CRN Exclusive: HP Printing President Lores On Reinventing Print, Roam Business Printing, Smart Device Services, New Security Offerings, And Closing The Samsung Deal

Lores On Reinventing Printing

HP Imaging and Printing President Enrique Lores, who has been leading the company’s printing business renaissance, says breakthroughs like the new Roam business print anywhere offering and new security capabilities are reinventing printing.

"Many companies will say the future of print is uncertain, unsecure or not predictable," said Lores. "We think the future of print is whatever we want it to be. And what we want it to be is a growing business. This is our key message for the channel."

Lores said security improvements such as new HP Connection Inspector are opening the door to more managed print services opportunities for partners.

"What we have built into the printers now is a system to monitor traffic so they can detect if the traffic is not following the normal level," he said. "If they detect that, the printer is shut down. It is a very, very important feature to make sure if printers are hacked, they shut down themselves. It removes the risk of data being stolen through the printer."

Get all of CRN's HP Reinvent World Partner Forum here.

Talk about the state of the printing business in terms of sales growth and the role partners are playing in that growth.

We are reinventing print and reinventing print means getting the printing business back to growth. We have done this now for two quarters in a row and our goal is to continue to do that in the future. As the printing business grows, that means the printing business for our partners is going to be growing. And it is going to be growing across all segments.

It is growing in consumer by delighting our customers, offering them new opportunities to share their feelings. We are growing in the business space by expanding into A3 and growing our share in core category, differentiating through security. And we are also growing in graphics by continuing to drive the transformation to digital.

When we look at the portfolio of businesses, we now have all of the businesses growing, innovating and bringing new solutions to customers. We couldn't be more thrilled about the progress we have made and also about our projections for the future.

How big a difference is there between the printing business of today versus several years ago?

The last time the printing business grew [before the two recent consecutive quarters of sales growth] was in 2011. We have now had two quarters in a row of growth. We did not have a single quarter of growth in 2011. This is a good indication of how our performance is changing. When we look at the focus we have in the business now, we have had the ability to invest organically and inorganically and to innovate.

You can see the progress we are making across the board. The results are one proof point of how the overall business is changing. We look at this as a beginning. We need to continue doing that and continue to accelerate our growth in the coming years. This is a commitment and promise we make to our partners. If they do business with HP on the print side, their business will continue growing with us.

How you are reinventing the print category with offerings like Roam?

That is a new way for business professionals to get access to print. We know that business professionals are more mobile. With HP Roam we enable them to get their print wherever they are. We have all faced this before -- traveling to a different office and we don't know where the printer is and we need to get something printed. What HP Roam does is make that extremely, extremely easy.

The impact is going to mean more print and more printers sold. Partners are going to be able to monetize this opportunity because it is going to increase the number of pages printed and enable more printers to be sold to business customers. This is why it is so critical. It is making printing very easy for mobile professionals.

How big a game-changer is HP Roam?

HP Roam is a great example that innovation will continue in not only the printers but in the systems that we will build around them. Enabling professionals to get access to print no matter where they are, which is what HP Roam is doing, addresses one of the key needs that our customers have today. It is going to be enabling a tremendous explosion of new pages printed in the office. I am sure you have had this experience yourself. You go to a different office and you want to print something and you don't know where the printer is. You don't know how to get access to what you want.

With HP Roam you can do that and you can do it in a secure way so nobody else will be able to access your content or get the information that you want. You can also use this in a hotel. Using the same system you will be able to get secure access to your documents. Imagine the increase in pages this will drive. This is going to translate into more business for our partners.

Talk about the security advances you are bringing to market with regard to network security for printers.

Security is one of our key differentiators. With the announcements we are making, the difference is going to be bigger.

We started by integrating into printers many of the technologies we had done with PCs before. Now we are announcing a new feature built for the printer business. When a printer is hacked, there is a significant increase in traffic going out from that printer as it starts to communicate the information that the hacker is trying to steal.

What we have built into the printers now is a system to monitor traffic so they can detect if the traffic is not following the normal level. If they detect that, the printer is shut down. It is a very, very important feature to make sure if printers are hacked they shut down themselves. It removes the risk of data being stolen through the printer. It will be a unique feature in HP printers.

How big a breakthrough is this network security traffic monitoring?

This is HP software. We have been doing a lot of work to analyze what happens with printers when they are hacked. By analyzing that and understanding what happens and how they are attacked, we came up with this concept of monitoring the network and shutting the printers down. It comes from a lot of analysis and a lot of work.

Over time it will available in all the commercial printers: A4, A3, LaserJet and PageWide. It is a very important feature that we will have in the full portfolio.

What impact will predictive AI services delivery and security improvements have on the channel's profitability?

As we continue to improve smart device services, our goal is to every year reduce service costs between 10 [percent and] 15 percent. This is additional margin for our resellers every year.

The security services are not only good for customers because we are improving security for them, they are also a great excuse for resellers to have a new conversation with their customers. As we keep improving the security capabilities and as we see security threats growing and happening more and more, the fact is there is an opportunity to have another security conversation with customers on how they can get even better security with HP.

In both cases, we are helping to improve profitability of the resellers with improvements in smart device services and improvements in security. This is giving partners the ability to continue delighting customers.

What are the Smart Device Services 2.0 improvements?

We are also improving the smart device services features. As we announced a few months ago, this is our platform to reduce service costs. We are adding machine learning and artificial intelligence techniques to understand which parts are going to be failing.

So we have improved dramatically our ability to do preventive maintenance so we can detect what parts will be failing based on actual data. We monitor data and based on that we can estimate when parts will not be working anymore.

We also have been improving the quality of the data resellers will be getting so they can use that to be much more effective managing the printers in the fleet. The impact for resellers will be a continued reduction in service costs, which will translate in greater margins for them or in the ability to be more aggressive in deals when they sell HP printers. We win in both cases. It is a great improvement in both cases.

What kind of traction are you seeing in the channel with the new A3 copier replacement portfolio?

We are executing the plan that we spoke about a year ago. We have not deviated from that. Our strategy is to develop printers that have the capabilities of copiers but the simplicity, lower service costs and security that only printers have had until now. This is our key competitive advantage. We are not providing traditional copiers. We are doing printers with better performance than copiers – same cost per copy, same speed, lower service cost, much, much better security. This is our strategy and we keep delivering proof points that support that and make it even better.

What we are seeing in the market is a very strong positive reaction to our plan. We have been able to recruit the number of resellers we wanted and even more. We are engaged. We see the funnel they have. It is exceeding our aspirations. We are very happy with the progress we are making with A3, and we are going to continue driving that in the future.

Do you think the market potential for growth in printing is being underestimated?

I think, overall, yes. But it is up to us prove what the real potential is. This is what we are going to be doing. Our goal is to prove everybody wrong.

When I look at what is the best opportunity to grow with us, clearly in the A3 space as we expand our portfolio and also in print as a service. More and more of our business customers don't want to buy printers or supplies – they want to buy printing services. Offering those services is the best opportunity for our partners to grow.

For that offering security might be one of the key enablers of the conversation. All of our customers today are concerned about security. We are going to be helping them to realize how critical security is with the marketing campaigns we are going to be driving.

We had the Wolf campaign a year ago. We are complementing that with a campaign that explains how to address and fix some of the problems created by the Wolf.

We are addressing the awareness of how critical security is so our partners can leverage that message – drive that message home and increase their sales.

What is the biggest challenge that you see going forward?

I think we are going to see a lot of changes happening in the business in the years ahead. But rather than looking at these changes as challenges, we need to look at them as opportunities for us to do better. When I say ’us’ I mean HP and the partners.

There are going to be changes in [partner] business models. Customers want to go from a transactional model into a service model. We could look at this as a challenge because the model is different and we need to change a lot of things or as an opportunity to do better. We jointly – HP and the channel – need to look at this as an opportunity to do better. How can we deliver even better solutions to our customers by moving into a services world? This is the approach we need to take.

How fast are you seeing customers move from transactional to services?

It is happening very fast. It has happened fast in big corporations and now it is starting to change how smaller companies are working.

We think the service business is growing between 5 [and] 10 points faster than the transactional business. This is why for partners this is the best opportunity they have to grow with us.

What are you doing on the channel front to drive the as-a-services transition?

With A3 we changed the tools we used to manage the contractual business. In the next few months we are going to continue changing that and improve that. As we went to A3, we went to a different distribution model than we had in the past to make sure that our channel partners were able to make money and we built special tools for them. So we had more alignment in terms of pricing, availability, better visibility on status of products. Over the next few months it will continue to get better.

How big a deal is closing the $1 billion acquisition of Samsung Electronics printer business?

It is very, very important. Our goal is to have it closed by the end of the year. It will help us across the board in many different ways. It helps us in the A3 business because we will be getting very strong technology from that deal. It helps us in the A4 space because we increase our scale and complete our portfolio in some cases. And we are getting a very bright team of engineers that have expertise in printing and software that we will be using and integrating across the full HP portfolio. It's a very important deal for us. As we close, it just makes our position stronger in the market.

What is the key message for partners at the Reinvent conference?

We are reinventing print. The business is growing. We want it to be a sustainable trend so we need to continue growing. We really want to continue working with the channel to make sure that their businesses grow also. Many companies will say the future of print is uncertain, unsecure or not predictable. We think the future of print is whatever we want it to be. And what we want it to be is a growing business. This is our key message for the channel.

This is a huge moment for us. We keep reinventing print, as we have been saying for some time. The print business is doing extremely well. It is thriving. This is great for HP and for our partners because as our business grows their businesses grow as well. It is a fantastic moment for the print business and what we are announcing is making it even better. It is going to help us continue growing our hardware, services and supplies. It is really a fantastic time for the partners to do business with us.

How do you feel about the future print business opportunity for partners?

We feel very confident about the future. As we have discussed many times, we really believe in the power of print as a communications tool, as a tool for consumers to share their feelings, for professionals to communicate and for brands to engage with their consumers in different ways through personalization. We see this now coming to light across all our segments. The partners are going to see us continuing to innovate around these ideas.