Outlook 2019: HP Looks to the Future
HP’s Three Pillars for Growth in 2019
Held each January in Las Vegas, the annual Consumer Electronics Show (CES) is the Super Bowl of consumer tech, known for highlighting the latest innovations in the ever-evolving consumer tech space. CES 2019 was no exception, encompassing more than 2.9 million square feet of exhibit space and drawing hundreds of thousands of industry insiders to Sin City for a week of cutting-edge technology spanning from 5G and 3D to Artificial Intelligence and self-driving vehicles.
In between the hustle and bustle of the CES exhibits, Keypoint Intelligence was invited to meet with some HP executives at the palatial Aria hotel. During this time, we had the chance to sit down with Tuan Tran, General Manager & Global Head of HP’s Office Printing Solutions Group, to discuss the triumphs and the challenges of the past year and what we should expect from the dominant force in the printing space. Tran highlighted the company’s successes from the previous year (hint: there were many, as 2018 was a great year for HP as a whole) and discussed a challenge or two, before diving headfirst into how the corporate giant plans to bolster the office printing business in the coming year.
|Tuan Tran, General Manager & Global Head of HP’s Office Printing Solutions Group|
2018: A Year of Integration, Growth, and Breakneck Speeds
2018 was a banner year for HP: It completed the integration of the HP and Samsung teams, acquired Apogee to promote further growth in the channel, and showed excellent performance in its MPS, hardware, and supplies businesses.
The biggest, and most obvious, win for HP was bringing Samsung’s printing business fully onboard as part of the HP family. Despite some very minor hiccups in the early days of the transition, Tran considered that a huge win. “Our goals were, of course, preserving share and not losing customers, but also getting Samsung partners to sell HP and vice versa. We got the answers we needed and were able to execute. Not only did we complete the cultural integration of these two companies, but we gained share in A3 and also rolled out an entire product line within the last two years.”
|Comparing FY2017 to FY2018 results, it’s easy to see that HP is poised for growth. Total hardware placements have seen double-digit growth, and supplies revenue is up as well.|
Tran summed up the company’s 2018 performance by saying, “2018 was a great year. We’re scaling and growing our business and showing increased penetration. We’re doing great in MPS and showing top-line and bottom-line growth. HP really overdelivered on its commitments in the past year.” Indeed, HP’s Fiscal Year 2018 results showed that total hardware placements were up 13% year over year, while commercial hardware placements were up a whopping 85%. Supplies revenue was up 8% year over year, while net revenue was up 11% year over year.
When asked what some of the biggest challenges of 2018 were, he jokingly replied, “Lots of travel. And an incredibly fast pace that is certainly not sustainable.” In all seriousness, and Tran’s frequent flyer miles aside, one of the challenges HP faced was the learning curve in discovering what it takes to grow and thrive in the A3 space, where channel partners are the key to success or failure.
For example, in its quest to win the channel, HP worked very hard to develop a framework of tools and a support system for their partners. One such example is HP Smart Device Services (SDS), which is a set of cloud-based tools with device-based sensing capabilities, designed to simplify device management through remote monitoring, troubleshooting, and remediation. HP SDS integrates with all the major MPS management platforms, like MPS Monitor, Print Audit, PrintFleet, FMAudit, and others, letting service providers perform predictive maintenance, reboot devices remotely, and diagnose and fix device issues to reduce downtime and service costs.
“We learned very early on that listening and understanding is key to implementation,” Tran said. “With SDS, we’ve seen through the first five use cases, up to a 20 percent savings in service costs, but many partners had a hard time understanding how to get from here to there. What we found was that each partner had their own individualized process to dispatch a service technician and they weren’t immediately sure how SDS could fit into that process.”
And so, HP realized that by learning to adapt to the channel’s existing processes, it could expect see greater successes. HP built a team to address the questions and concerns around implementation of SDS, visiting 600 partners to observe their process and work with their support people one on one to retrain them on the process. If the partner support personnel were to triage the situation before dispatching a technician, in effect attempting to diagnose and remediate remotely before dispatching a technician, they could see immediate savings and the customers could be back up and running faster.
Poised for (Even More) Growth
HP has a rich heritage of innovation and it’s clear they have no intention of sitting back and letting the rest of the industry pass them by. It’s been more than three years since the split with Hewlett-Packard Enterprise (HPE) in November 2015, and HP Inc. is more nimble, laser-focused on their core (printing and PCs)—and there is employee excitement at every level within the organization. Since separating from HPE, HP’s printing division has redefined print as a category, not only capturing pages from the copier market, but also delivering innovations for home users as well, from voice-activated printing to a new smart home printer. With the right people, products, and purpose, HP is seemingly unstoppable.
|In the years since the separation, HP’s printing business has recalibrated the business, ultimately trending toward growth in all key areas.|
Tran cited three pillars of growth for HP in 2019 and beyond: to continue to build on the strength of their A3 portfolio and win share; to move the focus on device and network security beyond simple awareness and into a key part of the sales process; and develop applications to take workflow to the next level.
Not surprisingly, given the huge level of investments in R&D, HP plans to continue building out its A3 portfolio in a bid to take share from the $55B copier market. HP’s color and monochrome A3 MFP product line, which includes both LaserJet and PageWide models, spans from 22 to 60 ppm. And with the help of its recently expanded network of partners, HP hopes to continue growing market share by delivering greater business efficiency through managed services, building robust and reliable hardware, and using predictive analytics to ensure devices never go down. And of course, HP’s strength in A4 MFPs and printers is undisputed, with the company taking home Keypoint Intelligence’s Pick award for Most Reliable Business Printer/MFP Brand.
Building on this solid foundation of its outstanding hardware, HP also intends to continue focusing on the importance of printer and MFP security. Businesses have long understood the importance of data security and the privacy of sensitive information, but until recent years, many failed to realize that networked print devices could be a weak link in the security chain. “We’ve done a great job of building awareness through partner communications and campaigns, like The Wolf,” Tran said. The company states it has the world’s most secure printers, which include features to automatically protect against, detect, and recover from attacks. Key detection features include HP Sure Start (checks operating code to validate BIOS integrity), whitelisting (checks for authentic, digitally-signed firmware), run-time intrusion detection (monitors memory activity to check for anomalies during operation), and HP Connection Inspector (evaluates outgoing network connections to find suspicious requests), all of which can automatically trigger a self-healing reboot should an issue be discovered. But, because hackers become more sophisticated as time goes on, HP intends to keep updating its offerings and not stop telling the security story until security is an integral part of the sales process and every print decision made.
In terms of software and workflow, HP has understood the power of the connected device for well over a decade. Just as the office has evolved collaborative, flexible, and unbounded by geography, so has the MFP. Tran says the company will continue to focus on using the power of the Internet of Things (IoT), combining smart MFP architecture with cloud-based applications to boost worker productivity and redefine workflow. One such example is how HP Roam can change the way businesses print by allowing users to print from anywhere to just about any device, giving them access to print, not printers.
When asked what other future innovations HP had in store, Tran summed it up succinctly: “Design is the future. Not just smaller and sleeker, but smarter. We’ve learned from our consumer counterparts and adopted technologies that make sense for the office, like the UI and Web connectivity. As an example, voice integration is just beginning. Right now it can be used for accessibility, but it has an opportunity to be a productivity tool. Where we think it’s going to be really powerful is when it becomes an ecosystem and moves from command-based to context-based as part of a workflow.”