by Greg Walters | 8/17/15
The papers are served and signed. Finances and property equally assigned, all “proper” procedures dutifully, if not coldly, have been followed and filed. She said separating was for the best, months after announcing “we’re better together.”
Now comes the hard part. “You take those, I don’t need them. Oh, this is yours. You brought it with you.” Reliving each memory again and again with every packed picture frame — the Christmas trees, fireside chats, corporate presentations — all “tears in the rain.”
Not all spit-ups are the same, indeed this is an atypical separation as both parties retain their last names — “Hewlett” and “Packard.”
The biggest split-up in imaging history is about to take place as HP splices, creating two $55 billion companies, HP Enterprise and HP Inc. HP Inc. will offer PCs and printers with HP Enterprise pitching professional services and everything else. Not since IBM created and then spun Lexmark has there been such a move.
So what does this mean for printers, copiers, and managed print services? In my calculation, HP Inc. could usher in the last “Golden Age” of office print — again.
Here’s my SWOT analysis:
Strengths — Too big to fail
By all indicators, HP Inc. will be a $55 billion corporation with approximately 125,000 employees. Customers will scale from global enterprise to down the street SMB and they have well established channels. They have the largest installed base in the world, an immense sales force and a marketing budget bigger than some companies’ entire revenue — they are the big blue elephant in the boardroom. It takes years to get to market, but once they do, they are a force.
Additionally, as with every great shift, there will be a “honeymoon” period — a time of grace. HP Inc. will make mistakes and miss numbers without much collateral damage. After all, HP Inc. is a “startup”; there are bound to be some bumps along the way.
Also, HP Inc. won’t be supporting other, less profitable divisions, like IPG did in the past, and will be free to kick more budget into R&D. The most unique aspect may be the managed print services play. HP is rolling out the Printelligent model across the country. If any company has the infrastructure and budget to support fleets of service trucks across North America, it is HP Inc. It seems they’ve hired anybody who can spell MPS. The force is numerically daunting.
Weakness — HP is HP
HP’s greatest strength is also their biggest weakness. Any organization of this size suffers from siloed data, slow decision processes, corporate politics and personal agendas. Throw in channel conflict, and HP is right up there with the biggest. It is a story old as time: global presence breeds galactic sluggishness.
Perhaps corporations of the 1970’s and 1980’s could plan in five-year increments, but today’s business client moves at the speed of thought, not paper. Time will tell if the big ship that is HP can maneuver in a more deft manner.
Opportunities — Cannibalize existing laser-engine MIF
Why did Lexmark get out of ink? What makes HP think they can survive or even thrive in ink? In a phrase, machines in field. Imagine how many HP LaserJets are out in the world, placed into corporations simply because they sport the blue “HP” label. What’s stopping HP from converting a fraction of those existing hot-boxes to the cooler, page-wide array ink-sprayers? HP is a trusted name in the world of IT and as MPS drives more print related decisions away from purchasing and facilities, CIOs and IT directors are much less hostile to dropping HPs on the network — just ask them.
This opportunity is huge.
Threats — The world stops printing or Samsung comes calling
Unlikely, but less office print is a reality. It is true, don’t fight it — just look at all the numbers: HP down 5 percent, Xerox down 10 percent, Lexmark off by 3 percent — if people are printing like they did in 1999, they why is there all this red ink? Still, print will be around for a while and as the rate of decline increases, larger, more established entities will survive to pick up the remaining business.
But who is to say it will be HP?
It is a big pill to swallow, but transformation through a purchase is not entirely out of the question. IBM begot Lexmark, Ricoh begot RiKON, what if Canon strikes back, and engages down the merger/takeover path or Samsung gets tired of copying everyone and decides to purchase the whole kit and caboodle? Imagine that. Granted, the more forward-thinking technology companies like Apple wouldn’t touch this segment with a 10-foot long fuser roller, but somebody accustomed to the wonderful world of toner might think, “Buy HP Inc.? What a good idea!” and pull that trigger. Transformation through acquisition is about as likely as IBM getting back into print and offering to buy HP Inc. (doh!)
But what about spinning off the office print and MPS divisions to fund more growth in the large format, digital press realm? HP Inc. CEO Dion Weisler said in an interview, “… there’s more than 50 trillion pages printed every year. Most of those are still printed on old Guttenberg-style type print presses. There is a shift happening from analog printing pages toward digital printing pages, and so we love that business.” It doesn’t sound like office print is in HP Inc.’s direct line of sight.
In the end, it just doesn’t matter. HP Inc. will make a splash and HP MPS will grow, of this I have no doubt. There will be fewer toner knock-offs and less printing but the HP logo will still be worn by two separate companies. Wild.
Greg Walters is an entrepreneur and founder of the notorious destination site TheDeathOfTheCopier, where he comments on all things imaging, the rise of managed services and the advance of business technology. A prolific writer and frequent speaker, Greg shares his passionate, unique – and often provocative – view of technology and people, addressing the impact of digital on 21st century business. His 2014 book, Death Of The Copier, offers a controversial summary of the early days of Managed Print Services and the not-so-distant future of the hard copy industry. Greg currently resides in Oconomowoc, Wis., and is an architect at PDS, focused on building the Infinity “Life Cycle Services – Print & Content” practice. Reach out to Greg at firstname.lastname@example.org.