7. HEWLETT-PACKARD INDIA: Still the Printers King



AFTER jumping 93% a year ago, this was a middling sort of year for HP India, with below-average growth. Its MNC competitors grew 51%, the Top 20’s systems vendors averaged 43%, and even its big three distributors grew 66%. 

In small part, HP may have suffered from movements. Ganesh Ayyar gave way to Arun K Thiagarajan (earlier CEO of Wipro Infotech) in January. The new CEO stayed on in Bangalore, and over the months, managers in the consumer, education and other divisions moved to
Bangalore.

SWOT

  • Strength: Brand, unbeatable printers position, can draw on large product protfolio
  • Weakness: Low systems margins from Brios. No services. Gaps: High-end server vacuum. Low home PC sales, no portables
  • Opportunity: Storage, services. Leverage Brio success for services, servers, portables 
  • Threat: Cheaper local PCs, more aggressive MNC competitors, emerging services players

PERFORMANCE 
HIGHLIGHTS

  • Sharp fall in growth
  • Undisputed printers leader
  • New CEO takes over; several divisions and managers move to Bangalore
  • Major Unix server and PC desktop sales to banks
  • Now first to ship Itanium-based servers

FACT SHEET

President: Arun Thiagarajan
START-UP YEAR: 1989 PRODUCTS & SERVICES: Printers, Servers, Workstations, PCs and services 

EMPLOYEES:
320 
BRANCH OFFICES:
5 ADDRESS: Chandiwala Estate, Maa Anandmai Marg,
Kalkaji, New Delhi 110019 

TEL:
6826000 FAX: 6826059 WEBSITE: www.hp.com

The bigger issue was the systems portfolio and its gaps. Zero top-end server sales (the Superdome has not sold in India) left a gap in the financial sector, which Compaq et al filled. Low-end (Rs 10 lakh) Unix servers were missing–Sun again did very well here. Consumer PCs were weak–its Pavilion home PC is years behind Compaq’s Presario presence. It’s not a player in portables. The Brio made it big, but low margins make it a dangerous game for HP to rely too much on price.

HP’s major Unix sales happened to Oriental Bank of Commerce and Punjab National Bank for branch automation, BPL for its ISP services roll-out and Citibank for data-center consolidation. ICICI and Citibank were major storage customers, as also Hughes Software. PC customers included the Karnataka Schools project (with NIIT), Central Bank of India and Bank of Baroda. 

HP’s real strength remains in its traditional peripherals area. It dominates inkjet and laser printers so decisively that the only position any other company aspires to is number two. Its position was further helped by Epson’s weak showing last year. HP also strengthened other segments, including scanners, CD drives, media and consumables.

The big opportunities ahead for HP lie in services, and servers. It was the first vendor to actually ship Itanium-based servers in July, making a smooth transition ahead from PA-RISC to IA64 for its HP9000 servers.

This year, when HP India, like much of the industry, is reeling from margins and cash flow issues, services will be the key. HP has been slow here. It plans to step on it, through HP Services, moving to services in financial, manufacturing and telecom sectors. The other focus will be on the big growth area of storage. Both of these will be the key to growth and health in the
year ahead for HP.

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