Fiscal 2013 is a fix and rebuild year for HP

Written by Sudhir Chowdhary | Updated: Oct 21 2013, 08:44am hrs
An exceptional leader is always thinking three steps ahead. Working to master his/her own environment with the goal to maintain an edge over competitors. Hewlett-Packard India managing director Neelam Dhawan is one such leader, characterised by a high level of energy and drive, and very realistic when it comes to assessing the landscape she operates in and practical about the decisions she makes. Under her leadership, Hewlett-Packard (HP) has become No.1 in all eight categories of its personal computer and printer businesses in India for the first time in its history. It has launched a completely new range of notebooks, laptops, hybrids, tablets, desktops, printers, servers, storage and networking products. I think it is a good sign that we have been investing in innovation for the future, because I strongly feel innovation is key to market leadership, says the lady in charge of India business for the American technology behemoth. Previously, Neelam was the managing director of Microsoft India, a position she held from 2005 to 2008. During her tenure, she sharpened Microsofts strategic focus and improved its operating efficiency and execution, as well as its financial performance and customer focus. In a wide-ranging interview with Sudhir Chowdhary, the HP India MD shares her mantra for success and plans to intensify operations in India. Excerpts:

You joined HP India in 2008 from Microsoft. Tell us about your journey so far

It has been a good journey. Very exciting times. These five years have seen the economy slowdown twice. This year has seen recessionary trends, similar to what we saw in 2009 and that has its impact on business. It creates the need to change your business strategy to ensure you survive in difficult times. The good thing is that the business has steadily grown and we have maintained our leadership position in the country.

Recently, your CEO Meg Whitman painted a very gloomy outlook for the company in every respect. While globally things are not looking great, how was 2013 for HP in India

It isnt really a gloomy picture. When Meg came in a year and a half ago, it was important for her to take a stock of the situation. For a large company like ours, it takes a lot of time to analyse investment opportunities, business strengths, focus areas, and so on. So, that was the first step and based on the findings, she devised a strategy focusing on growth areas that will help us accelerate our business turnaround.

We have now nearly completed two years in our five-year turnaround journey and we are already seeing tangible proof that the steps we have taken are working. In fiscal 2012, we diagnosed the problems facing the company, laid the foundation to fix them and put in place a plan to restore HP to growth. Most importantly, we did what we said we wouldstabilised the company, took action to bring costs in line with the revenue trajectory of the business and began tackling the structural and execution issues we identified. Fiscal 2013 is a fix-and-rebuild year for the company as critical changes to our organisational structure take hold. We are focused on fixing and rebuilding in seven key areas: product leadership & innovation, commercialisation, supply chain, operational excellence, capital allocation, leadership strength, and go-to-market.

In fact, we are starting to see positive traction in our business performance as a result of the actions we took last year to lay the foundation for HPs future. Our focus is on innovations suited for the New Style of IT, which will help us sustain our leadership in India.

HP has emerged as No.1 in all eight categories of its personal computer and printer businesses in India for the first time in its history. What is your winning strategy

We have launched a complete new range of notebooks, laptops, hybrid, tablets, desktops, printers, servers, storage and networking products. I think it is a good sign that we have been investing in innovation for the future, because I strongly feel innovation is key to market leadership. In the printing and personal computing segment our next generation form factors like the HP SlateBook x2, our first Android hybrid device, HP Split x2, a versatile 2-in-1 device where the productivity and power of a notebook meets the flexibility and fun of a tablet; the touch based HP Pavilion 11 TouchSmart Notebook; affordable printing solutions like the Ink Advantage, are all helping us stay ahead of the curve.

On the enterprise business side, the Gen 8 servers and Moonshot that uses up to 89% less energy, 80% less space, reduces cost by 77% over traditional servers, are key to our winning strategy. So, innovating to meet the needs of today and tomorrow has helped us gain momentum.

Considering that we are seeing declining growth in PC industry, does HP have a strategy to retain the number one tag in India

We know the industry is changing and yes the PC market is declining as new generation form factors gain momentum. Our focus here is to offer the devices consumers prefer to use to access information and create content, and we look at PCs as one such device people use to stay connected or be on the cloud.

So, while we continue to strengthen our PC portfolioincluding desktops, notebooks, workstations, convertibles, hybrids and all-in-ones, we will look at expanding our offerings in the growing tablet space. We view tablets as an extension of our overall personal systems portfolio, and we have an aggressive tablet strategy that aims to gain enough scale to aid hardware margins while driving attached services and software revenues.

We will continue to evolve with the market trends and customer demands, and make sure we stay relevant to our customers while form factors change. We have a long-term view of the market and are optimistic that we have what it takes to continue being the leader hereportfolio, reach and customer experience.

Can Central government schemes like cheap tablets or free laptops by some states bridge Indias digital divide

Yes it can and does work well if the schemes are targeting the right audience, as in Uttar Pradesh, where laptops were given to 12th standard students on the verge of entering college. So, if you give the devices to senior school students or college students and support the initiative with basic usage training, then it can help in bridging the digital divide.

HP has lost its worldwide market leadership to Lenovo. The Chinese company has been a fierce competitor in India market as well. What is the technology differentiator that HP brings to the table compared to Lenovo

In India, HP maintained its position as the No. 1 PC vendor for the third successive quarter and for printers yet again. One out of every two printers sold in India was an HP printer and one out of every three PCs sold in India was an HP PC. As per IDC, HP achieved one of the highest ever PC client share of 34.1% in the Indian market. HP had become No.1 in all eight categories of its PC and printer businesses in India for the first time in its history.

Three factors have helped us achieve this. They are our comprehensive product portfolio with some interesting innovations both in terms of form factor and features; our unparalleled reach and wide retail and service network and finally, customer experience both at a pre-sales stage and post sales that has helped us gain customer loyalty.

The domestic market has been sluggish so far. Do you think that market conditions would improve in the months to come

While the market has been sluggish, if you look at the IDC results from Q4, 2012 to the most recent one, Q2, 2013, you will realise that HP has done quite well. We have gained market share while market on the whole has declined. So we have been doing well.

As far as improvement is concerned, I dont expect the market to gain momentum until the GDP growth picks up, since there is a direct correlation between the two. When the economy does well, people want to invest in their business and in information technology, which is great for us. So, we are all hoping that things change for the better.

Do you think enterprises in India have shown an encouraging response towards the adoption of cloud

Primarily, there are different kinds of cloud models including private, public cloud and hybrid cloud. Now a private cloud is usually set up when you want to reach out to your employees, dealers, retailer, scattered around the world, in essence, a closed user group integral to your business. Here access is limited and controlled while you have a wide reach and complete flexibility. This has picked up very well. When it comes to public cloud, the adoption has been comparatively low but the adoption will pick up as more and more applications will be hosted on it. For instance, currently mails and small ERP solutions are available. So companies are evaluating hybrid models where what is critical to my business is already in my data centre and the good to do processes that give me visibility within my employee network or connect with my partners and stakeholders are being moved to the cloud. So, all three models are being experimented, where customers demand seamless experience.

At HP we believe IT organisations will need to implement a hybrid delivery model that leverages cloud and traditional IT to optimise applications, service creation and delivery. Our goal is to provide enterprises with the foundation they need to embrace the cloud and gain from its inherent benefitsagility, faster innovation and risk management, all at a lower cost. We believe that only HP can deliver the choice customers want with the confidence CIOs require around management and security, in a single consistent architecture.

We lead the market in Converged Infrastructure, delivering innovation across the data centre, spanning servers, storage, networking and technology services. The HP Converged Cloud enables enterprises to incorporate a blend of public, private and managed cloud services with their existing IT to create a seamless hybrid environment that rapidly adapts to their changing requirements. It provides a consistent architecture and consumption model that ultimately allows for workload portability.

HP has a big resource of R&D personnel stationed in India. Can you tell us about the companys focus on innovation

Innovation is a big focus area for HP. This industry thrives on innovation. It is always looking for newer, simpler and smarter ways of doing things, and only a company with the latest and greatest products can survive in this market. Innovation is therefore integral to our business strategy.

To capitalise on HPs strong culture of innovation, we are transforming R&D centres into a business asset and speeding the commercialisation of our best ideas. Our R&D units have strengthened its partnership with the business units, including tighter alignment with the global business units, as well as building a stronger and more cohesive R&D community across HP. For instance, HP PPS Printing R&D Hub in India has filed 30 patents in the area of web connected printers that include innovations in the areas of ePrint, PrintApps, Scan to Cloud and support for MobileApps.

The successful launch of HP Moonshot in April 2012 was the culmination of 10 years of extensive global research from HP Labs and successful collaboration with HP Enterprise Group. Most R&D centres focus on developing technology to meet needs of customers five to seven years from now. For us at HP, it is not just about focusing on identifying technology solutions that focus on the needs of tomorrow, but to build that vision into the products that we plan to launch today.

What are the growth plans for the company in India

When you look at India, expectations always are that we will grow faster than the rest of the world. Given our limited PC penetration rates and limited usage of IT in growth vectors like mission critical solutions, public sector businesses, verticals like healthcare and education, SMBs, etc. we foresee huge growth potential in the country.

The government is visibly an important buyer of IT, with its renewed focus on improving IT-enabled citizen services, enhancing public sector efficiency and investing in newer technologies.

We also aim to renew our focus on the SMB business, where our growth will pivot on solutions for the New Style of IT. This is a transformational shift bridging the consumer and enterprise experience. The four key trends that are enabling the transition to the New Style of ITcloud computing, big data, security and mobilityare at the heart of this transformation.

As customers demand anytime, anywhere access to technology and through multiple devices, for mobile banking, social networking, etc., we see strong potential for cloud based solutions and the need for next generation form factors.

As cloud computing gains momentum, it is expected to radically alter the way technology is leveraged, both at the application and platform level as well as on the hardware delivery side, in order to make all this possible. While on the one hand this would lead to multiple access points, on the other hand it will create a deluge of data leading to the need for data analytics, information security and management solutions.

So cloud, big data,

security and mobility will key focus areas for HP in India. This will be the growth engine for HP in India and is going to keep us busy for some time.