HP to keep investing in hot print services market

With more competition entering the managed print services space, HP Co. is vowing to increase investment in its newly formed Managed Enterprise Services business unit.

The services division, which was formed last September, aims at reducing printing and scanning hardware in large and medium-sized enterprise.  The fundamental principal behind HP’s new business unit is to reduce their customers’ device ratio for printing hardware.

But in the longer term, HP is also trying to transform document management, said Bruce Dahlgren, a senior vice-president who heads HP’s global managed enterprise services division. The company looks to do this by integrating scanned documents into other IT systems.

“The multi-function device can become the on-ramp or off-ramp to the network,” said Dahlgren, who is currently in Toronto as part of a worldwide media tour. An example of this is the use of HP software and services to allow a resume to be scanned and then automatically sent to a company’s HR system.

In a nutshell, HP is looking to streamline paper-based processes.

In terms of future investments, while Dahlgren could not speculate about which companies HP has on its radar, he said his division would be “very aggressive” in considering acquisitions and investments to support its managed printing services.

Lloyd Bryant, vice-president and general manager of HP Canada’s imaging and printing unit, said HP is seeing high growth in Canada as well, including heavy interest in the health care and financial services sectors.

Dahlgren said HP’s document management vision will be important to keeping ahead of other managed printing services vendors, including rival Xerox. Analyst firms have HP and Xerox battling it out for the top spot as the number one preferred vendor in managed print services.

But it appears the competition won’t end with Xerox.

Dell Corp. announced Wednesday that it would be taking advantage of last year’s Perot Systems acquisition and enter the managed print services space, but it is unclear whether the company will follow Xerox and HP into the document management services space as well.

Charles King, a principal analyst with Hayward, Calif.-based Pund-IT Research Inc., said that Dell would be entering a sparely crowded, but very lucrative market. He added that even a small market share could generate decent revenues.

King said that Dell may indeed branch into document management and try to deal with the growing amount of printing, imaging, and scanning data.

“The sheer volume of information that businesses are creating, accumulating and storing … continues to increase. That’s not going to slow down,” King said. There will be an increased demand for services to manage those documents, which could blur the line between document digitization and management.

While Dell’s entrance into the space is significant, Dahlgren said it will be difficult for the company to enter the complex managed print services business overnight. He said HP worked on its offering for several years before finally going to the market.

“We have the innovation and control of IT,” Dahlgren said, referring to its portfolio of software and analytics tools that help support the rest of the company’s print services business.

– With files from Agam Shah, IDG News Service (New York Bureau)

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