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What a relief – Hewlett-Packard has decided to keep PCs!

Issue #1120 – After a couple of months of uncertainty, on 27th October Hewlett-Packard’s new CEO, Meg Whitman, announced that the company would, in fact, retain its PC arm, Personal Systems Group (PSG). Why is this significant to the printer division, market and user?

I’m not sure that there was anyone other than then CEO Léo Apotheker who was not horrified at the prospect of Hewlett-Packard spinning off its PC division – Oh, apart from Dell perhaps! The news certainly did not go down well with investors and I got the impression that staff would have quite happily consigned Mr Apotheker to a wooden box.

Meg WhitmanCurrent HP CEO
Meg Whitman

However, big sighs of relief all round, the division is safe (for now, at least). The only victim appears to be the ill-fated TouchPad and mobile phones with WebOS (all of which, incidentally, still feature on the HP web site). And that, in itself, still seems to be a great shame for reasons I will outline in due course.

Although the PC market and printer market are quite different in many of their dynamics, there is, nonetheless, a distinct synergy between them – if for no other reason than they both sit on a network and are, to a degree, interdependent. For Hewlett-Packard, that synergy is much greater than for any other company. As the largest IT company in the world, with the broadest IT product range in the world, Hewlett-Packard can go into a global enterprise and offer just about any IT product and system required to build a global infrastructure – and is able to support that infrastructure on a global basis.

This was part of the reason for the ‘One HP’ concept that was emerging under Léo Apotheker. Sales forces were being merged, allowing one salesman, or sales team, to discuss, configure and sell an entire system – servers, networks, PCs, printers, etc., etc. – a very powerful tool. My understanding is that this concept will continue, which is good news for the company.

It has been speculated that a part of the reason for considering a spin-off for PSG was because the product life cycle of the PC is very short and this was not a comfortable fit with the longer-term cycle Mr Apotheker was comfortable with in the software and services market. It was considered that this makes a unified planning and administration approach difficult across the divisions. Talk about ‘cut off your nose to spite your face’!

Consider this: the printer product life cycle is also short. Not as short – roughly 12 months against four months for PCs but, nevertheless, much shorter than the software and services life cycle. So, if a short cycle gives the executives a headache, but they don’t want to get rid of the imaging and printing division (IPG) as well as the PC division, how about merging the two into one group?

Two divisions sharing a distinct synergy, and understanding one another’s products, cycles, markets and customers, working together with economies of scale that are otherwise unrealisable! After all, one of the reasons for abandoning the PSG spin off was that the company would lose out on its combined buying power and channel influence, so how about extending that power and influence by truly becoming one organisation?

No doubt this would not be welcomed in a number of circles but it should guarantee a better future for the company. Would it become unmanageable? No doubt some would argue, yes. But it’s more a question of a ‘Can do’ attitude rather than ‘Can’t do’, problematic, can’t cope attitude.

What of direct product synergy though? WebOS was being used on the Pre smartphones and the TouchPad tablet PC and there were rumours that it could be integrated with printers and MFPs. Imagine an MFP or printer where your personal smartphone becomes the control panel? With every member of staff in possession of a smartphone and/or TouchPad, the printing device becomes much more secure because it does not need a user interface of its own. Configured specifically for the customer, all the functions could be operated from the remote device (perhaps by BlueTooth so that the printing device can only be operated by users who are within a few metres of the device).

There is a sense in which Hewlett-Packard needs to overcome its impatience and get over its arrogance – the attitude that “If we can’t be number one or two, we won’t play”. This has seen many products invented, built, often launched and then withdrawn – not just talking of the disastrous TouchPad tablet scenario this summer. For instance, there were digital cameras – launched by IPG in 2000 and withdrawn a few years later because they were not commanding a high enough market share, only to be re-launched with video cameras as well as still cameras as part of PSG a couple of years ago but now appearing to be defunct again. There have also been hand-held scanners, vertical see-through scanners, table PCs, MP3 players and many other products that I can’t immediately recall.

HP invent

What Hewlett-Packard needs is to inject some real stability, with a longer-term view of the market and its products and a patience to allow a new product time to achieve acceptance and succeed. After all, it is not so long ago that the company’s tag line was ‘HP INVENT’!

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