I had an interesting discussion with Enrique Lores, the head of HP’s printer division, last week. He gave me the background on the November 1st announcement that HP has won the contract for a printer to go into the International Space Station. What is fascinating about this is that space travel is all about weight reduction and the elimination of consumables; almost everything must be recycled on the station because getting rid of the trash can be a tad more difficult than it is on the ground. This all happened under a broader discussion of HP’s printer business, which has been growing in terms of supplies, and the firm’s acquisition of Samsung’s printer/copier unit, which closed this week.
I think this all goes to a showcase on focus and how important that has been in the turnaround for that firm. In contrasting HP and HPE, HPE seemed to have all the material advantages, but HP has out-executed HPE, mostly because of a combination of focus and experienced executive staff.
Printers in Space
What makes this interesting is not only do astronauts seem to want paper copies of reports and checklists, but they also want to receive pictures and letters on paper, not on a screen. I have a feeling this is because it makes them feel more at home and connects them more strongly with the people who are sending these pictures and letters. There is also something permanent about a piece of paper and given how many breaches and memory failures we have either seen or been part of, the feeling that at least something is in hard copy and provides a permanent record appears to be worth the hassle of having one more device on the already cramped Space Station.
I’d have thought that putting ink on the paper would have been the biggest problem in an implementation without gravity and imagined little lines of floating ink all around the cabin. But apparently, the ink head and paper are so close, and the ink is shot out with enough pressure that this doesn’t happen. I’m told that HP didn’t even have to alter the ink delivery part of the printer. What did have to be altered was the paper handling part because that relied heavily on gravity to properly feed. But the fix was surprisingly simple, making the printer in the Space Station little different than the one you might have on your desk.
It amazes me that now nearly three decades after we pretty much declared we are moving to a paperless office, the one place you’d expect to be paperless, the International Space Station, isn’t. I’m thinking the whole “printing is dead” argument was just a bit premature.
Samsung and Printing
With today’s Samsung printer business sale close, HP continues to double down on printing; picking up Samsung’s printing and copying business expands HP’s footprint into the A3 copier segment. The point isn’t so much the expansion but that with printing supply sales up, this is a very profitable segment for HP and printing was thought to be that firm’s weakest link at the split: a massive, seemingly declining, business where the decline was supposedly caused by behavior change, not competition.
But the behavior stopped changing. Printing, which clearly was in decline, plateaued and the result was that as HP buys into more of this business, it should see a better than reasonable return on investment.
This is in sharp contrast to acquisitions by companies like Yahoo, which weren’t tied closely to core skills and caused distractions rather than benefits.
HP continues to expand into 3D printing as well, which is also an adjacent business, and a showcase for what is almost a textbook turnaround: Focus back on what the firm is good at, eliminate distractions, and execute. It seems so simple…
Wrapping Up: HP Focuses on Strengths
Markets tend to decline slowly and often part of what accelerates a decline is a lack of investment in the segment. HP has increased its investment in printing and been able to show growth in what was thought to be a terminally declining business, suggesting that this core perception, that printing is in decline, isn’t cast in stone and my not be fully founded on fact. By keeping close to what it is good at, HP has showcased growth and solid financial execution. It really doesn’t seem to be a very difficult formula, but it continues to surprise me how few firms undergoing turnarounds use it.
Rob Enderle is President and Principal Analyst of the Enderle Group, a forward-looking emerging technology advisory firm. With over 30 years’ experience in emerging technologies, he has provided regional and global companies with guidance in how to better target customer needs; create new business opportunities; anticipate technology changes; select vendors and products; and present their products in the best possible light. Rob covers the technology industry broadly. Before founding the Enderle Group, Rob was the Senior Research Fellow for Forrester Research and the Giga Information Group, and held senior positions at IBM and ROLM. Follow Rob on Twitter @enderle, on Facebook and on Google+