Hewlett-Packard Printer King Guns for Systems

DQI Bureau
New Update


went through much change in 1999-00, in India as in the world. In the US, Carly

Fiorina took over; in India, CEO Ganesh Ayyar had his first full year. The test

and measurements division became the Agilent subsidiary, then separated from HP

India in November.


HP India has dominated the printers

market for years, with other imaging and storage peripherals adding to the

figures in recent years. With the kind of market share it enjoys in peripherals,

it was clear that any significant growth would have to come from elsewhere.


1999-00, HP focused on corporate desktop PC volumes, and enterprise systems and

storage. CEO Ayyar also took charge of the crucial enterprise systems business,

after VP Stacy Plemmons returned to HP Singapore.


  • Downplay ‘printer company’; push systems
  • Build desktop volumes with aggressive pricing
  • Get PC server numbers; high-end systems and storage revenues
  • Develop, promote e-strategy, e-speak tech.


  • Grossed Rs 1,138 crore (excl Agilent)
  • Growth up sharply from 16% to 94%
  • Crossed 60,000 PCs; top MNC PC vendor in Q1 2000.

HP announced its e-speak technology and

said it was an e-space innovator and pioneer. Somehow, it didn’t s-speak loud

enough, and those

who heard wondered what the technology was about. Ignoring the traditionally

weak HP marketing of the message, e-speak is a compelling idea, a sort of

business transaction protocol that will allow ebiz sites and others to

seamlessly share information. Microsoft may well have picked its .net idea from

e-speak, but Redmond spoke louder and clearer.

The group in India now includes two

companies: Delhi-based HP India (the computers, services and peripherals

business) and the Bangalore-based Indian Software Operation (ISO).

Corporate desktop PCs jumped ahead,

after HP decided a year earlier to compete head-on with Compaq’s pricing. Part

of this was the older Vectra lineage, but the numbers came from the

  • START-UP YEAR: 1989
  • PRODUCTS AND SERVICES: Printers, servers, Workstations, PCs and

  • ADDRESS: Chandiwala Estate, Maa Anandmai Marg, Kalkaji, New Delhi

  • TEL: 6826000
  • FAX: 6826059

low-priced Brio. So successful was it

that nearly a third of it probably went into consumer markets, instead of HP’s

Pavilion home PCs. Based on standard, outsourced designs, the Brio is an MNC

brand at a very low cost, helped by local assembly in

Bangalore. It pushed HP’s PC numbers to over 60,000 in

1999-00, with sales touching 25,000 units in 2000’s first quarter (IDC
estimates)–making HP the leading MNC PC brand in India in that quarter.

HP in India will follow global HP plans

for bazaars for wireless e-services such as personal banking or stock trading

for mobile users–using HP ISO in Bangalore as a base. HP is also pushing

servers and services to ISPs and ASPs, with its new HP-UX 11i OS upgrade for the

HP 9000 servers. The low-end NetServers are however the most successful in

India, with at least one sub-Rs 1 lakh model made in Bangalore.

Peripherals continue to be a big chunk

of HP revenues in India, with DeskJets and LaserJets almost level in their

contributions. The inkjet market, with high numbers, low prices and razor-thin

margins, is especially important for the consumables revenues that add to HP’s

bottomline. Portables is not yet a focus area, and HP sold only about 600

Omnibook notebooks in corporate deals. Distributor HOPE also sells a few HP


HP India will continue to try and build corporate

desktop numbers, and services and enterprise systems. It will also consolidate

its storage revenues and margins, while protecting its peripherals turf from an

aggressive Epson et al. But the challenge will be to make its presence felt in

the increasingly crowded world of e-biz infrastructure providers. DQ