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Commentary: HP's printing lag time

Commercial printing represents a good opportunity for Hewlett-Packard, but first the company will need time to overcome several challenges.

By Peter Grant, Gartner Analyst

Commercial printing represents a good opportunity for Hewlett-Packard, but first the company will need time to overcome several challenges.

See news story:
HP sets sights on commercial printing
This opportunity appeals to HP because it involves selling high-end printers as well as the networks, desktop applications and other infrastructure that commercial printers would need to support them. To head its new commercial printer division, HP appointed Bill McGlynn, who oversaw tremendous growth in the company's laser-printer division.

Indigo, the relatively small printing vendor that HP recently acquired, will form a base from which to attack the commercial printing market. It offered an attractive takeover target, with solid technology and an impressive portfolio of patents in areas such as liquid electro-photographic printing, high-speed color and high-resolution printing.

However, HP has started small in a market with big, long-established competitors. It will take time to build up a presence to become competitive:

• HP introduced its first commercial printer--sourced from Indigo--only last June.

• HP started with seven people in its global sales staff. By comparison, Xerox, one of the leaders in this segment, has 3,000 experienced salespeople around the world. In addition, selling hundred-thousand-dollar machines and all the products and services that go with them will take different skills from those HP has used to sell desktop printers through its extensive network of resellers.

• HP must also beef up its service and support capabilities before it can win a significant portion of the market.

• The pending merger with Compaq Computer will likely cause some distraction.

Although HP has a sound vision and a good chance to bring in significant new revenue, Gartner believes it will take at least a year before the company starts to get traction in commercial printing.

(For a related commentary on HP's printing business, see gartner.com.)

Entire contents, Copyright © 2002 Gartner, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.