By Ed Crowley November 3, 2003 -- Like Hewlett-Packard's acquisition of Indigo a while back, the recent HP-Konica-Minolta agreement raises questions for which there are no immediate answers. Is this simply a one-time deal to fill a gap in HP's product line (segment 3, 4, 5 copiers / Multi Function Printers), or a more strategic relationship? And one has to wonder how Canon feels about HP pursuing the market populated by the bread-and-butter ' branded product, the Image Runner MFPs. It is important to remember this is not the first HP/Konica alliance, nor HP's first attempt to penetrate the workgroup MFP space. HP first allied with Konica for the HP Color LaserJet in the mid 1990s. This was HP's first non-Canon engine and many thought this might signal a rift in the HP/Canon relationship. However, the alliance produced resulted in just two engines being provided by Konica (the HP Color LaserJet and HP Color LaserJet 5) with subsequent color engines coming from Canon. HP's foray into workgroup MFPs began in 1996 (remember the Mopier?) Since then, HP has had success in the inkjet and lower-end laser MFPs (i.e. LJ3300 series). Here they can leverage their brand name and strength using their familiar sales channels and support model. On the other hand, their series of workgroup MFP products has been less successful, perhaps because the HP name doesn't carry quite the same weight in the copier-centric NOMDA/BTA channel as it did for printers. Still, HP knows the enterprise/workgroup MFP market represents significant potential for imaging products--thus their new alliance with Konica/Minolta. And it is a strategy that makes a lot of sense for three reasons: First Konica/Minolta has a broad line of high end MFP / copier engines with both mono and color laser technologies. This broad MFP line coupled with HPs low-end MFP technology and single-function printer line will be a strong portfolio. By combining HP's controller expertise with these engines, HP could produce some very competitive products relative to Canon, Xerox and Ricoh, the current powerhouses in workgroup MFP land. In addition a full MFP product line would allow HP to leverage their brand recognition and strength into a new market. Second The traditional MFP outlet, the BTA channel of office equipment/copier dealers, has evolved. These firms have gained the skills necessary to compete in a networked imaging environment, and they have begun taking on more traditional IT reseller characteristics. This more familiar territory provides an opportunity for HP to play hero and help build this new IT-oriented BTA channel. Third Customers are changing. In the “old days” IT managers purchased printers and purchasing agents purchased copiers. Today this distinction is blurred, if not gone completely. These days installed copiers and single function printers are replaced with MFPs. These MFPs are inevitably networked to maximize the value of the investment by improving workflow. Purchasing and IT will be more often working together in a quest to obtain the best ROI for their company. The vendor that offers both full product line choice and networking expertise will be a winner. The real question is what working with Konica ultimately means for future Canon/HP relations. Konica/Minolta provides HP a viable engine-supplier alternative to Canon, particularly for the other major growth segment, color laser printers. And since Konica/Minolta has been successful in capturing the number two position in the color laser printer market, one would believe they see revenue potential in ousting Canon as supplier of HP's color laser engines. One could envision a successful relationship for MFP's leading to an expanding to include color laser printers and possibly even to mono laser printers. Time will tell. Many thanks to Tom O'Neill for his contributions to this article. Tom is a long time veteran of the copier market.