While most office equipment manufacturers have been hammered in this current business environment, HP’s results tell a different story. Not immune from the impact, but cushioned from some of the cruelest blows, HP’s Q4 is showing what the future might look like. HP gave us an inside look into the year ahead and development plans for the next three to five years during their annual – and this year virtual – Power of Print analyst event. Here are some of the highlights:
Year in review
Tuan Tran, president of Imaging, Printing & Solutions at HP, kicked off the event by recapping 2020. “2020 started out good, but Q2 and Q3 were challenging. In Q4, we’re really seeing the printer market pick up,” said Tran. Even though 2020 was a global dumpster fire, HP’s overall results look a little bit different, gaining five points in market share in their core business, and growing their consumer hardware revenue 21%.
Tran said that print is “resilient” and characterized the post-pandemic recovery as “uneven.” As you’d expect, HP saw a YoY increase in units in the home segment, and a decrease of units in SMB and graphics segments. But when you zoom in on the SMB and graphics segments, it looks like they are making a comeback, with 28% and 64% QoQ growth, respectively.
Subscription success story
HP was proud of the performance of their Instant Ink and Neverstop programs. Instant Ink, the home-delivery supplies subscription, grew by nearly 50% in the last year, jumping from 5 million users to 8 million. This is impressive growth, considering it took HP six years to get to 5 million users. As we embrace (or simply tolerate) the hybrid workplace, we can expect programs like this to continue to build momentum.
Meanwhile, the Neverstop program – think laser technology, cartridge-free, reloadable toner tank – is seeing success in emerging markets like India and China. While HP didn’t provide any details about the number of subscribers or how much revenue the program created, they did say that we should expect to see more Neverstop devices in 2021. The program promises “laser quality print for under 1 cent per page.” While customers can expect to pay more upfront for the cost of the device, they will enjoy a lower cost of print over time.
HP also discussed their recently launched HP+ program. HP+ is billed as a complete printing solution, providing customers with hardware, supplies and services on a contractual basis. Customers who use HP+ will receive an additional year on their warranty, free toner or ink for six months, and access to exclusive features in the HP Smart App.
In a year that seemed more like a decade, there isn’t much that isn’t changing, and that includes technology buyers. According to HP, 92% of buyers prefer to do product research and buy online. The company also found that 70% of companies are undergoing digital transformation.
In order to keep pace with the rapidly changing world, HP had to make some adjustments. In November, HP announced their new channel strategy, introducing the HP Amplified Channel program. The new strategy helps HP meet their customers where they like to shop, with the products that align with their business strategies.
Amplify simplifies the company’s existing channel program, condensing five multitiered segments (MPS/managed services, online marketplaces, platinum/gold/silver/business commercial resellers, retail, and solutions specialists) into two (Synergy and Power). The Synergy path is geared for the majority of partners, with minimal entry requirements and standard benefits. The Power path is built for partners that want to offer managed services and are willing to make a larger investment in HP. Ninety-nine percent of partners have signed up for the Amplify program, with 98% of Power partners agreeing to share their data with HP.
The hybrid workforce
The hybrid workforce is going to be one of the more jarring changes in a post-pandemic world. For decades, work was done in the workplace. But in the not-so-distant future, the workplace will be wherever employees happen to be – the office, Starbucks, their living room, a park … anywhere, really.
To accommodate the hybrid workplace, the company is rolling out HP Workforce Services. The program helps businesses optimize their device placement, optimize workflows, and leverage analytics to measure their performance. There will also be a home-delivery component, so businesses can make sure that home-workers don’t run out of supplies, plus services to distribute workflow automation to wherever work is done – in the office or elsewhere.
Dealing with the changing workplace
We may be slowly returning to a state of normalcy, but the world will never go back to the exact way it was before the pandemic. And, as we have been covering, perhaps the most noticeable differences in the post-pandemic world will be where we work and learn. According to HP, 77% of workers prefer a hybrid working model, and 70% of all workers plan to split their time between working from their home and in the office. They also found that 88% of people think that online learning will be a mainstay in education.
But just because we want to work and learn in different environments, that doesn’t mean we want to completely transform how we work and learn. HP’s research found that 66% of people think that print helps them get their job done better and 87% believe their children enjoy learning more using printed materials. In other words, people still want to print, and HP is happy to oblige them.
The company’s focus is on three segments: home users, SMBs, and enterprises. They will try to woo home users (workers and students) with Envy and OfficeJet devices, HP Smart App, and Instant Ink. HP plans on attracting SMBs with LaserJet hardware devices and using the HP LaserJet Enterprise line along with contractual solutions and services like HP Command Center, Workpath, and the MPS Flexworker 2.0 program.
Despite the pandemic, HP’s print business had a decent year. Wall Street is favoring subscription models and HP is showing why with their Instant Ink successes. HP is also looking to expand their contractual business into the office segments, a formula this channel has heavily relied upon to weather uncertainty. As consumers and businesses continue to evolve rapidly, HP is adjusting their partner plans to ensure they are meeting customers where they shop and providing them with the technology they need to achieve their goals.