Faced with a myriad of challenges ranging from regional market upheavals, maturing of channel partners, customer expectations around business and printing workflow processes, Dubai GITEX round the corner and restructuring around PSG?s spinoff, Mortazavi gives his take on the road ahead
With the announcement of HP’s intention to spin off its PSG division, the market has been given the indication that HP does not want to be in the commodity low margin business. HP’s IPG business has a similar business model. What are the medium to longterm implications of this thinking on the IPG business?
Mortazavi: HP announced that its board of directors had authorised the evaluation of strategic alternatives for PSG, including the exploration of the separation of its PC business into a separate company through a spin-off or other transaction. A final decision will be made by calendar year end, if not sooner.
Our channel partners and our customers make us number one and we intend to retain their trust and earn their continued, uninterrupted business. Likewise, our plans for compelling products remain unchanged. HP has a history of innovation and technological leadership. Our roadmaps for future products have not changed. We have more than 180,000 channel partners worldwide and are targeting significant longterm growth opportunities, especially in emerging markets where technology penetration is small.
Again there are indications that IPG would like its partners to build their business model on value added services, with emphasis on faster growth from VARs and SIs. Does HP IPG have the product portfolio to support these excitement levels?
Mortazavi: Most certainly. HP always provides customers with a compelling product experience, ensuring they have the maximum opportunity to enjoy true interactive digital features. These are comprehensive features which are transforming the nature of the printing experience from the enterprise customer to home users.
What started with the printer being hooked up only to your computer, is now a printer that can be accessed around the world from your handheld mobile device, a seamless but visible progression through the years, and what I like to call the journey of printer independence. HP’s new portfolio of web-connected printers for customers makes it easy to access HP print apps, share information and ePrint wherever business happens.
There are some indications about IPG being uncomfortable on the short and medium term sustainability of Dubai’s re-export business? What is the transition process for the local volume resellers and IPGs volume business?
Mortazavi: We continue to focus on increasing the number of value-added reseller within our channel landscape and our primary focus continues to be on maximising our scope of work within the SMB, enterprise and corporate sectors.
In the value added space and managed print services, competitor Xerox has a definite lead in terms of first-to-market and go-to-market especially on regional basis. Does IPG run the risk of being seen as a follower rather than a leader in this area?
Mortazavi: I would disagree with your assessment regarding the managed print services space. HP has pioneered the leadership of the managed print services, and we continue to define the solutions for customers facing challenges managing digital information workflows. HP’s depth and breadth of knowledge across IT and imaging and printing becomes a compelling proposition as we can provide a solution as a single partner, one single point of integration across workflow management and fleet optimisation. Few organisations can excel in both domains and only HP can bridge paper and digital processes.
Enterprises are increasingly recognising printing costs in a more holistic way. We must remember for every 1 dirham spent on printing another 9 dirhams is required to manage, and customers are acknowledging that a broader focus is needed beyond the initial device and supplies acquisition costs.
How does IPG management view the current performance and positioning of its key distributor partners including Redington, Emitac, Jumbo and Despec?
Mortazavi: We have a longstanding relationship with the four distributors mentioned, we have enjoyed a lot of success and as our strategies are aligned, I believe we are well positioned to continue our market leadership.
Has there been any revamp in the channel structure?
Mortazavi: HP has executed a revamp of the channel partners programmes merging hardware and supplies programmes allowing partners to better leverage their total business with HP IPG. Judging by the number of channel partners, it has become evident that these partners recognise the quality of the HP brand and technology. HP has also decided to have a resident channel technology consultant position in the Middle East, helping partners develop their expertise in value sales and solutions.
What does HP bring to GITEX this year?
Mortazavi: We look forward to the exhibitions with focus on new technologies like cloud computing and on-going messages like eco-friendliness. We are definitely seeing a strong recovery in the Middle East since the global economic downturn. The printing market continues to observe strong growth and that is good reason for optimism for the future of Middle East markets.
During GITEX we will be operating an HP booth in conjunction with Dubai Internet City, where we will be promoting our anti counterfeit awareness campaign. Separately we will be operating a huge stand at the GITEX Shopper, as this venue is always popular with customers. During GITEX we are also looking forward to making a significant announcement in regards to our planet partners recycling programme here in the UAE.
Discuss steps HP has initiated to tackle counterfeit trafficking in supplies?
In 2010 alone, HP seized $100 million worth of counterfeits within the Middle East. Further to HP’s continuous commitment to combat the ever-evolving counterfeit trade, HP in 2010 also joined the Business Action to Stop Counterfeiting and Piracy Global Leadership Group.
Going forward what is your outlook on the IPG product portfolio over the next six to nine months? Which parts of the portfolio are likely to see high demand, which parts are likely to see sustained demand and which parts sluggish demand?
Mortazavi: We have witnessed solid growth across our entire product portfolio over the recent period, and I would say the ePrint enabled printing devices continue to surprise us with growing customer demand. We see demand continuing to rise as the technology is implemented across our product range. HP once again demonstrates its industry leadership, transforming the flow of content for all customers into when-you-want-it, when-you-need-it availability, through HP ePrint.