Speakeasy — Value In the Space Between Analog and Digital: Q&A With Tuan Tran, HP

The Imaging Channel has been closely following HP and carefully analyzing the impact of its re-entry into the copier channel supported by the recent acquisition of the Samsung Print Group. This has been one of the biggest news stories in the channel in the past few years. When we were offered the opportunity to sit down with general manager and global lead of office printing solutions at HP, Tuan Tran, we of course jumped on it. Please join me in the SpeakEasy.

What is your current state of mind?

Optimistic. I think in aggregate, the economy is coming back, and it’s definitely better where it is now versus two years ago.

As an industry, weathering the euro devaluation and the Russian ruble fluctuations has been rough. The euro is recovering, the European markets are coming back. Those are macro trends. The business and the economy feel better.

Closer to home, for office printing, since HP announced the Samsung acquisition we’ve gained a lot of momentum and a lot of new assets. It’s been great to spend a lot of time with the Samsung team in Korea and understand the capabilities. I’m more bullish now than I’ve been ever in terms of the acquisition.

I was at the Samsung Dealer Meeting in April 2017 when you came on stage to talk about the initial transition plan. How are things going?

I think we’re transitioning and getting their business integrated with our business. It takes time — typically when you make an acquisition, you always lose some momentum. The marching orders for my team have been, “One plus one equals two or more.” We don’t want to have dis-synergies in the business. I want both businesses to continue to gain share and continue to gain momentum.

Competitively speaking, we’ve got our new lineup of A3s, we refreshed the LaserJet 600 line, we did a lot with Jet Intelligence over the last two years. We’ve got a really great product line. I feel very good about where we are relative to our competitors. I feel like we have a clear strategy for where we’re going and that we’re driving this acquisition, and that is going to continue to give us momentum. It’s a good time to compete with our friends at Xerox and Lexmark and everybody else.

I had an opportunity to visit the former Samsung Print Group in Korea. Digital City is very impressive — Samsung is a highly innovative company. Are there some specific intellectual property assets that you picked up with this acquisition that you find particularly exciting?

Yes, definitely. First, I’ll just start with the printers. The core electronic set is definitely on the list. Samsung has tremendous foundry capabilities — their ASIC technology is top. To be a printing company, which isn’t considered something very leading edge, and to be partnered with a world-leading ASIC manufacturer is incredibly exciting. Samsung has taken a lot of the intellectual property from their phone technology and brought it into their digital ASICs.

Second, the printing group benefited a lot from the Android development at Samsung. The Smart UX platform Samsung developed is very good [Editor’s note: Read more about the Smart UX in our Analyst Corner blog here].

Third, some of the low-melt toner technology they have is very impressive.

So you have access to some cool new toys, right?

I think that’s one reason why we are so excited about the acquisition. I think we have tremendous scale. In any acquisition you want to start with scale, and then some core technology that you can add scale to. That’s where the synergy happens.

What do you feel is your greatest challenge right now?

I think the greatest challenge surrounds how we can add more value to our business. Our business today is printing and the infrastructure around printing. We have aspirations to be much more than that. We want to go up that stack, to manage printing security, manage and deliver mobility with utilities like Roam and ultimately to move to a business workflow. Those are the natural adjacencies. So, our challenge becomes how to get our organization and our customers to that state. How do we get the sales model, the consulting model, the customization work together to fulfill that? I think as an industry we have talked about it for a decade, but I don’t think we have really wrapped our minds around what it takes to do that.

Long-term, we have got to get there. You can only optimize the infrastructure so much, which serves to minimize cost but doesn’t add value. The biggest long-term challenge is, how do you add value versus being viewed as a cost? That is a challenge for printing in general.

We’ve been writing about the transformative potential of workflow solutions for this channel for almost six years now. I feel like we have only scratched the surface of awareness for it in the imaging channel, though.

When you think about the Total Available Market for printing, or TAM, it is about $100 billion. That’s interesting. But the real TAM, the workflow TAM, is five or six times larger than that, and that is where all the value is. The imaging channel is going to have to take the $100 billion and try to optimize the heck out of that cost. But where is the value there? That strategy is a tough strategy to follow. We are currently seeing the consequences of that strategy at some of our competitors.

I think there is great opportunity in that space between digital and analog workflows. It’s not in replicating the entire back end; it is in the interface and how you present it.

Do you consider your new foray into the copier channel and your quest for market share in the A3 space a challenge?

I feel very bullish about our A3 strategy. I feel very bullish about our A4 strategy. I think in both those segments we have gained share and will continue to gain share, especially with the Samsung acquisition and the assets we acquired with that.

The challenge with the copier channel is that it is a closed channel, based on a service relationship with the customer.

We have spent a lot of time thinking about our value proposition, not only to the end user, but also to the channel partner. Even with the Samsung acquisition and our partnership with Samsung, we did not want to go into this channel with yet another copier. That is not who we are — we make printers with copier functionality.

This was a really important differentiation, because our value proposition to these channel partners centers around three main areas. First there is security, which is IP based. HP has a long, rich history with security technology. Second is affordable color, which is found with our PageWide line. And then last but not least, smart device services, or SDS. [Editor’s note: Read our Analyst Corner coverage of the PageWide launch here and HP’s SDS here.] Sixty percent of a copier’s cost is on service and support. We are making sure that our devices are designed to drive a large portion of their cost. Remote remediation and toner management are big use cases in SDS, and we are seeing 17 to 20 percent savings depending on the partners deploying the HP fleet. That’s our value proposition, which so far is very well received.

I think from a relationship perspective we’ve changed a lot around our service and support model and parts delivery. All of those are fundamentals that you have to have in order to get into this channel and I think we have done a lot of work on that.

What do you see as one of your biggest opportunities right now?

For us there is still a lot of opportunity with the A4 market and the transactional business. It is a business we know very well. I am optimistic about the new technology across our lineup. We have systematically refreshed the low end, midrange and the high end all the way across the board. We basically have a brand-new portfolio.

With the portfolio we have, the market share we already possess and the industry consolidation that is occurring, I see huge opportunities for us to grow our A4 market. And that is something that doesn’t get a lot of attention. We gained two market share points last year; even at our scale those are big numbers.

HP is truly a global company. It becomes really apparent when we start talking about growth.

Right! Think China. The U.S. market might be flat to declining, but our China business this last year had high double-digit growth. That’s crazy. The economy in China, the amount of businesses that are being opened – it’s incredible.

If your employees were to describe you in three words, what do you think those would be?

Hopefully they will say I have clarity and consistency of vision; that I’m a “driver,” meaning I have a vision and I want to go after it; and then I would hope they say compassionate. I believe in being very clear on business objectives and responsibilities, but I also want to have a personal relationship with people, and I try to keep the two separate. Some managers don’t, and I think that is a real challenge, because ultimately you want that personal relationship with your peers, colleagues and your employees.

Last question. If you were stranded on an island and you could have music by only one band or singer with you, who would it be?

This year I had an opportunity to meet my across the board, all-time favorite singer — Keith Urban. It happened to be at an HP event. I am a huge Keith Urban fan!

My kids are also big Keith Urban fans because Keith plays the guitar. He is a phenomenal guitar player! At home, my sons and I listen to him and my kids will play piano and air guitar to his music. I showed a video of that to Keith when we met and he was really laughing. His handlers were telling me “don’t show him the video, we don’t have enough time” – their job is to get you in and get you out. But of course I did.

He is a great musician. You listen to his lyrics, you listen to his guitar, you listen to his riffs — it’s like ooh, that guy has talent!

This article originally appeared in the April 2018 issue of The Imaging Channel.

Patricia Ames is president and senior analyst for BPO Media, which publishes The Imaging Channel and Workflow magazines. As a market analyst and industry consultant, Ames has worked for prominent consulting firms including KPMG and has more than 15 years experience in the imaging industry covering technology and business sectors. Ames has lived and worked in the United States, Southeast Asia and Europe and enjoys being a part of a global industry and community.