Hewlett-Packard (HP), which recently regained leadership position in the personal computer market, feels the merging of its printing and PC businesses has been extremely good for its operations. Though the industry has seen a poor 2012-13, the company, which has diversified interests ranging from tablets tocloud services, is extremely bullish about next year.
In an interview to The Hindu, India President of HP’s Printing and Personal Systems Group (PPS), Rajiv Srivastava, spoke on a range of issues. Excerpts:
HP merged its printer unit and PC business last year. How has that turned out ?
It has been extremely good. From a customer perspective, it simplified our structure. Customers were dealing with multiple people in HP for similar products and technology. Now there is one guy who goes to the customer. So it has led to a dramatic simplification in the manner in which HP deals with its customers. The same thing is true for partners as well. . The entire ‘go to market simplification’ has been a terrific boon for us. When you make it so easy, consistent and simplified, it gives you huge amount of operational efficiency.
Secondly, it provides opportunities for partners who are doing one of the two product lines to indulge in the second one and take that to the market. So, logical growth opportunities are getting uncovered just because of this simplification or integration of two business units.
Also, when you become operationally efficient, you expand market reach and the coverage. You free up huge amount of investments too and invest that into R&D, innovation, products and technology for the future.
What are your R&D investment plans?
This industry thrives on innovation. It is always looking for newer, simpler and smarter ways of doing things, and a company which is building better technology is the one which is going to be a survivor. HP has innovation in its DNA.
Just to give you an example, people have been traditionally using huge, bulky laptops, laptops which are very sturdy and very reliable and long lasting but weren’t satisfying the requirements of being smart, stylish, trendy, thin, ultra portable. We came up with a range of ultra books in partnership with Intel. Then, we recognised that mobility is a big driver of the consumption of technology. We came out with hybrid models, devices which have the full functionality of a laptop and with a toggle of a switch the monitor comes out and it becomes just like a tablet. Going one step further, we launched a tablet. Globally, our expenditures for R&D were $3.4 billion in fiscal 2012, $3.3 billion in fiscal 2011 and $3 billion in fiscal 2010.
Do you see ultra-books impacting laptop sales? Also, presently, ultra-books are priced on the premium side. Do you see prices stabilising and ultra-books making inroads into the mass segment?
It is not about ultra-books replacing the traditional laptops. It is about ultra-books supplementing the product range and fulfilling a specific requirement of a customer.
How does one offer these features? It is through a technology which is really differentiated and very high-end. Looking at the type of technology that goes into making the ultra-books, they are bound to be more expensive.
HP entered the tablet PC space recently. Will being such a late entrant prove to be a handicap?
I think we are in the very early days of tablet story right now. At a worldwide level, there are very few companies which are operating in the tablet space. But look at HP’s stand. In my opinion, HP is differentiating itself by providing enterprise class tablets.
They run on the Windows 8 operating system, have touch functionality, and keyboard extension, so you can keep working on it like a normal PC. One device allows the flexibility of operating in office environment and switching out of it to a consumer environment. This is the strategy we have, and we see a good story for our enterprise tablet.
With BYOD (bring your own device) picking up, fims are okay with the idea of letting employees getting their own device. Do you think in such a scenario, where employees have to choose a device, HP will be able to compete against Samsung and Apple?
We live in a world of competition. It is good to have competition. It offers consumers more choices. Competition always helps, the more the better. I am absolutely comfortable with the competitive environment around me right now. But the actual product is just one aspect. There are many other elements that you need to take care of when you are dealing with organisations. You need an understanding of how to deploy applications for a consumer.
HP’s support service network is able to give a lot more services to a consumer. This is a great differentiator. Then you need to cater to entire life cycle of the product.
HP offers diversified IT solutions. What are the focus areas going forward?
One strategy of ours is that we should continue to retain our leadership position.
Secondly, as I have said, the world requires simplicity and cost optimisation. These are the drivers of cloud computing. This will continue to accelerate as we go forward. Cloud requires infrastructure at the back-end. We believe that we have the perfect ingredient to be a best-in-class cloud provider. When a customer deploys cloud, they need devices as well, to use the applications. We believe we have a good cloud story. This is the second piece of our strategy—first is infrastructure and second is cloud.
Thirdly, we have realised the fact that there is a huge amount of migration taking place to data. So we want to be able to manage the requirements of consumers when it comes to data analytics and data structuring. So, if you piece the story together, we have the infrastructure, cloud capabilities, and the software assets to make it easy for customers to structure and analyse data. That is the strategy that HP is playing at right now.
The hardware industry has not had a good year. How will the next year be?
The IT industry has been performing sub-expectations, and the industry did not grow as much as it should have. But going forward, the way we see consumer demand shaping up, we are extremely bullish. We have got huge potential as a country. People have more aspirations and technology is one of the bigger aspirations that people have. In the commercial space, you'll find that companies have to become more efficient to compete. They need to reach newer markets. And technology is a driver for this.
HP has been talking about managed print services (MPS). What scope do you see in the segment?
People don't understand print devices. They have a need to print, and they need to make sure that the cost of printing is kept under check. These two things are driving MPS. A lot of organisations—mid-size and large —will continue to move towards a model of print which instead of owning the devices, is a services-oriented model, where they just have to pay the cost as per usage. It is a very strong portfolio for us. It has been there for last five years. We are finding more and more customers in the mid-to-upper-mid market migrating to this type of usage.