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 user 2005-05-17 at 10:33:00 am Views: 60
  • #9627
    HP Execs Issue Challenge To Printer Rivals

    Bring it on.

    That’s the message some top Hewlett-Packard executives had for their printer
    competitors this week at the 2005 HP Imaging and Printing Conference in Half
    Moon Bay, Calif. Though rivals such as Dell and Lexmark are gunning for HP’s
    hefty market share in the printer space, the Palo Alto, Calif.-based IT giant
    isn’t afraid of a little competition, executives said.

    Kevin Gilroy, senior vice president of worldwide SMB segment operations for
    HP, said he welcomes the heat. “I wake up in the morning thankful we have tough
    competitors,” he told CRN Wednesday. “They make us be the best we can be.
    Competition brings out the best in people.”

    Vyomesh Joshi, executive president of HP’s Imaging and Printing Personal
    Systems Group, had some harsher words for Dell, one of the company’s more
    determined competitors in the printer arena. In a roundtable discussion at the
    conference on Tuesday, he said Dell isn’t a viable HP competitor in printers
    because the Round Rock, Texas-based hardware vendor still must prove it can make
    money in that part of its business.

    “I believe you’re in business when you make money,” Joshi said. “Dell doesn’t
    make money [in printers]. Shareholders will not tolerate if you’re not making
    your average profits. Dell has to prove [itself] to have a viable, long-term
    printing business.”

    Dell faces a lot of challenges in the printer market because the company
    lacks the kind of partnerships that enabled it to dominate the PC hardware
    space, according to Joshi. “Dell is successful in the PC model because the
    innovation is done by Microsoft and Intel,” he said.

    Still, HP isn’t ignoring the threat from competitors, Gilroy noted. HP is
    always watching its back and, if needed, will proactively implement changes in
    any part of its business that’s under competitive pressure, he said.

    “It wouldn’t be prudent for us to just ignore competitors,” Gilroy said. “I
    think we take an aggressive analysis, and we have leading indicators that we
    watch. There are programs we have in place and programs in the drawer that, if
    we need to launch, we can. We take competitors on before they get on the beach,
    and we hold them on the beach.”

    HP has been driving down the price of its printers as a tactic to ward off
    competitors–a move that has squeezed the margins of channel partners. But
    Gilroy said printer pricing has declined for years, and by now the savviest VARs
    have adjusted their business models to roll with the market changes.

    “Channel partners are resilient,” he said. “It’s a bell curve. There are some
    who aren’t resilient, and they are stuck in a business model. But there are
    early adopters who morphed their business models ahead of the curve.”