The rumour mill kicked into high gear Tuesday afternoon, and by Wednesday morning, it was confirmed – HP will once again combine its Personal Systems Group and Imaging and Printing Group into a single entity.
The computing giant announced Wednesday morning that it will combine the two businesses under the Printing and Personal Systems Group banner, and under PSG chief Todd Bradley. The company said that IPG chief Vyomesh Joshi is retiring.
In a statement announcing the changes, the company said the realignment will “rationalize HP’s go-to-market strategy, branding, supply chain and customer support worldwide,” and will result in cost savings.
“This combination will bring together two businesses where HP has established global leadership,” said CEO Meg Whitman in the statement. “By providing the best in customer-focused innovation and operational efficiency, we believe we will create a winning scenario for customers, partners and shareholders.”
This isn’t the first time HP’s gone this route, of course. Former CEO Carly Fiorina made the same move in 2005, although that time it was Joshi who was tasked with managing the combined business. That experiment lasted all of half a year, with the decision to combine the businesses being reversed by new CEO Mark Hurd, who brought in Bradley to head up PSG.
On the positive side, if done right, the deal could reduce overhead for both divisions, and create a more tightly integrated story and message between its PC and printing businesses. That could be particularly powerful in the consumer field, driving up attach rates between PC and printer sales.
But there are some caveats. While the deal may strengthen the transactional side of the printing business, HP executives have been touting the message to make print contractual and not transactional. Will the combined business unit be able to continue to turn up the volume on the managed print business? That will definitely be something to keep an eye on as the groups come together.
The relatively radical move also seems to fly in the face of Whitman’s “steady hand on the tiller” message.
There are also a number of unanswered questions posed for the company’s channel partners, and its subsidiary businesses worldwide. In Canada, for example, the company has business leaders (Leyland Brown and Lloyd Bryant) and channel leaders (John Cammalleri and Patrick Harrison) for PSG and IPG, respectively. Will that structure continue in subsidiaries, or will the printing business in Canada also be rolled up into PSG?
Is this really the end of the line for the iconic “VJ”? It seems unlikely, although it’s hard to imagine the 31-year HP veteran showing up elsewhere at this point. But it’s almost as hard to envision HP’s printing business without VJ as it is to envision VJ without HP’s printing business. At the company’s Global Partner Conference last month, Joshi noted that in his time at HP, he’s seen IPG grown “from $0 to $26 billion in revenues with partners’ help.”
In a statement announcing the changes, CEO Meg Whitman said Joshi “embodies the spirit of HP and his impact on the company has been tremendous.”
“Under his leadership, IPG accelerated innovation and pioneered solutions that transformed the printing market,” she said in a statement. “We wish him the very best as he embarks on a new chapter in his life.”
Changes are inevitable in business. Still, it’s more than a little sad to see the executive most responsible for making IPG into a money-making machine for HP for most of a decade – and the company’s last strong personal connections to founders Hewlett and Packard – leave at a time when the printing business is less profitable than it was in years gone by.
The company also announced other streamlining effects Wednesday morning, sending its Global Account Sales organization to David Donatelli’s HP Enterprise Group, and bringing all of its marketing functions across very business groups under CMO Marty Homlish. Likewise, HP’s communications teams worldwide will be brought together under Chief Communications Officer Henry Gomez
“Ensuring we have the right organizational structure in place is a critical first step in driving improved execution, and increasing effectiveness and efficiency,” Whitman said in HP’s prepared statement. “The result will be a faster, more streamlined, performance-driven HP that is customer focused and poised to capitalize on rapidly shifting industry trends.”