HP Combines Printing, Personal Systems Groups

Hewlett-Packard said late last week that it has combined its Imaging and Printing Group (IPG) and Personal Systems Group (PSG) into a single unit and that Duane Zitzner, executive vice president of the PSG, has retired.

The new combined operation now is called the Imaging and Personal Systems Group (IPSG) and is being led by Vyomesh Joshi, who was executive vice president of the IPG.

Joshi is now responsible for HP's imaging and printing business as well as desktop and notebook PCs, handheld products, personal storage appliances and workstations, HP said.

Zitzner, a 15-year HP veteran, could not be reached for comment.

"We are combining these two groups to drive profitable growth, and I have always believed that the channel assets that we have are extremely important to us," Joshi said.

"This will allow me to use all the assets that we have—from product generation to supply chain to go-to-market, and especially the channels that we have—to really figure out the right value proposition for customers," he said.

Some solution providers speculated that the move might have been motivated in part by a desire to mask anemic profits in the PC business. "The question is: Is this move to put the PC group in with the printing business a strategic move to improve business, or is it Wall Street motivated?" asked John Marks, CEO of JDM Infrastructure, an HP solution provider in Rosemont, Ill. "The printing and imaging business has always been a very profitable part of HP's business, while the PC business is obviously not as profitable as shareholders want."

For its 2004 fiscal fourth quarter ended Oct. 31, HP's PSG posted revenue of $6.5 billion with an operating profit of $78 million, its strongest profit performance since 2000. For the same period, IPG also posted revenue of $6.5 billion for the quarter but had an operating profit of $1.1 billion.

Joshi said that HP would continue to break out results for both the PC business and the imaging and printing business even after the two units are combined. "These two businesses are different, and they require focus," he said. "We are going to report both of these businesses to investors."

Combining the groups is "no issue" for Rick Chernick, president of Camera Corner Connecting Point, a solution provider based in Green Bay, Wis. "[Joshi] is very familiar with the channel and very pro-partner," he said.

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