Canalys Channels Forum 2018 Spending $550m on Apogee was as much a defensive measure to stop rivals buying the print services dealer as it was to beef up its place in the copier market, HP Inc chief Dion Weisler has said.
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The transaction in August added a chunk of revenues and 824 new members of staff based in the UK, Ireland, Germany and France to HP – which only got into the A3 printer space via its buy of Samsung's printer biz in 2016.
Talking in front of an audience of IT resellers, managed service provider types and disties at Canalys Channels Forum ’18, Weisler responded to a question about the conflict this deal may create with those in its channel that sell copiers.
“When we got into [the A3 contractual market] we had less than 5 per cent market share,” he confirmed. “It’s important that we get to scale quickly. I don’t think you are relevant in a business unless you have 10 per cent market share.”
HP has amassed circa 9 per cent of a market that tends to buy the hardware and supplies under a services contract. “This business operates very differently in the contractual world to how the transactional business operated in the past. It is important for us to understand it intimately.”
Weisler said HP “came across” Apogee “who were for sale” and determined that “if we don’t acquire them one of our competitors will”.
A3 devices and the wider copier market sign contracts for three, five or seven years. “We would be yielding that machine in field population for a very long time. So as ... a defensive move, we acquired Apogee to help us learn and grow and to accelerate our sales there more quickly.”
Apogee was set up to run independently; it has its own board of directors – not HP people – and is getting the same Ts&Cs as other third party HP sellers.
“So I understand that people [in the channel] may be concerned in the room that we are in this business. We still do 87 per cent [business] through the channel and you should expect that we don’t change that composition largely at all.”
Apogee itself bought scandal-struck Danwood in 2017 to form a managed print services giant. Danwood was previously embroiled in an accountancy scandal that saw most of its senior people leave, and accounts restated. ®