Hewlett-Packard is leaping into the high-

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For HP, Copiers May Not Be A Cinch
Penelope Patsuris, 11.19.03, 8:00 AM ET

NEW YORK - These days, office workers don't necessarily have to print documents using a printer, since new networked office copiers can print as well as reproduce documents.

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Hewlett-Packard (nyse: HPQ - news - people ) responded to this phenomenon Nov. 18 by unveiling plans to sell the very same high-end multifunction copiers in addition to its extensive line of printers.

The paperless office may have failed to emerge, but the flow of paper in offices has in fact shifted. "The volume of copies being made is flat," says IDC analyst Riley McNulty, "but the volume that's printed is increasing, which is why copy machine makers have added printing capabilities."

It would be a stretch to call this a defensive move on the part of HP, but the computer and printer giant is certainly responding to a threat that it sees from copier outfits like Xerox (nyse: XRX - news - people ), Canon (nyse: CAJ - news - people ) and Ricoh. With its recent push into digital cameras and a ubiquitous ad campaign it's clear that HP intends to put itself at the center of all things imaging in the home and office.

HP also announced a copier distribution deal with Ikon Office Solutions (nyse: IKN - news - people ), the world's largest independent channel for document management systems, and introduced new customers Best Buy (nyse: BBY - news - people ), National Semiconductor (nyse: NSM - news - people ) and Subway.

For business clients its latest pitch is this: Let us come in and analyze your document printing and copying systems and show you how to streamline them to save money. But without high-end copiers in its line it would be tough to take on formidable competitors-- such as Xerox, Pitney Bowes (nyse: PBI - news - people ), Oce (nasdaq: OCENY - news - people )-owned Archer Management and Ikon--in this space.

The new strategy won't necessarily be a cinch for the $57 billion (2002 sales) company.

Even with a high-end copier line, HP's copier efforts will depend on its ability to assemble the kind of services operation that these copiers require, and that will take HP some time, according to IDC analyst Angele Boyd. As is the case with most hardware, selling these machines is more a play to supply the high-margin services, support and supplies like toner that they require.

Multifunction copiers need a high level of support that HP hasn't had to provide for its printers, which are usually serviced by the dealers that sell them or by corporate information technology departments, says Boyd. Ikon will probably service the copiers that it sells, but Boyd says HP expects to sell about half of its copiers via its direct sales team, and those will likely have to be serviced by HP itself.

"They're going to need to train their own services organization," she says, "and my understanding is that HP's services infrastructure is not totally ready. HP won't sell to any company that they can't support so they're going to have to move slowly." That should give outfits like Canon and Ricoh time to respond by getting more products on the market.

"Everyone's assumption seems to be that HP will come into this market and clean up," says Boyd. "But it has the kind of entrenched players that HP didn't face in the printer market. These guys have a lot to lose, and they're going to fight."

SAN FRANCISCO (CBS.MW) - Hewlett-Packard on Tuesday said its entry into the high-end copier market, competing with the likes of industry giant Xerox, will bring it more than $2 billion in additional revenue within three years.

"We believe that the approach that we are taking is really going to help us in transforming this $24 billion industry," said Vyomesh Joshi, head of H-P's printing and imaging business. "I am very confident we will be able to make this thing happen."

According to Joshi, H-P (HPQ: news, chart, profile) controls about 1.5 percent of the copier market right now, mostly from sales of all-in-one devices that serve as printers and scanners, as well as copiers. But by also selling higher-end copiers that range in price from $18,000 to more than $37,000, Joshi says the company plans to control at least 10 percent of the copier market by the end of 2006.

"H-P is being opportunistic - they are expanding on their already profitable printer business," says Bob Djurdjevic, analyst with Annex Research in Scottsdale, Ariz. "But this will be a marketing challenge, not a technical challenge. The question is, will they be able to lure customers from Xerox and others?"

Shares of H-P fell 35 cents to close at $21.65 in regular-session trading on the New York Stock Exchange. Xerox (XRX: news, chart, profile) shares fell 23 cents to $10.17.

A long-held criticism of H-P is its lack of marketing prowess, according to Djurdjevic. In the past, the company has allowed competitors with a slick message, including Sun Microsystems (SUNW: news, chart, profile), to sneak up behind it in key markets.

Now, according to Joshi, it's H-P's turn to come up from behind, taking market share from established companies like Xerox (XRX: news, chart, profile) with a marketing campaign that emphasizes how much H-P can save copier customers over the long haul.

H-P's message, Joshi says, is that business customers are spending about $800 a year per employee on imaging and printing hardware, supplies and services which includes copiers. So a company with 5,000 employees will spend $4 million a year printing, copying and scanning.

Customers who already use H-P for printing and scanning can save 30 percent a year by also using H-P copiers, Joshi says. The savings, he says, will come from a combination of more reliable hardware, which uses H-P-designed electronics built by Konika, as well as consulting services that can help companies use only the copying equipment that really need, H-P software for managing copying environments, and pay-per-use services options.

"By adding copiers to its printing and imaging lineup, H-P becomes a one-stop shop for its customers' imaging needs," said Tim Bajarin, an analyst with Creative Strategies in Campbell, Calif. "The big IT guys who have to buy this kind of equipment really like that."

So far, H-P says it has signed up several large copier customers including electronics retailer Best Buy (BBY: news, chart, profile), chipmaker National Semiconductor (NSM: news, chart, profile) and sandwich chain Subway. H-P says it is working with each company to "transform their imaging and printing operations," but didn't disclose the value of those deals.

Although H-P lacks a rich business tradition in copiers, Bajarin calls the company a "very worthy competitor", and says H-P could affect the profit and sales of Xerox and Canon over time.

For customers that already have an established relationship with a copier-servicing company, H-P also plans to resell printers through Malvern, Pa.-based Ikon, a leader in offering office services. Ikon already sells H-P laser printers and some other types of H-P equipment.

Joshi says H-P's copier business will be profitable from the start, and that the company will garner a profit margin similar to its printer business. Printing and imaging has typically been H-P's most profitable group in recent years. Sales increased 10 percent to $5.24 billion in the company's fiscal-third quarter.

In addition to its move into copiers, H-P also announced on Tuesday a new digital pen-and-paper system. H-P plans to sell it to companies that can benefit from creating forms electronically, such as health care and insurance businesses.

Unlike tablet-based computers that use a dummy stylus and have the bulk of the technology in the computer, H-P's system puts the technology in the pen. The system uses "smart" paper that looks much like a normal typing sheet.

After filling out a form on the special paper, the pen is placed in a docking station, where data is downloaded, so it can be set to a storage system, or printed on an H-P printer.

The pen-and-paper system costs about $45,000 each, as well as a 20-cent handling charge per form. The system is supposed to handle up to 200 forms a day.

Mike Tarsala is a San Francisco-based reporter

HP (NYSE:HPQ) today unveiled an extensive portfolio of products, services and capabilities to help companies improve productivity and reduce costs by as much as 30 percent in their imaging and printing environments. The centerpiece of the new products is a copier-based line of high-volume multi-function printers, the first of their kind for HP as it enters the $24 billion copier market.

The company also announced document workflow solutions for automating forms processing and managing documents, and it introduced several customers, including Best Buy, National Semiconductor and Subway, who are working with HP to transform their imaging and printing operations.

"As more content and business processes go digital, there is a tremendous opportunity for companies to harness the power of the network to improve productivity and reduce the operating costs across their imaging and printing environments," said Vyomesh Joshi, executive vice president, Imaging and Printing Group, HP. "HP's printing heritage and network management expertise puts us in a unique position to help companies take advantage of these new opportunities."

According to Gartner analyst Peter Grant, "Poorly managed printer, copier and fax fleets represent one of the biggest opportunities for cost cutting in the enterprise. By actively managing the environment, companies can not only save up to 30 percent on output related spending, they can increase employee productivity."

Transforming the antiquated copier market

HP unveiled new products, capabilities and services to transform the traditional copier market by reducing the total costs of operation. On average, companies spend more than $800 per employee operating their copying and printing environments - up to $4 million a year for a 5,000-person organization.

HP's new solutions extend its Total Print Management offering, an integrated portfolio of intelligent devices, network manageability software and customizable services that can cut operation costs and significantly impact the bottom line. The new copier-based HP LaserJet 9055 and 9065 multi-function products (MFPs) feature HP's leading network manageability and trusted brand for quality and reliability. These products, as well as the new HP LaserJet 9085 MFP, extend what is perhaps the industry's most comprehensive imaging and printing product portfolio.

In addition, HP introduced the following management software, assessment capabilities and pay-per-use options, which together provide companies an extensive, system-level solution:

· HP Web Jetadmin 7.5 - the next generation of HP's leading imaging and printing fleet management software now with links to HP's new System Insight Manager. According to HP customer data, organizations using Web Jetadmin have reduced help desk and management costs by approximately 50 percent.


· Assessment capabilities and services - from Web-based, self-service tools to a comprehensive consulting assessment, these services help customers increase the utilization of output devices, improving user productivity and reducing costs.


· Scalable pay-per-use services and billing options give customers transparent and predictable choices in the purchase and management of their imaging and printing environments - from level pay to cost-per-page or pay-per-use services.
HP has assembled a comprehensive sales strategy that leverages the reach of direct and indirect channels. The new high-volume multi-function products will be available globally through HP Services with customizable managed services, consulting and integration, and support.

In addition, HP has signed an agreement with IKON Office Solutions, a leading player in the copier and document management market. The relationship will provide HP broad U.S. distribution and services expertise through IKON's 12,000 sales and service professionals. HP also announced seven regional partners to distribute the high-volume multi-function products.

"HP's move into high end, copier-centric MFPs is a natural step for HP as copiers and printers converge on the network," said Matthew J. Espe, chairman and chief executive officer, IKON Office Solutions. "HP's multi-function technology fits well with IKON's best-in-class document management solutions and services. Through our expanded relationship, HP and IKON customers will receive the benefit of HP network technology that they have come to know and trust, combined with the strength of IKON's document management expertise - all delivered through our national sales and service teams."

New document workflow solutions further automation and management

The new solutions in HP's portfolio are highlighted by innovative offerings to help companies improve their business processes and document workflow. These solutions include:

HP Forms Automation System, based on the new HP Digital Pen and Paper technology, enables enterprises to significantly accelerate paper forms processing and drastically reduce costs. It provides the experience of pen and paper, but with instant digital availability.

The offering is targeted at medium and large enterprises in healthcare, banking, insurance, manufacturing and the public sector, which represent an addressable $2 billion market processing 9 billion paper forms annually. HP printing technology, embedded into the HP Workflow Connect 200 server-based software, prints customized forms on demand using select HP LaserJet printers. Each form has a unique background pattern and is filled out using the HP Digital Pen 200. The captured information is automatically uploaded for instant processing.

With less than one-third the cost of traditional paper forms processing, the HP Forms Automation System transforms business processes while keeping the convenience, familiarity and mobility of pen and paper.


HP Digital Sending Software 3.0 Secure Workflow and HP Digital Sending Software 3.0 Workflow solutions expand the company's existing digital sending capabilities to include additional functionality. This enhanced software enables customers to capture content from network-enabled multi-function products. New features include secure access, secure workflow, enhanced document security and flexibility in document routing.


HP offers a solution for delivering intelligent documents based on HP Output Server and the Adobe® Intelligent Document Platform. The combination of HP and Adobe technology assures the multi-channel delivery of documents that can be integrated with core enterprise systems and shared or reused in business processes inside and outside the firewall.
More information about this announcement is available at http://www.hp.com/go/hpbusinessimagingandprinting

Maximize the sales of HP's imaging and printing products to targeted state & local government and K-12/Higher Education customers in Southern California. Develop and expand key customer relationships. Develop and execute sales plans that will maximize imaging and printing products, services, and solutions revenue to meet or exceed assigned quotas while ensuring the highest levels of customer satisfaction and customer experience. Responsibilities will include teaming with counterparts in a cross-functional, multi-organizational infrastructure to achieve goals. Provide a monthly sales funnel and forecast, including a continously updated customer database. Maintain HP profit expectations on all sales.

If I'm not mistaken, the new HP 55, 65, & 85 that are mentioned in the Articles above look a whole lot like the Monica (Konica-Minolta) 55, 65 & 85 machines. Could this be a relabling of Minolta that hp is trying...hummmm
I will try to attach the pictures for one of each and you can compare.

[This message was edited by Ted on Thu November 20 2003 at 07:45 AM.]

Ted:

Indeed they are the Konica Minolta boxes.

It wouldn't let me do two pictures. The one above is the hp9055mfp. The one in this post is the Minolta Di551. You Decide.

Also, how come no one ever relabels Ricohs? It is always the Minoltas and Toshibas that get relabeled. I would love to have the Ricohs out there relabeled. It's a lot easier to sell against your own relabeled product, than the competition's

What:

Ricoh's were relabled for years under gestetner, savin, pitney bowes, lanier. Just that Ricoh bought em all except for Pitney Bowes.

Lets not get too crazy!

Art

November 19, 2003
HP Lifts The Lid on Its Copier Business
By Matt Villano

In a move that signifies a direct challenge to Xerox for share of the digital copier market, Hewlett-Packard (Quote, Chart) Tuesday announced plans to enter the $24 billion copier business with new multi-function printing machines and software for managing them over corporate networks.

As part of the groundbreaking announcement, the Palo Alto, Calif.-based company unveiled an extensive portfolio of products, services, and capabilities to help companies improve productivity across the board. According to Vyomesh Joshi, executive vice president of HP's Imaging and Printing Group, the products also are designed to reduce costs by as much as 30 percent in corporate imaging and printing environments.

"There is a tremendous opportunity for companies to harness the power of the network to improve productivity and reduce the operating costs across their imaging and printing environments," Joshi said. "HP's printing heritage and network management expertise puts us in a unique position to help companies take advantage of these new opportunities."

HP is no stranger to the digital imaging world, but the most recent news comes just weeks after Xerox (Quote, Chart) announced new digital copying strategies of its own, and months and Lexmark (Quote, Chart) vowed to redouble efforts to cut into HP's printer business. While Joshi said he expects these companies to increase competition with lower prices on particular products, he stressed that HP's new solutions seek to reduce the total costs of operation.

In particular, the new HP approach extends the company's Total Print Management offering, in integrated portfolio of intelligent devices, network manageability software and customizable services that can cut operation costs significantly. The new copier-based HP LaserJet 9055 and 9065 multi-function products (MFPs), as well as the new HP LaserJet 9085, are all part of the new strategy. In addition, the company also introduced:


HP Web Jetadmin 7.5 the next generation of HP's imaging and printing fleet management software, now with links to HP's new System Insight Manager.
Scalable pay-per-use services and billing options that give customers transparent and predictable choices in purchasing.
Assessment capabilities and services such as Web-based self-service tools to a comprehensive consulting assessment designed to help customers increase utilization of output devices.
Joshi noted that all of the new devices would be networked together so they can be managed centrally, and said that built-in diagnostics will alert administrators when they need to refill ink or fix paper jams. He added that HP would introduce additional products that allow business customers to use digital pens to fill out forms and sign documents, as well as products that enable users to capture content from network-enabled multi-function products and send it inside or outside a firewall.

In conjunction with all of these new offerings, HP also announced that it has signed a distribution agreement with IKON Office Solutions (Quote, Chart) to provide HP access to more than 12,000 sales and service professionals right off the bat.

"HP's multi-function technology fits well with IKON's best-in-class document management solutions and services," said Matthew Espe, IKON CEO. "Through our expanded relationship, HP and IKON customers will receive the benefit of HP network technology that they have come to know and trust."

Early returns on some of HP's pilot runs have been mixed, but many indicate that HP customers are beginning to save big bucks. On average, industry statistics indicate that companies spend more than $800 per employee operating their copying and printing environments up to $4 million a year for a 5,000-person organization. With this in mind, Gartner (Quote, Chart) analyst Peter Grant says the HP products could save clients as much as 20 to 30 percent.

"Poorly managed printer, copier and fax fleets represent one of the biggest opportunities for cost-cutting in the enterprise," said Grant. "By actively managing the environment, companies can not only save on output-related spending, [but also] can increase employee productivity."

Don't forget that IBM also relabled Ricoh 850 for their AS400 if I am not mistaken.
JG