5 Takeaways From HP Execs On Products, Channel And Diversity

The Future Of HP

HP Inc. has been beating the odds and seeing strong growth in both of its core categories, PC and print, for much of the past two years. Now, HP is charting out what's next with new leadership in its Personal Systems business and an aggressive plan for working with channel partners and increasing diversity among its employee ranks. CRN recently visited HP's headquarters campus in Palo Alto, Calif., to hear from key executives on the strategy for the next phase of reinvention at the company. What follows are five key takeaways from the interviews with executives focused on PC, print, channel programs and diversity.

What's Next For HP's PC Business

Alex Cho (pictured), the recently appointed president of HP's Personal Systems business, said that even with all of the company's enhancements to PCs in recent years, there are many improvements ahead for HP's PC lineup. "We still think there's a lot of opportunity for innovation around design. We think about form-factor design, we think about material design. We also see design in getting things more svelte and thin, and having more performance," Cho said. "So we have a lot more to do there."

As for security, HP sees additional opportunities in offering differentiated features both on the inside of PCs (such as with the company's Sure Start self-healing BIOS) and on the hardware (such as the Sure View integrated privacy screen). "We are looking continually at how to bring more innovations [in security]", Cho said.

Meanwhile, users can expect more integration of intelligent voice assistants in HP PCs, such as Amazon's Alexa. "We've started with Alexa. I would say that we are open to more than Alexa in and of itself. Corporate environments have different needs and sensitivities versus home environments," Cho said. "There's also obviously a lot of growth in what's happening with Google Assistant. So we're looking at how do we navigate among all of them, and curate the best experience on our devices? We are open to all."

Premium (And Competing With Apple) Remains A Key Focus

HP is now the fastest-growing premium vendor by revenue, and "a big part of our strategy" is continuing to emphasize higher-margin, premium devices, Cho said. "It's good for our partners because [average unit prices] go up. And as well, premium devices also have a rich opportunity for attach around displays and accessories," he said. HP, meanwhile, has been focused on improving its Net Promoter Score and now has the highest consumer NPS among Windows devices, Cho said. "We've actually eliminated the gap between our consumer premium notebooks and Apple's," he said.

Apple, Cho said, "does clearly have a good segment of the market in terms of mindshare [but] they have actually lost share, and we've gained share in that space."

Security is one clear differentiator for HP's PC lineup, Cho said. "We're very focused on protecting below the OS, in the OS and above the OS. That is a strategy that has leadership across all vendors -- Windows and Apple," he said. "We still are the only ones that have a self-healing BIOS. It operates where anti-virus doesn't sit. It's where advanced persistent threats want to attack. And it's what enables us to create a root of trust for all the other security layers. Secondly, with things like Sure View, our integrated privacy screen -- there's no solution like that in the Apple space."

More Deals Similar To Apogee?

HP on Aug. 1 unveiled an agreement to acquire Apogee, Europe's top multivendor managed print services provider, to help boost its share in the A3 print copier market. HP said the deal values U.K.-based Apogee at $499 million. Down the road, as HP continues to aggressively pursue the A3 market, it might consider a similar acquisition of a company serving the North American market, HP executives said. "It's in our strategy to go win in the A3 copier space," said Anneliese Olson, general manager and global head of home printing solutions at HP. "It's making sure that we're making choices to shore up how we can go execute and lead there."

Meanwhile, HP executives aren't dismissing the idea of making an acquisition similar to Apogee on the personal systems side to boost its Device-as-a-Service business. "We are always looking at all ways that we can continue to grow scale across the value chain. So I guess I would say I would not rule anything out," Cho said. "Our intent is to go as fast as we can. So I would say all things are possible."

Partner Program Enhancements

Staying consistent for channel partners is a main goal at HP, said Stephanie Dismore (pictured), vice president and general manager for Americas channels at HP. The company is therefore not making major program overhauls in 2018 but is "modifying and tweaking as the channel needs us to change," she said. In recent months, HP has worked to help partners by extending the company's new business opportunity incentive, which is a back-end rebate for landing a new customer for HP. "Some of the challenges are that once we land a new account, sometimes it's hard to keep it because of competition," Dismore said. As a result, "we extended that [new customer] benefit by an additional six months," she said.

HP is also seeking to help enable the transition for partners to the contractual Device-as-a-Service model. "As we continue to drive this whole transition toward contractual, we realized we needed to help the channel community with incentives," Dismore said. So in recent months, "we've launched a significant amount of training on our DaaS and our managed print services, and we've offered different incentives and benefits in addition to the training," she said. "If a partner wants to work with us in a contractual way, there's additional benefit for the partner in terms of financial incentives."

HP Expects Its Diversity Push To Accelerate Its Business

HP's growth in recent years has come at the same time that diversity, both in the employee ranks and leadership, has seen major gains. "We are looking at how we go from 'diversity as usual' to really reinventing the standard for diversity," said Lesley Slaton Brown, chief diversity officer at HP. "We do it because data shows -- and it's proving out within our company and our results -- that we do get greater innovation and we do win business as a result of it." HP reports that it saw an 8 percent increase in hiring for self-identified minorities in 2017 over 2016, and minorities now account for 25 percent of the company's total U.S. workforce.

The company is also pushing to add to its ranks of women in technical roles, which now stands at 22 percent globally. "We'd like to see ourselves at 50 percent," she said. "That'll take a little time in the technical space for women. But we'll get there." As for the company's board of directors, HP reports that 50 percent of members are minorities and 40 percent are women.

Overall, "HP strives to be No. 1 or No. 2 in all product categories. We need to strive to be No. 1 in this [diversity] space because we know that impacts those product categories," she said.