When HP first announced it was retrenching more than 25,000 staff worldwide and the depth of its financial problems, Nermin Bajric spoke exclusively to the HP PPS South Pacific vice-president, Robert Mesaros. Now, six months later, he and Mesaros met again to discuss what has happened at HP since.
Nermin Bajric (NB): What have been the key highlights for HP printing and personal systems (PPS) group in Australia and New Zealand (A/NZ) since we last met six months ago?
HP PPS South Pacific vice-president, Robert Mesaros (RM): When you and I last spoke we were still at the strategy stage and made a lot of promises. The last six months have been about walking the talk, particularly pertaining to the channel. The big promises were that we are going to simplify our organisation, and take cost out then innovate in our products. We also said we are going to make sure we get back on the front foot and engage the channel more intensely.
From an organisation standpoint, we have almost halved the number of functions and sales forces we have. In addition, where we had the Imaging and Personal Systems groups, we now certainly have one embedded organisation dealing with the channel.
We have invested heavily in training and the training platform. There is now centralised portal which has all the usual assets available in one format.
We have also invested heavily in the engagement piece of the channel. Channel Odyssey (an Asia-Pacific and Japan roadshow impacting 1000 partners) has just concluded; two weeks ago we had over 100 partners here in Sydney in addition to executives and regional managers chatting about product innovation through to the Partner One program.
This new program sits across all business groups and was launched last month by CEO Meg Whitman in the US. It has been simplified and there are no gates to earning commission; it happens from dollar one.
Since you and I last met, we said we would take cost out of our operation and place a large chunk into innovation. You have seen all the product launches, but in my view there have been five or six key products that have opened up new markets for the channel, particularly in the space of mobility.
For example the ElitePad 900, the Envy X2 hybrid device; we have also announced our re-entry into the consumer mobility play. On the printing side there is the OfficeJet Pro X and the OfficeJet Mobile 150 all-in-one mobile printer.
NB: From your perspective, how is the A/NZ personal systems and print market faring?
RM: The overall market is tough in Australia and IDC indicates this. The biggest trend in the PC department has been mobility. The traditional PC has been slow to decline; it is about 15 per cent down year-on-year (YoY) from the top of mind. Tablets, on the other hand, have been booming. If you add traditional PCs with smartphones and tablet, the market is doing okay. The important thing for us is to take an aggressive stance in the mobility space.
Printing is, by and large, chugging okay. It’s flat. It’s a mature category and has been for a long time.
What keeps us honest is how we are tracking versus the market. From a market share point of view, in the South Pacific we have gained market share in PC in three consecutive quarters. In the latest results we have got 24.8 per cent share and we were approximately 20.8 per cent three quarters ago. For printing, there hasn’t been material shift in our share. It is still around 40 per cent for our Inkjet and and 23 per cent for our Laserjet portfolios.
NB: HP has a lot of competitors in the evolving mobility market. What is your current differentiator?
RM: We acknowledge the way products are consumed has changed and we design our products through that perspective. What HP is doing is creating an end-to-end ecosystem; making sure we have the platforms and formats across the spectrum, from an all-in-one desktop to a seven-inch tablet. We didn’t have that 12 months ago and are still on that journey. Towards the end of this year you will see a much more end-to-end product roadmap across all form factors.
One of the big questions is what hybrid will do to mobility. I think the industry is still finding its feet when it comes to form factors and marrying that up to different customers.
The other piece is what I call health and hygiene in foundation, and ensuring HP is in tune with what partners need in order to make business interactions simple.
NB: What is Meg Whitman’s vision for next six to 12 months?
RM: Meg has clearly laid out a charter for the next five years which spells out where we are today and where we want to get to. That’s a global strategy and means different things across the geographies. What is clear is we are continuing down the path of simplifying our organisation internally and bringing us together as one HP. Our strength in the market is pulling the entire end-to-end portfolio where it makes sense, and putting that in front of channel partners and customers simply and effectively.
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NB: When do you anticipate to have simplified to an adequate extent?
RM: It’s a long and evolutionary journey. What we did first was on the front end; people, programs, structures. At the back end, it’s about supply chain, systems, tools, and processes. That will be a multi-year journey. There is no definitive start and end. It’s continual. In terms of A/NZ channel operations, we are a long way into it.
NB: Are you satisfied with your channel ecosystem?
RM: I define coverage in a couple of ways. First is quantity. Do we have the reach and scale we need? Yes. Do we have the quality? that comes down to constant reevaluation. As we have to change, so do our partners. Their business models are continually evolving. We continue to watch that to ensure we have the quantity and quality required.