HP’s WEB PLAN

[Anonymous]

HP’s Web Plan
Tech companies like Google, Yahoo! and Amazon have spent years trying to get offline information onto the Internet. Hewlett-Packard is running as fast as it can in the opposite direction.”They’re all turning atoms into bits, while we’re turning bits into atoms,” says Vyomesh Joshi, who runs the Imaging and Printing Group at Hewlett-Packard. Joshi wants to convince more Web users to print more pages while they surf – and of course, make sure as many of those pages as possible slide out of HP printers and soak up HP ink.
Joshi’s plan, in a nutshell, is to make printing from the Web easier than it already is.In the meantime, business is doing just fine: In HP’s second quarter ended April 30, his unit’s revenues grew 6%, to $7.2 billion, and accounted for nearly 30% of the company’s total quarterly revenue.But while HP chases down printed pages, it must also beat back competitor Eastman Kodak, which announced its intentions in February to enter the inkjet printer business. Kodak is 20 years late to that business, and intends to shake it up with printer cartridges priced much cheaper than those from HP, Epson or Lexmark. HP responded with a new ink pricing scheme of its own in May.Joshi spoke with Forbes.com about his “Print 2.0” strategy for getting people to print more pages and holding off Kodak.

Forbes.com: You think people are currently hesitant to click “print” from Web sites. Why is that, and what are you going to do about it?Joshi: Internet printing is not a great experience – the top of the page or the bottom of the page gets cut off. You can’t even print from a lot of places on the Internet, like Second Life. We purchased a company called Tabblo, and are turning their great design software into a toolkit that developers can use to integrate into their sites. Mapping sites and blogging sites can easily import this print widget that adds a print button. Our toolkit does the print formatting.This is going to be very important for us because there are millions of blogs created every day. What we’re offering with this software is enabling printing. Our business is still ink and toner.Which of your businesses is growing faster: home printing, or retail printing from Snapfish and other sites?While home printing is continuing to grow, Snapfish is growing faster. So, 50% of prints are still printed at home, but we’re not trying to sell you another printer for your second printer. How many printers can you really buy?But you’re still going to print more prints, so we want to give you ways to mash up your content with professional content. We worked with Dreamworks so you can make mugs and calendars with your pictures mixed with Shrek pictures.We’re doing this with moving images, too. We introduced a video content site for Wal-Mart. Soon you’ll be able to buy any DVD that’s available from their download store, and we’ll burn it for you and ship it. We’re building a factory for this right now.How are you going to get publishers of professional content – like books and magazines – to switch over to your pricey digital printers?Books, newspapers, magazines and even marketing brochures are all printed on analog Heidelberg presses. We’d love to bring that printed material to HP, but first we need to bring down the break-even point, so its affordable, and improve the speed. A 2,000-page job on a digital press costs the same as the analog press now, but if we can move that point to the 5,000 page jobs, we can capture a lot more business. The benefits to digital are clear – you can customize pages, change things, and get a lot more flexibility.

Kodak announced a new ink strategy in February, and you followed in May. They offered really cheap ink, while you’re going to sell two types of cartridges. Was your move in response to theirs?Our new ink strategy roll-out is going very well because we’re giving consumers a choice about what type of cartridge to select. If we want them to print lots of pages, we have to make it easy.Kodak’s approach is a little bit different. They’re letting you get slightly cheaper photos out of your printer. But if you look at what they are doing with black and white printing, it gets a bit more expensive than HP.They’re going after the same exact customers as us. They’re saying they’re cheaper but they’re not telling the whole story, from a cost of operations point of view. They’re focusing on draft quality and photos, but black and white printing is 70% of all home printing.

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May 31, 2007 at 11:55 AM