HP Summit in Boston 3/3

By Steven Swift

1st part, 2nd part.

HP reconfirmed its belief in the robustness of future print revenues, highlighting once again digitisation of publishing, mobile printing and emerging markets as key drivers of growth, which would offset declines in other areas. HP stressed its commitment to MPS, expecting 30% of print to be contractual, vs. 70% which would remain transactional. HP sees a clear migration path for customers, starting with basic MPS (managing existing print environment and optimising over time), and moving up to Complex MPS (involving full, end-to-end optimisation of the print environment). At the bottom end, HP is also aggressively rolling out and expanding its interesting new “Instant Ink” initiative, a form of simple MPS for SOHO and consumer users.

HP admitted that it is not yet the market leader in MPS, but stated a clear commitment to become so within the near future. Some key factors driving this will be renewed emphasis and commitment on strengthening the channel, through two approaches:

1. Enabling partners with their own MPS infrastructure to include HP products and solutions, with support programmes and price discounts
2. Providing HP MPS infrastructure to partners who do not have an MPS capability.

HP recognises that its resources in this area have not been adequate, and has responded by doubling the size of the channel sales force over the last 12 months. This is driving an aggressive expansion of the channel MPS programme, which is now in 23 countries, supported by a strengthened service infrastructure, which recently won a TSIA award.
HP is also supporting its partners with enhanced tools, especially the Smart Decision Suite, and solutions for key vertical markets (e.g. Pharma, Insurance, Banking).

HP is putting a lot of effort into improved support for and management of the channel. This includes building international networks of partners, and a multi-tier approach with Platinum Partners at the top, representing 60% of PPS revenue, supported by individual heat maps and executive sponsors, to drive targeted 10% growth in revenues with HP. There are also incentives for the next tier of Gold Partners to move up to Platinum through growth in skills and revenue, and support programmes for smaller partners, through distributors. Doing business with HP will be made easier by a simplified pricing structure, which will enable 70% of deals to be concluded without HP intervention, with shorter turnaround times for those deals where HP support is required.

Direct sales and service still account for 40% of total HP revenue

Although the channel is the key area of focus for HP Printing and Personal Systems, that does not mean it is abandoning direct sales and service. This still accounts for 40% of total revenue, and is focused on 1300 global accounts, with a heavy emphasis on MPS. These customers will benefit from standardisation of SKUs across the World, together with some SKUs tailored to meet the specific needs of individual regions or countries.  Leading pharma company Merck is one of HP’s global clients, and gave an impressive presentation on its MPS partnership with HP.

As already mentioned, HP has some exciting new developments in products and solutions, which will have to wait for a subsequent article, when these can be made public. In the mean time, one interesting product stat claimed by HP is that it is now, for the first time, global market leader in MFPs as well as printers.