HP to VARs: Quit Selling Printers and Start Selling PrintingBy John Hazard | Posted 2006-06-22 Email Print
HP wants to move from selling printers to selling printing—pay-per-click, managed print services and document management solutions—that captures more customer wallet and the ways businesses use printing.
Hewlett-Packard, the world's leading printer manufacturer, wants to leave the printer business.
The vendor that dominates the market, with a 45 percent share, wants to move itself and its VARs from selling printers to selling printing—pay-per-click, managed print services and document management solutions—that captures more customer wallet and speaks to the ways businesses use printing, executives and partners in HP's Imaging and Printing Group said.
HP expects the strategy, which it and several other vendors have been drumming for months now, to drive sales in a slumping market as new solutions require upgrades, albeit with fewer printers in each shop, and maintain market share that equals opportunity at other points on the HP portfolio, said Laura Blackmer, vice president of IPG Commercial Sales. The measure will also mean a healthier channel with more profitable and valuable partners, she said.
For VARs, the opportunity means more value add, differentiation, and a piece of the services and supplies pie currently sent to retail chains and Web sites, executives and VARs said.
"It's selling pages not printers," said Jim Fall, director of strategic planning at Cannon IV, in Indianapolis, a print services VAR and HP partner of 17 years. "Instead of capturing the printer, you're capturing the print and everything that goes along with it—supplies, policy management, security. It's a solution-oriented sale that is much harder to grab but more rewarding in the end."
The strategy relies on the channel, Blackmer said, because it is a business sale, requiring a local presence and an understanding of how a customer operates.
HP is encouraging VARs with incentives, margins and marketing programs to drive the solution, Fall and Blackmer said.
"Gone are the days when it was a transactional business," Blackmer said. "You can't just sit there and fill the POs as they fly off the fax machine."
Printer shipments have been slipping, with growth slowing from 80 percent in 2004-2005 to 24 percent yearly growth over the next five years, according to IDC.
Part of the problem is that the products are well-built.
"The first laser printers we ever sold are still out there and doing their job," said Vyomesh Joshi, executive vice president of the IPG unit. "They're a workhorse, and we're glad to hear it. But you can't just sit back and wait for it to die to go in and sell another unit."
HP is encouraging "baby steps," Blackmer said. "We just want them begin having the conversation with their customers," she said. "Sell a care pack. Offer to do a print audit. Then you can look at something like access control or how many DeskJets are sitting unused under employee desks."
"It's as simple as asking the right questions," Fall said. "You wouldn't sell someone a camera without asking if they needed a roll of film. What else do you need? … It's also a business decision. Printing is the last major segment of the corporate world to be unaudited, and it's costing them a fortune. Let them know what and where they can save."
But the transition can be difficult, Fall and Blackmer said.
"It's a longer sales cycle," Fall said. "Selling a couple of printers might take three days. Selling a document management solution might take three months. If you're paying the bills by selling those units, that's a big investment to suddenly flick the switch to solution selling. You have to be ready for it."
As HP and VARs move up the continuum, VARs are already offering managed print services using remote management platforms, and HP is working on a partnership with a managed services provider to provide a resellable managed services offering, Blackmer said.