by John McIntyre | 3/21/16
In the high tech biz, we have become accustomed to observing a new product technology capability debut and swiftly create a tsunami of disruptive change, often resulting in the upending of a long dominant and established product category. The elements in driving this market transformation are often easy to discern; benefits over the more mature technology such as speed, price or operating costs, functionality, usability and durability, among others. In most categories, the advent of a new offering with significant benefits makes choosing the new entry an easy and apparent decision; a “no-brainer” in everyday vernacular.
It doesn’t always play out that way. Since 1998, with the appearance of the HP 2000C, HP has aimed numerous generations of inkjet printers at the B2B or enterprise market segments long dominated by its own LaserJet brand, laser-based printers. While products representing several generations of OfficeJet brand printers have no doubt been successful for HP, selling in the millions of units at least and outselling any competitive inkjet brand in business by far, the company’s quest for the Holy Grail has been to lure its vast number of corporate LaserJet buyers to come over to the inkjet side and purchase HP inkjet-based devices. For most of corporate America however, this hasn’t turned out to be the “no-brainer” decision many expected would occur.
On March 8, HP charged up the laser hill, once again armed with inkjet, but this time it was flying a different battle flag: PageWide, the new brand HP has applied to the successors of the OfficeJet Pro X and Enterprise X classes of inkjet machines the firm debuted several years ago. On an analyst call, HP’s Director of Product Planning for PageWide Larry Tracy was asked the following: “[HP’s] OfficeJet products are great, [HP’s] LaserJet products are great. Where does this PageWide branding fit in and why is it necessary?” Tracy replied “We debated on what to call the page-wide products. We started calling them OfficeJets and frankly, it confused some customers. They thought it was your traditional, inkjet printer that you see in the home or in the small business field.”
In this respect, HP’s various business-class inkjet offerings faced the same difficult-to-surmount competitive wall HP’s LaserJet competitors have confronted for decades. In some ways slugging it out with HP’s LaserJet brand in corporate accounts presented the same challenge that selling against IBM mainframes did back in the day. Not for the faint of heart, mind you, and occasionally quixotic.
Tracy walked analysts through HP’s name-making journey. “We thought about, maybe we should call them LaserJets but they’re different enough from our LaserJets that we couldn’t do that. … [PageWide] works differently, it operates differently and so, we came to the decision after three years of having the Office Jet Pro X and the Enterprise X in the market that this was the best way to do this.”
Rebranding is not something a company accomplishes in a single day with a single announcement – no matter how eventful. It typically takes years, and unspecified marketing dollars, to successfully establish a new brand, so rebranding is not a decision to be made lightly or without cause. HP appears to be “all in” on using PageWide as one pivotal brand for the company’s printing product portfolio, so get used to hearing it.
Is HP really trying to kill the LaserJet and laser printing? Of course not – laser completely dominates most office print and copier page volumes now and for the foreseeable future. HP’s continued efforts to push ink into the office is driven by several strategic drivers:
- HP’s quintessential printer brand, LaserJet, has always been sourced from its OEM partner Canon. As a partnership, however storied, the two companies have always divided up the profit pie to be had selling those printers and supplies – but that pie is shrinking.
- HP, as developer and manufacturer, owns 100 percent of the value chain for its inkjet lines – so (capital investments aside for the moment – which have been considerable) HP gets to keep 100 percent of the profits from its inkjet supplies. The more inkjet pages it owns, the higher its profits.
- HP owns the IP and the much of the development/production assets for inkjet supplies, and leveraging those investment dollars is crucial to the financial health of the new HP Inc. (which absorbed the vast majority of the overall debt load from the former HP when the company split), as it drives page-wide inkjet into growth print markets such as wide-format and commercial printing.
- The consumer inkjet market has collapsed and isn’t going to rebound, so making dollars in inkjet has to come from business and commercial sectors.
- Inkjet, by its nature, is a far simpler and superior technology for executing many color print applications.
- Theoretically, inkjet is usable on more and varied types of media/substrates; laser processes are essentially designed for paper-like media.
- Understanding how to squirt ink and/or other materials is the technological underpinning of the 3D printer business, a growth market.
- HP has likely invested over a billion dollars over the years – and probably a lot more – to get thermal inkjet printing to the highly-developed state represented by the PageWide products. Businesses make investments because they expect to earn an ROI from that expenditure, and HP is doing whatever it can to get the most out of its capital spending dollars; it is Business 101.
The office — only part of the once and future HP printing universe
Why the perpetual preoccupation with securing inkjet’s place in the enterprise printing space? Print. Volumes.
Augmenting the momentum to rebrand and differentiate the page-wide products from HP’s existing printing brands was the recognition that office printing wasn’t the only game in which page-wide products were – or would be – playing. Tracy noted the PageWide brand would be shared with industrial strength products, so the page-wide large format printer is called the Page-Wide XL. “You’ll see the brand not just in the office but throughout our portfolio,” Tracy added. HP highlighted four market categories where PageWide technology is an indispensable, enabling factor in HP’s hard copy future: large-format, 3D, web presses, and business printers. The message is stark and compelling: office printing is only one (even possibly a smaller) part of what HP Inc. is and is going to be.
Accepting that office printing is stagnant at best suggests that HP Inc.’s strategic growth direction is certainly not away from printing, but toward printing in other arenas, primarily commercial – arenas which are growing or where HP PageWide capabilities have the potential to be disruptive and successful. For dealers whose business has been invested in the print/service/supplies model, HP is outlining several critical paths to be considered as prospects for future growth where this same business model will likely migrate and even prosper. HP appears to be betting the farm on it.
In Part 2 of this series we will take a closer look at the new PageWide products.
John McIntyre serves as a senior analyst for BPO Media. With more than 40 years of experience in the printing industry as an analyst, product developer, strategist, and marketer, he has covered the printing and supplies sectors for prominent market research firms such as Lyra Research, InfoTrends, and BIS Strategic Decisions, and served with major OEMs such as Samsung, NEC, ACT, and Diablo Systems/Xerox. McIntyre is the former managing editor of Lyra’s Hard Copy Supplies Journal and has been a popular speaker at industry conferences on key issues such as market and business strategies, distribution channels, supplies channels, and the impact of emerging technologies. McIntyre also served as a member of the IEEE 1680.2 (EPEAT II) standards development committee.
