CRN Exclusive: HP CEO Weisler On The HP Split Anniversary, The Acquisition of Samsung's Printer Business And 2017 Outlook

One Year In

HP Inc. CEO Dion Weisler, who has been the driving force behind an innovation renaissance at the company, spoke with CRN about the one-year anniversary of the historic split from Hewlett Packard Enterprise and the 2017 outlook.

Since the split last year, HP has accelerated the pace of innovation with its entry into the 3-D production manufacturing market and the copier replacement market with a portfolio of new A3 printers.

In addition, HP has captured share against Apple in the premium mobility market with products like the industry's thinnest laptop the HP Spectre and broke new ground with the HP Elite x3 – a Windows 10 three in one device that eliminates the need to switch between smartphones, laptops and desktops.

Weisler spoke with CRN on the eve of the one-year anniversary of the official split from Hewlett Packard Enterprise.

What does the one-year anniversary mean to you as the CEO of HP Inc?

I couldn't be more proud of leading a team that I think has just done an exceptional job of transforming our business and reinventing almost every aspect of what we have been doing.

I think separation took us from a partner centric model to a partner led model. Indeed, the separation wouldn't have happened without the amazing support of our channel.

Even before we started the process, we had the Navigator program (to assure partners would not be disrupted by the split) where our partners held our hand effectively and said – 'we will not drop the ball on a single customer.' And it has been that journey ever since.

What has been the impact of the split on the organization?

I think all of the promises of separation in terms of being a more flexible organization, a more focused organization, nimbler, faster, listening to our partners and making our products and services and programs more relevant to them has been quite simply stunning.

The channel has rewarded us in that not only in sort of the hard Net Promoter score differences we have seen but also in the way that they have rallied behind the initiatives we have been running, flocking towards the innovation engine that is absolutely cranking inside this place and getting behind our products and services all the way up to Canalys recognizing as number one in channel satisfaction in EMEA (Europe Middle East Africa).

Everywhere across the organization there has been a focus on being a partner led organization and leveraging separation to embrace change and turn it into opportunity has been pretty stunning.

What would the state of HP Inc. without the split?

We were always a very partner led organization and within the DNA of both companies today is the partner community that got us to the point of enabling the separation. I think what would have happened is: we would have continued to raise our game and focus on our partners, but we wouldn't have got as much done as we got done.

The work that (HP Head of Global Sales Strategy and Operations) Jos (Brenkel) (pictured) has been doing with our partner community and with our partner and customer advisory boards has been critical.

Digitizing the engagement, we have with partners wouldn't have happened at the pace that we have driven it without the split. There are new systems that we have deployed that enable partners to act more seamlessly with us.

What impact has the split had on new market opportunities like the A3 PageWide printer launch?

That's a $55 billion market where we made a significant acquisition of Samsung's printer business. I am almost certain that acquisition wouldn't have happened in the old organization- there are just too many folks competing for very few precious dollars.

The work that we have done around 3D printing is a disruption of the $12 trillion-dollar manufacturing industry and the work around commercial mobility are all things that wouldn't have happened at the same clip or not at all if we hadn't separated.

How important is the $1 billion acquisition of Samsung's printer business?

It's super important. As you know we operate in mature categories as does most of our channel partners. We have to be excellent in our core. We have to run faster than the competition. We have to have sprinkles of magic in our products every single day. And when we do that we should take our unfair share of those markets that are very mature.

But we need to have a growth thesis for the organization and A3 printing is a very big part of that. It is a $55 billion market where today we are largely under-penetrated. We have less than four percent market share there.

What we have now with the Samsung printer business is 6,500 patents, more than 1,300 unbelievable world class R&D engineers along with the rest of the Samsung employee base that brings new channels to us and a brand new product portfolio that is going to really enable us to disrupt a business that really has not changed in about 30 years.

Talk about the 2017 product road map which includes A3.

In A3 there are 16 new platforms both laser and ink based products they are going to enable a channel partner to either significantly lower the cost per page to customer or it is going to allow them to make more money depending on how they elect to go after particular opportunities.

It is a very full portfolio and of course we unveiled it at the Global Partner Conference with a pretty impressive reveal. And a few months earlier than that we announced two 3D printing platforms and really the world's first production 3D printer which we think is very important because it moves beyond just prototyping to short run production. And it does it in a way that offers sort of breakthrough performance without compromising part quality and strength that you would expect when you move to production.

What about the 2017 pace of innovation for the rest of the print portfolio and PCs?

There are lots of new product refreshes we had over the course of 2016 and you would expect us to continue the innovation engine in print just as we drove it this year.

(HP Personal Systems President) Ron (Coughlin) with his sprinkles of magic in personal systems I am sure will continue to excite the market. I think our move into premium and gaming has just been incredibly well received. We are skating to the puck and opening up new markets where we haven't had a real product in those particular segments in a very substantial way in the past.

A business we don't talk about often is our graphics (printer) business and it is one of the growth initiatives for the organization. It disrupts a $35 billion analog printing business and moves it to digital with all the advantages of personalization for marketing organizations to communicate with their customers more intimately. So a lot on the horizon.

Is the Jet Fusion 3D 4200 Printer still on track to be delivered in late 2016, with the HP Jet Fusion 3D 3200 Printer following in 2017?

Still on track. We are still running according to plan. We are really happy with the progress the 3D print team has made. We are very excited by it. It is just the beginning of a brave new world that really hasn't changed since the last industrial revolution.

What are the share gains you have made against Apple?

I think we have a renewed obsession with the high end of our premium products and it is an obsession we put on ourselves. We don't look to anyone else to redefine and reinvent what premium should mean. We look internally to make ourselves better every single day and then the customer decides whether they love the sprinkles of magic that we create. If you look at the market share scoreboard of course we are taking share there and I expect we will continue to take share. We are really focused on engineering experiences that amaze every single day.

What are the market conditions going into 2017?

As we said we think the markets will continue to be challenged. But this team knows how to operate in up and down markets. It is something that I am particularly proud of. We operate to a pretty simple formula and the formula goes like this: change equals opportunity. And with all that change out there when we are making and inventing excellent products and processes and with the amazing people and partner community we have there is no stopping us.

I wake up tomorrow the first day of year two and it begins all over again – raising the bar every single day, taking that change turning it into opportunity and continually reinventing ourselves.

What improvement have you seen in partner scores, including the Canalys recognition?

As you know Europe is a very sophisticated market. It is very mature and well established with very senior players that operate in those markets.

It's a tough market when things don't go well in Europe. The Europeans will tell you exactly what is going to make their businesses grow and they expect you to do something about it. What really pleased me about the recognition is it the first time that a large company has ever won it. Normally it requires a really small nimble organization that is on a really fast growth trajectory to pick up this reward.

That fact that we picked it up really demonstrates what I said a year ago – 'the heart and energy of a startup, but the brains and muscle of a Fortune 100 organization.' That is the proof point that showed we were acting like a start up and we were listening and they rewarded us with that recognition.

What are the biggest gains you have made over the last year in making the organization partner led?

I think there is absolutely no ambiguity in anything we do. I started and grew up in the channel first as a reseller and then as a distributor and that I believe that the channel is the most efficient route to market.

Our more than 220,000 partners around the world amplify our sales effort to bring amazing products to our customers. That is something that I think is felt very deeply through our organization.

It is a very natural thing for us. It is in our DNA. It is not force-fed.

Talk about the increasing percentage of sales going through the channel.

We are moving from 80 to 87 percent (of sales through partners). We moved more than 300 accounts – the long tail of accounts – to our partners.

We listen to them in terms of what are the key pain points around how long does it take to get reimbursed and how can we accelerate and smooth out that process because cash is king if you are a reseller today – how do you make it easier for them to operate. All of the things that we have done are real proof points as to how we have improved the digitization of our relationship.

What is the call to action for partners for 2017?

I think the partners well understand our strategy. It is very well articulated. They applaud us for simplifying it. With every dollar of investment they have to make across all sorts of vendors, they get to choose where to put that dollar and in more cases than not they are putting that dollar down on us. We love that. And we respect it. We know we have to earn it every single day, get behind the programs that we are driving and that is going to create opportunity for them.