A major piece of news in recently has been the decision of HP not to exhibit at the IPEX trade show in London in 2014. This announcement comes shortly after the close of drupa where HP indicated that it had a successful show for all its products where it had been the show’s largest exhibitor. Ronen Zioni, the market development director of HP EMEA (Europe, Middle East & Africa) graphic solutions business indicated the reasons that HP had chosen to withdraw from IPEX. He stated that it was a purely strategic decision rather than a budgetary one. He indicated the decision was very much linked to shifting more resources towards more regionally focussed applications centric, customer engaging and business development projects. (I think that answer comes straight out the marketing speak handbook for MBA graduates!)

I’m afraid I just don’t buy into what is being stated and I will outline my reasons below. HP is in the process of major change. Its substantial and successful Imaging and Printing Group (IPG) that is responsible for all printing activities from the desktop to the very high-volume T-Series inkjet presses, has been incorporated within the Personal Systems Group (PSG). As part of this IPG’s inspirational leader Vyomesh Joshi (VJ) who has driven IPG’s growth and strategy over a number of years, has left the company. This new combined group comes under Executive VP Todd Bradley, the head of PSG. PSG has not exactly had a stellar growth for some time and runs with low margins under the pressure from Far Eastern competitors. The rationale for this merger, or should we say takeover, is stated as IPG sells printers both to consumers and businesses, and PSG sells PCs to consumers and businesses, therefore making more operational sense combined than apart. This shows a total lack of understanding at the top level of management of HP of the nature of the graphic arts business. Graphic arts and creative companies don’t buy their DesignJets, HP Indigo presses or T-Series inkjet presses from the same largely online sales operations where they buy their PCs or enterprise servers.

Meg Whitman, HP’s latest CEO, the third CEO in the past three years, has instigated a massive cost cutting programme throughout the company aiming to cut 27,000 jobs by 2014 with the intention of saving $3.5 billion. The company’s strategic focus for the future is in defined as being the cloud, data and security as it moves to define more of its business in the services area. It is interesting to see how ideas for the future change rapidly with each new CEO within the company. The previous CEO, Leo Apotheker was pushing a strategy of getting rid of the Personal Systems Group and moving aggressively to become a services company. Obviously Whitman is looking for key growth areas for the future of HP but she must be careful not to reduce the importance of the business’s cash cows that must fund the change in strategy.