Hurd: ‘We are not going to talk of printers, but printing’

NEW YORK — HP will organize its 2006 strategy according to an operating framework based on targeted growth, efficiency and capital strategy, chief executive Mark Hurd told a meeting of security analysts on Tuesday.

At the heart of the framework is to take cost out of customers’ complicated data centres, deliver better information and to be the best implementer of next generation technology. Besides enterprise, the framework will also focus on mobility computing and printing.

Hurd also charted a new ubiquity-printing model. “We are not going to talk about printers, but printing,” he said.

Hurd admitted that the market still perceives the company as a consumer printer maker. However, he said the printing market stretched over SMB, commercial and graphics market places. The company recently acquired Indigo Digital Press and Scitex, two companies who played in the industrial printing market. “Today, industrial printing is analogue and it is moving to digital and with that it brings a significant aftermarket business,” Hurd said.

Vyomesh Joshi, executive vice-president, Imaging and Printing Group for HP, said the strategy is not to just capture printer unit share but the actual share of pages printed.

For example, the copier market is a US$24 billion market that is declining.  The plan is to have HP laser printers print more of those pages than its competitors.

Joshi said if the company can do this it would mean better profitability.

He added that HP is also going after the marketing collateral, packaging and signage printing which he hopes will drive the very profitable aftermarket consumables business.

Hurd said that by executing on this new operational framework it can help customers cut down on its labour cost in the long run. “We need to eliminate the requirement of labour so that you can automate those processes,” he said.

As with his predecessor, Carly Fiorina, Hurd said HP would continue to advance the company’s adaptive enterprise strategy. The cost of computing is declining and the move away from mainframes towards industry standard computing will continue, he said. HP will build on its servers, blades, storage systems, management software and IT services portfolio to serve those enterprise demands, he said. The overall goal here, he added, is to automate the entire data centre into a 24/7/365, lights-out computing model controlled remotely over blades that is secure and integrated with management software.

In mobility, the company has PC clients, notebooks, handhelds and workstations which are being positioned to be always ready and always on and deliver personalized services.

Hurd said HP is also investing in its sales force. He wants to get HP’s sales organization fully deployed to the appropriate buying points at a lower cost.

The opportunity is huge, he said, with more than 50 million HP printers and 30 million HP PCs shipped just in 2005. “That is an incredible installed base. From where I come from it is mind bogglingly. We have to leverage the installed base,” he said.

As for its indirect business, the only thing Hurd would say was that he wants to align with partners who add value.

“Are we direct or indirect? I do not know what that means,” he said. “We have great partners and we need to leverage them. They give us extended reach and compliment our solutions,” he added.

Hurd continued that he does not want to partner with resellers, who for example, take HP PCs and strip out standard parts replacing them with grey market parts.

Those HP parts are then used for the reseller’s replacement business. Hurd said it is an accountability issue for him.

The partners Hurd wants to support on those who are investing in their business and build on HP content with their own. HP will provide incentives to those partners and bring its own internal compensation down to the channel. “It is really simple: the better your performance, the better money you make.”

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