Last week, the American tech behemoth Hewlett-Packard officially split into two companies: HP Inc, which will sell personal computers and printers, and Hewlett Packard Enterprise...
Last week, the American tech behemoth Hewlett-Packard officially split into two companies: HP Inc, which will sell personal computers and printers, and Hewlett Packard Enterprise, which will sell commercial computer systems, software and tech services. “It’s one of the largest splits in corporate history. The markets are moving fast and if we can split into smaller or nimble companies, then we can be more responsive to the markets,” says Ron Coughlin, the president of HP Inc’s Personal Systems Business. This group focuses on PCs, tablets, accessories and other related services for all customer segments and represents a $35 billion annual revenue business for HP. Coughlin shares with Sudhir Chowdhary his plans on how the company would be at the forefront of creating new product categories. Excerpts:
What is the management thinking behind the move to split HP into two companies and what to expect in the future?
It’s one of the largest splits in corporate history. We are a $57 billion company that is number one in commercial PCs, number one in workstations, number one in thin clients, number one in inkjets, number one in deskjets and number two in consumer PCs. We choose not to play in certain categories. What makes us most excited about the new HP Inc is the ability to have the creativity and speed of an entrepreneur and the scale of a Fortune 100 company.
HP was always considered a brand for serious professionals. But now we see a transformation of the brand. What has been the reason for this makeover?
Well, first, as you say, we are a brand for serious professionals, but also a brand for consumers. We are number one in India in consumer market as well. The markets are moving so fast and if we could split into smaller or nimble companies, then we can be more responsive to the markets, as well as we can allocate capital to the businesses as and when they need it.
Almost all the brands talk about quality and experience. What, according to you, are the key differentiators to make a mark?
If you look at what we have done in the last year, we have been bringing amazing additions to the market. In October, we launched blended reality, which is creating new caliber called immersive computing and we are connecting network 3D printers and creating the first 3D ecosystem. In January, we launched the first comprehensive array of commercial mobility devices and commercial mobility solutions with a mobile workflow transformation initiative and commercial ability. In March, we announced the Spectre x360, which is the best convertible in the marketplace. And when you look at the Elite1020, it’s the finest largest notebook in its class. So, we are really having innovation drive our future.
IDC has ranked HP as the number 1 PC vendor in India for Q2, 2015. What is your go-to-market strategy to sustain this leadership?
We are taking up products to the markets which are not served right now and making sure that our market expansion programme runs extremely well. Second is our strong focus on expanding our partner network. We have a lot of partners in the commercial space and have an equally large number of partners in the consumer space. We believe we have the best partner network in the industry right now. Third thing that we are doing is to make sure the service network is closer to the customers. We are all the time focusing on creating our expansion on the service network.
Both these initiatives provide tremendous opportunity for us from a business stand point and tremendous opportunity for us to make a contribution in India. If I look at it on a global basis, it’s one of the biggest opportunity we have and actually it offers us an opportunity to support the Digital India initiative. Digital India is pretty much the most significant initiative that the government has taken in a long time and as you look to convert the economy to a knowledge economy, it requires a significant amount of effort from players like ourselves, to support tech initiatives and we are completely geared to doing that.
Working with the government on projects that it has planned to roll out, whether it is in education area or in the skills development or it is network or it is any other social or financial inclusion project that the government is talking about—we are following these initiatives closely. We are very closely associated with the government right now.
Post the split, what can we expect from HP Inc? Can we expect products specifically for India?
We believe the Indian market requires custom products. So it is a basic combination; a combination of global products like the Spectre x360. At the same time there are local needs, whether those be for tier-III or tier-V cities, whether those be for education, whether those be for the digitisation of India.
The PC market continues to decline year-on-year. Do you expect any revival?
We see an improving trend as we go to 2016, as 2015 had several issues in it. Currency’s value saw a decline that had a huge impact on the purchasing power of the consumer. We hope it won’t repeat in 2016. Also, Microsoft Windows 8 was not accepted by consumers while Windows 10 has seen a better response from consumers. We have now new form factors from HP that we believe will drive PC adoption in 2016.