HP Reinvent: Houston, we have a problem

HP's partner conference was a largely positive affair despite one glaring concern, Tom Wright reports

"Times were tough back then, but you trusted us and because you did we're a much stronger company."

It's certainly easier for a CEO to admit that his company went through a tough time once that period is over.

Dion Weisler's comments at the start of his keynote at HP Reinvent in Houston didn't feel like a revelation; more like a quick summary of something that all of the 1,400-plus partners in the auditorium already knew.

It's true that HP got off to a rocky start when the datacentre business spun away, taking with it Hewlett Packard CEO Meg Whitman.

Soon after the separation, the PC arm announced plans to save $1bn, with around 5,000 jobs being cut. A year later it reported a sales decline of six per cent and a net profit slide of 26 per cent.

But in May 2017 HP revealed what Weisler referred to as a "breakthrough quarter", with the vendor's print and PC businesses growing simultaneously.

HP has not looked back since, and its partner conference in Houston last week was built on a feel-good atmosphere (which was just as well, as the event was relatively light on news).

Weisler declared that HP has seen its channel business grow by more than $10bn since 2016. To put this into context, HP reported sales of $58.5bn in its fiscal 2018.

Tuesday's keynote was fairly product-focused, with HP announcing notebook and PC upgrades, a new VR headset, a fabric printer and a new reusable toner cartridge for emerging markets.

The partner mood was buoyant, particularly among those seeing increasing success with device-as-a-service (DaaS). The UK channel base in particular seems to be thriving in this area, with Softcat, Total Computers and DTP among those hosting sessions attended by partners from around the world.

At a press conference following his keynote, Weisler himself even revealed how the European market, and HP's acquisition of UK-based Apogee, is helping to mould its global DaaS and print strategy.

There is, however, a problem.

The recent slide in HP's print supplies business has left a black splodge of toner on an otherwise unblemished report card.

Sales in this segment of HP's business fell three per cent globally in HP's Q1, and nine per cent in EMEA.

Print supplies was not mentioned during the keynote sessions, but was certainly a focus during press briefings.

One of my four one-to-one interviews was specially arranged to discuss the print supplies business.

This interview felt a little scripted and the exec in question, while a very interesting interviewee, had clearly been asked to toe the line with regards to supplies.

The general message was this: customers should be using HP original cartridges because they are more reliable, allow for better-quality printing, and are better for the environment - in terms of both recycling and air quality.

It is surely not a coincidence that HP is deciding to educate its channel on the benefits of its own print supplies over cheaper alternatives, just one month after announcing a slide in its print supplies revenue.

In fact, I have never covered HP's supplies business during my three years at CRN. To my knowledge, we have not even mentioned it in this time.

The seemingly growing market for imitation print supplies is however a concern. The channel can without doubt expect to see HP come down hard on those trading dodgy products, particularly those that infringe its intellectual property, as it tries to protect its own business.

But HP's print business as a whole is certainly enjoying its time in the spotlight.

Print president Enrique Lores, much like Weisler had done before him, said that the print business was in a "bad situation" three years ago and was considered to have "little chance to grow". It now appears to be thriving as partners try to mirror the managed print model for other devices.

As Lores took to the stage after the PC keynotes, he said: "Following Alex [Cho, HP's PC boss] is hard because they have lots of cool stuff. It makes it difficult for the print guys."

This time, the print business certainly stole the show.

Our timeline tracks HP's progress since splitting from HPE