hurting their laser share. In fact, both sides of the business grew during that period. This means, Laing explained, “PageWide has not been a competing technology, but rather, an additive technology.”
PageWide owes its success, at least partially, to its money-saving capabilities according to Laing. The device, which can be set to three modes in the driver — general office mode, presentation mode, and accent color mode — can net adopters up to 37 percent in savings. The device has been particularly useful for helping MPS providers retain business. “Defaulting the driver to general office mode saves up to 40 percent,” said Laing, and the accent color mode, which counts small color coverage documents, such as those with a logo or a URL, as a black click, can save customers an additional 7 percent in color costs. “Our teams are showing 20 to 30 percent savings in their RFP by moving to PageWide technology, for the internal color printing that’s defaulted to General Office Mode,” he said. Ultimately, Laing said, “We’re deploying a ratio of anywhere from four to six PageWide color machines to one laser.”
500 Dealer Army
HP has been picky about selecting which dealers they will partner with. “They all have aspirations of carrying HP, and it’s very difficult for us to say no. What we did is we didn’t say no; we said yes, but with a condition,” said Laing. Conditions included a minimum number of machines in the field, an independent service support network, and a demo facility with demo units, among other considerations.
Speaking to their go-to-market strategy, Laing said, “we’re a little over 500 dealers globally now,” noting that HP wants to build from the second vendor position, with ambitions to work their way into the number one slot. “But,” Laing said, “there are some unhappy partners with their current vendors, and we’re having some who are displacing their primary vendor for us … not as much in the U.S. — more in Europe and Asia.”
Laing wouldn’t disclose the number of U.S.-based dealers, but stated that HP is not actively recruiting any more dealers in the U.S. He noted that HP will stick to a “one region, one dealer” paradigm. That, of course, doesn’t mean that if the right opportunity presented itself, that HP wouldn’t add another dealer, but does go to show that HP is confident with the lineup and strategy they’ve got. For now, the company will focus on activating, building sale funnels, and other cultivating activities.
HP was pretty quiet about the Samsung merger, only telling us to expect something in the second half. But there were still some key takeaways. In the future, look for security as a major theme in sales pitches. And if you’re the betting type, maybe it’s the time to go long on HP. Their bullish push in the office space, if successful, will certainly pay off for big gains. And with a retooled salesforce and a well-rounded ink and laser portfolio, HP is in any case battle ready and geared for the fight.