For far too long, there has been an invisible question mark next to HP’s name. Meg Whitman has successfully erased it.
The company’s decision to combine HP’s PC and printer business means everyone can move on – HP, its customers, its resellers. When, at one point last year, it looked as though the profitable printing and imaging division would be siloed off as HP moved more into software with the purchase of Autonomy, former CEO Leo Apothecker was sending a message to the world. The message was that printing and imaging, while necessary for most companies, is not a strategic IT purchase. No CIO survey I’ve ever seen lists printing and imaging as part of their top priorities, or their priorities in general. To focus on analytics through Autonomy, services through the former EDS unit and hardware through its computing products was in keeping with the zeitgeist. I still think it might have worked, but that’s not the point. What’s important was that HP was making a choice, and ever since Apothecker’s abrupt departure, the company has been left in an uncomfortable limbo.
Whitman has done a 360 on Apothecker’s game plan, but it’s an equally clear choice, and may ultimately make more sense. CIOs and IT managers are not asking for multiple vendor relationships; quite the reverse. As successful as the printing and imaging division might have been on its own, it would have had the effect of suggesting that all those customer relationships were not really valuable to HP’s core mission of inventing valuable solutions to complex business problems.
When CIOs think about the “information” part of their title, they’re probably thinking primarily about what’s resides in data centres and desktops. Yet despite massive digitization of so many processes and files, a lot of corporate information remains on paper, stubbornly refusing to be collected and analyzed in the same way that you might an electronic transaction record. Are you interested in wrestling with big data? Try starting with the bankers boxes that are scattered among dozens of offices in dozens of branch locations. Paper-based data can be just as unstructured in terms of the variety of documents, takes up considerable volume and while it may not be growing at the velocity of e-mail, it shows no signs of slowing down.
Analysts have long suggested that HP’s printing group makes most of its money not through hardware sales but in supplies such as recycling cartridges for toner and ink. But maybe it is data – the information on paper – that has been the biggest contributor to HP’s success in this area, just as the evolution of digital data will determine whether its other divisions flourish or fail. A tier one vendor can’t afford to offer less than everything is customers may want or need, even if CIOs don’t buy everything from the same company. By renewing its commitment to a complete stack of hardware, software and services, HP under Meg Whitman will inspire confidence and trust in the company’s long-term future. It’s like drawing a line in the sand. Or, better yet, putting a promise down on paper.