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HP Quietly Withdraws Document Router From the Market

Thursday, August 09, 2001

Press release from the issuing company

According to The Gartner Group, Hewlett-Packard (HP) has stopped selling a bundled version of the distributed output management (DOM) software from its subsidiary Dazel. HP will help customers buy and implement the software separately, but they could end up paying more. On 1 August 2001, HP decided to withdraw the Document Router — i.e., software from Dazel bundled on an appliance platform — from the market. HP made no formal announcement, but says it has alerted its Document Router customers and channel partners. First Take Having recently announced that it will lay off up to 6,000 workers, HP tried to minimize bad press by not formally announcing the withdrawal of Document Router. HP began offering the product in 2000 in response to the relatively high prices of Dazel's unbundled product, Output Server. Now HP has dropped the Router because the product had lower demand than other products (e.g., HP Print Server Appliance) and HP faced some tough choices. HP originally targeted the midmarket to gain share, but Gartner observed large enterprises considering these routers rather than buying Dazel's Output Server software separately. Gartner believes that the Document Router in effect lowered the profit margin for Dazel without a compensatory rise in sales volume. HP had also underestimated the cost and time required to integrate the Document Router in midrange environments. Finally, the economic slowdown reduced the resources that HP and its partners could commit to this product, and HP had to divert scarce R&D resources back to the core product. Nevertheless, HP did not make this decision easily. It must take back inventory from its channel partners, and it will give money back to Document Router customers or convert them to Dazel Output Server. The latter move raises pricing concerns as HP's decision about the Router means that the vendor has not yet addressed the high pricing structure for Dazel's software two years after acquiring the company (see Research Note E-08-5793 "HP Acquires Dazel: Bold but Necessary Move"). Document Router customers could end up paying more (although HP says they will receive software similar to the Document Router). Enterprises evaluating the Document Router should stop doing so as HP no longer sells it. Document Router customers should discuss remedies with HP, including a refund or replacement of the Router with standard Dazel software. Because Document Router will have limited support, customers should cut their losses and move to Output Server or more competitively priced DOM products (e.g., IBM's InfoPrint Server and Macro4's Columbus for Output Management).




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