By Andy Slawetsky – HP held an analyst briefing June 14 – 15 at their HQ in Palo Alto, CA to give us an update on What’s Happenin’ and to provide some incite on their strategies and progress as they make their push towards their share of the A3 copier market. It’s hard to believe that this was my first trip to Palo Alto, and HP made it a memorable one.
We arrived Thursday and had a nice networking dinner with HP executives. It was nice to see old friends and to make some new ones! Even a toast to me for my upcoming wedding, thank you!
The next day started bright and early as our small group was whisked off to Bill Hewlett’s actual home and “the garage” where he and Dave Packard built their first invention – the Model 200A audio-oscillator. This garage is credited with being the birthplace of Silicon Valley and while it had passed hands over the years, past CEO Carly Fiorina is credited with getting it back, restoring it and turning it into a museum. Legend has it, the previous owners wouldn’t sell, so Carly visited them personally and negotiated a deal, not taking “no” for an answer. Probably my favorite thing Carly ever did!
Back on the bus, which took us to HP’s HQ in Palo Alto and their customer welcome center – a high end demonstration facility that sits next to Bill and Dave’s offices (which are side-by-side, separated by a shared bathroom). The offices and boardroom where we had our analyst roundtable have been preserved and it was amazing to walk back in time into the place where they launched an empire.
One of the first things we saw was a new virtual reality (VR) demonstration tool HP has developed for the field. It’s designed to allow a customer to put on a headset and almost be in front of the machine. It’s a very interesting way to show the technology in an interactive manner. It will also help sales people stand out and provide another example of how HP is an advanced thinker.
The VR demo tool has a bit of work ahead of it as they’re in the early stages of figuring out all the things they can do with it. I liked how I could see the machine in 3D and it was cool replacing toner and ink cartridges in it and even being able to stick your head into the machine to see it from the inside. It does get a bit shaky if you step or move outside the area you’re supposed to be in, but that’s a quirk they’ll figure out once they work with it more. It was very cool.
Next, we were off to the ink area where HP inkologist Thom Brown gave us an overview of HP’s ink technology and advancements they’ve made. I’ve seen Thom’s ink presentations several times over the years, they’re fascinating and you should check out his series of Youtube videos. Thom told us about the development process for their inks. They have over 100 inks and it takes about three years to develop one and get it ready for the market. He also showed us the difference in materials that is sometimes used in competitive products, pouring “safe” HP ink onto a cotton heart, then ink from a competitive printer. The HP ink ran over the cotton, while the other ink ate right into it, like it was acid.
Thom’s best analogy came at the conclusion of his session when he made his world famous margarita and had a volunteer from the audience make one using “other” ingredients. Thom’s had freshly squeezed lime juice, Patron tequila and agave nectar (it’s chemical traits pair well with the tequila…this is science baby!). Our analyst friend, Val from Gap Intelligence was given her tools – a packet of lime juice, some nasty brand of cheap tequila you never heard of, a packet of Equal brand low-calorie sweetener and a dirty glass. Point taken!
Next, we sat through a session on 3D, which is another area HP is pushing hard in. HP just had a big launch of their new printers across Asia and it’s a market they’re very sure they’re going to be a leader in as it continues to develop. I did see some imaging dealer names on a list of companies reselling these products, so as you move into 3D (if you move into 3D), here’s a company you may want to work with. Brand recognition, industry leading capabilities, what’s not to love?
We were then seated in a common area with the “other” group of analysts/journalists, there to see consumer products, like HP’s wildly successful Sprocket photo printer. If you haven’t seen one, they’re pretty cool; a photo printer small enough to slide in your pocket that uses no ink (is that a Sprocket in your pocket?). When this thing came out, I remember thinking, OK, I’ve seen something like this before. Not quite. This is smaller, super easy to use with an app that lets you customize the photo with text, images (like Snapchat and Instagram), borders, etc. The back of the print also peels off, turning the print into a sticker. They’re a little small, but it’s the trade-off for having something so portable. Check out the video with Anneliese Olson below as she talks about it.
As the father of a 19 and 17-year old, I can tell you this is a home-run. They’re flying off the shelves and I admit I underestimated the potential for this product. Will it save HP? No, but it will put a lot of money in their pocket and continue to build a positive brand experience with a younger generation that is increasingly difficult to build loyalty with.
We sat through several presentations on a variety of great topics, each showcasing HP’s leadership and strength, starting with HP President Enrique Lores, discussing HP’s strategy around security. You’ve probably seen The Wolf videos I’ve posted (here’s one). For those who haven’t, HP has hired Christian Slater as The Wolf, a hacker who comes in through unsecured devices and wreaks major havoc on corporations. The films are vertically oriented and HP will be rolling out many of these over the next several months. They’re awesome and they put the risk of being hacked into perspective in a way that I haven’t seen anywhere. It’s actually pretty terrifying if you think about it.
The security conversation going on in this industry, and in any industry that works with networked devices is incredibly important. I had felt HP’s method around security almost looked like fear-mongering. Has anyone ever heard of a customer that got hacked through their printer? I mentioned this to some HP people and actually, they have customer that happened to. A BIG customer. They assure me, it wasn’t through HP printers, but it played a role in signing the customer. HP has positioned themselves as the most secure printer manufacturer (their words) and with everything going on in cyberland, a lot of people will go with the company they feel offers the best security.
We then heard about recycling and HP’s green story. If I heard correctly, HP has reduced their greenhouse emissions 25% over the last few years. They also announced a new program I love. Haiti still hasn’t recovered from the devastation of the 2010 earthquake. There is no clean drinking water, so everything they drink is from plastic water bottles. It’s a small island and these bottles are piling up and destroying the environment. It’s a huge problem. And, there is very little industry in Haiti and people need jobs. Enter HP, who is now buying recycled plastic bottles from the people in Haiti. These bottles will be turned into ink cartridges, reusing plastic instead of adding more to the planet. Haitians are finding employment through bottle clean-up initiatives, the bottles are being removed from the island and HP gets new cartridges without adding more plastic to the planet. Brilliant!
Anneliese Olson talked about the HP Instant Ink program, and how it’s one of the fastest growing subscription programs there is. This is a great concept, kind of like the Dollar Shave Club for printer ink. You buy an HP inkjet printer, register it and sign up for the program, committing to the number of pages you think you’ll print per month. You pay a monthly fee of only a few dollars and the ink just shows up when you need it. No ordering, no big expensive cartridge (or cartridges) to buy for hundreds of dollars, just a small monthly payment, like your Netflix, Hulu, Pandora, Spotify and everything else you’re signed up for that you probably forgot about. It gives HP a regular cash flow and keeps customers locked into genuine supplies. I asked if we would see this in the office and they say they’ve considered it. I could see it working for low end, out of box laser customers.
Anneliese also talked briefly about something I think is the beginning of a big change in our office world – voice enablement. Just a few months ago, I saw a competitive brand’s dealer put Amazon Alexa on an MFP and run copies through it using voice commands. Anneliese showed a slide with an HP printer tied to a Google Assistant. It also works with Microsoft Cartana. At some point, we’ll walk up to these devices and just say give me 20 prints of the ABC file or, scan and send that document to John Smith and it will just do it. Pretty cool to see this come up. I think voice enablement plays a big part in the office of the future.
There was more on security with a deeper dive, discussing HP’s track record before Tuan Tran then spoke about A3 and their push to get their share. Tuan told us, “Our mission is to drive printing back to growth. That is our number one goal.” Some recent numbers; Tuan shared that HP printers grew 6% YoY, MPS was 2X the industry growth rate and HP A3 products are shipping. He said the Samsung acquisition is on track (that’s all he can STILL say at this point).
We also heard from Mafia Boy, Michael Calce, who gained fame as a teen hacker when he brought down eBay, Amazon, CNN and Dell. He now runs a firm helping businesses like HP stay on top of their security. I asked him if he could hack the new HP printers and he smiled and said he couldn’t answer that, but that he is actively working with HP to make their printers as secure as possible. I didn’t know HP was working with outside consultants on this; it’s a great idea.
Later, our group broke off and we met with several HP executives in Bill and Dave’s actual board room. How cool is that? Lots of great questions from my peers asking about everything from supplies to predictive maintenance to A3 strategy and more. HP has about 500 global partners (dealers) selling the A3 products. They won’t share the US number at the moment. They’re taking their foot off the gas with their recruiting efforts as they gear up with the dealers they’ve signed. That’s not to say they’re not signing anymore, but that’s not their focus now.
They aim to be the dealer’s number two brand. Unlike Samsung, who had their sights set on displacing the main brand, HP is taking a different approach, getting their foot in the door first. In hindsight, I think it’s a better approach. It’s a lot easier to hit for bases than to try to hit home runs every time. The question came up about Samsung’s user interface (UI) and all the work they’ve done on it. Many people think it’s better than the HP UI and the Smart UX platform is something HP may be considering using down the road. We’ll have to see how that plays out. They weren’t commenting but they were very complimentary of the Samsung UI.
HP is spending a lot of energy in making their printers and MFPs more reliable and more serviceable. We saw remote servicing capabilities that were very useful, enabling the technician to turn the device off and on from anywhere, among other things. According to BEI, 20 – 30% of service calls can be avoided by powering the device off and on. How much better is that than having to call your customer to ask them to do it, then read you the codes, or worse, to send a tech out just for that?
This was a quick trip but I had a huge takeaway. This is the third or fourth HP event I’ve attended in the last year. They’re communicating very well and they have a strong message. The security campaign is incredibly powerful and they’re putting themselves in front of customers better than anyone right now. The latest Wolf video debuted at the Cannes Film Festival. The branding they’re doing right now is the best they’ve done in recent memory. Products like the Sprocket help. They’re everywhere. They’re actually a great giveaway for those of you looking for prizes at your customer events, especially if you sell HP printers. They’re they hot product right now and at $129, how can you go wrong?
We’ll see what kind of progress they make with their A3 laser and PageWide (inkjet) products. Starting at zero, their growth numbers should be pretty good for a while. I haven’t tested the laser products but they seem nice. The PageWide are awesome. 80-PPM, whisper quiet, minimal energy consumption…what’s not to love? And, they have the ability to bill customers at different color usage rates, potentially saving them tons. If you print an email all black except for a blue hyperlink, you get charged a lower rate (possibly a black click). That’s huge for customers. Still, they need to beat that “inkjet isn’t for office” mentality that currently dominates our world.
I get the feeling HP is starting to pick up speed. Their messaging was tight, we had lots of access to execs, they were candid and open to listening. Their attitude is a lot different than it used to be in my opinion. Tying the event into the visit to the birthplace of Silicon Valley and holding our meetings in Bill and Dave’s board room was awesome and not by any means subtle. HP reminded us of who started it all. It was a couple of days well spent.