Hewlett-Packard Co. (NYSE: HPQ) says its entering the new year on a high note with its managed print services business, with success both globally and in Canada in 2011, and is growing that business segment through channel partners servicing the SMB market.
“We created this global business a couple of years ago and it has really worked for us,” Bruce Dahlgren, senior vice-president of managed enterprise solutions with the company's imaging and printing group, told CDN at a media briefing in Toronto. “Specifically, Canada, last year had a phenomenal year.”
Last year, HP tripled the value of its total contract bookings and more than quadrupled the number of devices under management in Canada, according to Lloyd Bryant, vice-president and general manager of HP Canada's imaging and printing group.
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In Canada, about 60 per cent of HP's managed print business goes through the channel, which Bryant attributes to the larger SMB population here, a segment that is growing faster than the large enterprise market. “It's a very large addressable opportunity for channel partners,” he said.
From various knowledgeable sources in the industry, CDN estimates there are about 20 managed print services channel partners in total in Canada.
HP typically takes sales to large enterprise customers- which it describes as 1,000 employees or more- direct, and allows the channel to offer its managed print services offerings to the high-end mid-market and smaller businesses. The company expects the business through the channel to grow, both globally and in Canada. The company has about 3,000 managed print services customers worldwide.
Today, about 80 per cent of HP's managed print services business globally is large enterprise customers, Dahlgren said. That's mainly because large companies saw the potential of managed print early and adoption rates were higher.
However, that's beginning to shift as smaller businesses see the value in managed print. “I think there's a perception among many customers that managed print is for large enterprises, (but) the value proposition and the savings are just as compelling,” Bryant said.
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“It's just not feasible for us to go call on all those customers direct,” Dahlgren said. “There might be circumstances where we ultimately compete, that's part of the environment that we work in, but we really try hard to leverage our channel partners to assist” in managed print deals.
“Predictability is a core tenant of our channel program,” Bryant added, as the company tries to make it clear when it plans to take a direct sale.
One of its partners, Oakville Ont.-based LaserNetworks Inc., was acquired earlier this month by Xerox Corp. (NYSE: XRX) for an undisclosed amount. The company will now function as a wholly-owned subsidiary of Xerox but claimed it would maintain its vendor agnostic approach.
“It seems like it would be a difficult proposition to remain separate,” Dahlgren said. However, HP is focused on ensuring its LaserNetworks customers continue to get served and don't see a negative effect from this, Bryant said.
Some of the company's success can be attributed to recent acquisitions the company has made globally. In May 2011, the company announced it would acquire Printelligent, a managed print services provider based in Utah.
Then last fall, HP closed the acquisition of Britain's Autonomy Corp., a software company that makes unstructured data from Web pages or documents more searchable. Soon after, HP acquired German company Hiflex, which offers Web-to-print software solutions.
“I think there's a consolidation in the industry,” Dahlgren said. “We certainly won't rule anything out,” in terms of more acquisitions from HP.
The company is growing its offerings for workflow management and automating document lifecycle through the office, partially through these acquisitions, Dahlgren said.
Its strategy is now becoming more around end-to-end management of printing and production for large enterprises. There's also more focus on mobile printing solutions, with the company's ePrint cloud solution for both consumers and enterprises.
The selling point of managed print has also migrated from things such as printer speed to solving business problems.
“The conversation we're having today with CIOs and CFOs is very different than one we were having five years ago,” said Mike Feldman, vice-president and general manager of managed enterprise solutions for HP's imaging and printing group in the Americas.
Printing may not be on a CIO's list of priorities, but cost-savings, integrating mobile devices into the workplace and security all probably are, Feldman said, and managed print services can offer solutions to all of those priorities.
“Six years ago, it would have been challenging to get an appointment to see a CIO,” Bryant agreed. “Today, there's very few CIOs in corporate Canada who aren't interesting in talking to us because the scope of what we're talking about now is bigger than print.”
Follow Harmeet Singh on Twitter: @HarmeetCDN.
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