HP’s Lores And Schell: New Structure Will Help Both Transactional Deals And Services

The company's expansion in areas such as Device as a Service and managed print services should benefit from the launch of a new commercial organization, executives tell CRN.

With the upcoming launch of a new organizational structure, HP Inc. is focused on continuing to drive transactional deals in its core PC and printer businesses while also accelerating the expansion to services, top HP executives told CRN.

HP will roll out its new commercial organization on Nov. 1, which will be headed by its first-ever chief commercial officer, HP veteran Christoph Schell. The move coincides with HP printing business president Enrique Lores taking the reins as CEO as current chief executive Dion Weisler steps down.

[Related: HP Partners: Lores Is A Channel Champion]

"We have opportunities to grow in the contractual space in office, where with A3 and with managed print services we have only started to grow. We have opportunities to grow both in the services space of personal systems, and also in exploring new compute models," Lores said in an exclusive interview with CRN. "So we clearly have a lot of opportunities there. And this is why we are investing in the future by creating capacity, by simplifying, while getting closer to our customers so we can provide a better experience."

HP’s new commercial organization will move the company from a three-region structure to a set of 10 geographic markets, which will each be led by a newly appointed managing director who will report to Schell. The Palo Alto, Calif.-based PC and printer giant currently splits its organization between the Americas region, the EMEA region, and the Asia-Pacific and Japan region.

For the new North America segment that will include the U.S. and Canada, HP is promoting Americas channel chief Stephanie Dismore to serve as the managing director, effective Nov. 1.

Importantly, the new commercial organization will be paired with "significant investments in tools and processes that are going to help us with digital transformation," Schell told CRN.

"That is something that we are driving together with our partners. So how do we engage in marketplaces? How do we move our business from transactional to contractual engagements? How do we use the data that our partners generate and our products generate in the market together, to basically manage a value proposition that matters to customers?" Schell said. "All of this transformation will be fueled by this change, and we will bring our partners into this change."

HP is seeking to expand its contractual services, such as Device as a Service and managed print services, hand-in-hand with the company’s solution provider partners, executives have said.

However, "when you drive a service-led business, you cannot throw headcount at this," Schell said. "You need to make the whole engagement smarter. So this whole idea about digital transformation—and managing digital engagements with an installed base of hardware that we service—that will really be a very big deal. So when we talk about digital transformation, that is a very big part of it. That will help us to pivot to contractual engagements much faster."

The launch of a new organizational structure at HP is a welcome move for channel partners, especially those that are offering services, said Juan Fernandez, vice president of managed IT services at ImageNet Consulting. HP recognized Oklahoma City, Okla.-based ImageNet with its top Device-as-a-Service partner award earlier this year.

"A lot of this change that we're seeing right now from HP is exciting because they're really leaning in with that services model," Fernandez said.

In particular, Fernandez said the new commercial organization should bring greater alignment between partners and HP on Device as a Service, which combines PC leases with HP's TechPulse software for proactive identification of device issues.

With Device as a Service, working with HP becomes "a relationship where we have to mutually manage a customer's expectations and deliverables," he said. "We're working together not just from a price perspective, but from a value-delivery perspective. I absolutely think that the new structure is complementary to that."

Jim Sullivan, CEO of Waltham, Mass.-based NWN, another solution provider heavily involved in Device as a Service with HP, said the change in organizational structure shows that HP’s focus “is the same as our focus."

"HP is now really doubling down [on services], and also making the right changes and the right moves, in the right focus areas," Sullivan said. "Customers have this requirement and need to be able to consume as Device as a Service. ... To watch [HP] make these moves, which can really help us together double down and accelerate to the market to help customers, is really exciting."

Pricing Consistency

Improving pricing consistency is another goal with the launch of the new organizational structure, Schell and Lores said.

"What you will see us invest into is really getting an idea of how to monitor pricing at a very sophisticated level, and how to make sure that we give and provide tools to those partners that are investing with us," Schell said.

For partners that are doing business across multiple countries, "this change will help them to have a more consistent approach with HP and simplify what it means to do business with us," Lores said.

Over time, partners will benefit from "a faster approach on how to deal with HP—an approach that is more digitally informed—at the same collaboration levels that we have today. But we need to evolve our go to market," he said.

Minimal Changes To Partner-Facing Roles

The HP executives said they do not expect major disruption to partners from the launch of the new organizational structure. In particular, channel-facing roles are expected to remain intact, the executives said.

"We are trying to keep the disruption at a partner and customer engagement level to an absolute minimum," Schell said.

While some personnel reductions are planned for HP as the company looks to reduce costs, as previously disclosed, the cuts will involve back-office positions, the executives said.

"As we go through this change, we are going to protect all the customer- and partner-facing people. Because we think that to continue to grow, we need those people," Lores said. "These are areas where we need to protect."

Lores also said the new organizational structure had been in the works for some time now and was planned regardless of the decision by Weisler, who is stepping down as CEO due to a family health matter.

"We are embarking on a multiyear transformation," Lores said.