David Murphy: Welcome to HP’s Educational Video Series. Hope you enjoy it.
Cary Sherburne: Hi, I’m Cary Sherburne, Senior Editor at WhatTheyThink.com, and I’m here with Avi Basu, who is the Manager of North American Business Development at HP. Welcome.
Avi Basu: Thank you Cary.
Cary: So, you know, HP is, of course, a big proponent of trying to transition as much volume from offset to digital, analog to digital as possible and I’ve heard a lot of statistics about, you know, how many trillions of offset pages there are that are, that are available out there. What’s the latest data that you guys are using?
Avi: From the big numbers perspective let me give you a couple of quick examples. So, from an HP perspective, part of what I do and the people I work with, we do, is we actually apply two different tactics in the marketplace. One is what we’re creating the pull aspect. And the pull aspect is, in many cases if you wait for the pages, for the right set of economic and other conditions to actually migrate to digital, some of us could be waiting a long time. That’s what our customers are telling us, that’s what many of what we call page owners are telling us. So many times they are looking for education, they are looking for how can I move these changes? Will it make business sense for me? And what is the economic impact of that? So we are actually working, we have specific experts working with, for example, some publishers who are never going to be our direct customers. We are working with certain enterprise customers who are not looking to buy HP equipment for this kind of applications, but they definitely want to transform their business and they want to figure out, how can digital play a role, not because they want to print a better book, which is certainly one case, but in many cases they want to complete reduce the working capital tied up in inventory out of obsolescence. So it’s a very different business step.
But if you are able to successfully do that, and there’s evidence in this last year we’ve done a great job in doing this, that page is **** migrates to our customers. And so what we have is this one, two punch. We go create the pull from the page owners and then we create the push with the printers. And where the two meet, that becomes really the transformal, addressable digital pages.
Cary: So in a way, you’re out there being an evangelist for your customers and doing a lot of the market education that is difficult for them to do.
Avi: Exactly. So we define our role as two parts: one part is business development. To be more precise, it’s our customer’s business development. What’s good for our customers is usually good for HP.
Avi: Right? And we both have a very common measure, more pages, more pages. Now, that’s one part. The other part we consider is market development, which is evangelist part you are talking about. And we have picked a few specific verticals that we feel we have some expertise, we have some contacts and we have a value proposition, so we are going on some specific verticals where we are creating market development activity and that’s how the two are coming together.
Cary: And so, can you talk about what those verticals are?
Avi: Sure. The ones that has probably the most amount of traction today is the publishing community. And within publishing community, for example, our initial estimate, as you know, as about 18months ago, we started shipping our first inkjet high speed digital presses as well. Which are an entirely different value proposition, especially for books and for magazines. And we have, by our own estimate, as of first quarter, first fiscal quarter of this year, which is November through January, in those three months along, our customers; the first few customers have printed 50 billion…
Cary: Billion with a “B.”
Avi: Yeah, there are 50 billion pages that have been identified with the publishers that are coming. They have actually printed 500 million already in the first quarter, the first three months. Sorry. Now what we believe are accessible to these publishers is about 50 billion pages over the next few years.
Cary: Wow, that’s great.
Avi: Now, this is according to estimates of the publishers themselves. WE are hoping over the next few years to access most of those on HP customers.
Cary: You know, and particularly in the book part of the publishing segment, I mean, the amount of waste in the supply chain is… has been huge. And how they’ve continued to operate with that, well, we just saw what happened with Borders.
Cary: You know. So it’s changing dramatically, so and beyond publishing?
Avi: Beyond publishing, the other area that we are focusing a lot on is the agencies themselves.
Avi: We’ve had actually some work that we’ve been doing, about the last 18 months; it all starts with a certain hypothesis because we have to figure out what makes sense for all the stakeholders in that supply chain, or in the value chain. It’s not just what’s right for HP or what’s right for our printing customers. So we have to go work with them to figure out where is this waste, where is the opportunity to transform. So that took us some time. We think you’ll hear more about this publicly in the next few weeks and months to come. So clearly, publishing is the one community we’re going after. We’re going after the agency which will impact certain the enterprise span and marketing span, we’re also going after certain brands, which you could argue is a function or a subset of enterprise, but that’s really to affect our label packaging business.
Avi: Those are three areas that we’re most focused on initially. And there will be two additional verticals we’re looking at, but we’ll talk more about that in the next few months to come.
Cary: We’ll look forward to it.
Cary: Thank you for sharing.
Avi: You bet.