CRN Exclusive: CEO Weisler On Reinventing HP, Market-Share Gains, And 'Creating The Future' With Partners

Weisler On The HP Innovation Offensive

HP CEO Dion Weisler says the company's two consecutive quarters of sales growth for PCs and printers is being driven by a no-holds-barred focus on innovation.

That innovation offensive has led to what Weisler calls the "flat-out" best product portfolio in the company's history. That led to a 12 percent increase in sales in the PC business and a 6 percent increase in sales in the printer business in the most recent quarter.

"I think what is most impressive about it is it is off the back of incredible products and innovations," Weisler told CRN. "That is what makes me the most confident. There is no sort of one-quarter magic pill here."

"Reinvent" is the theme for HP's World Partner Forum being held in Chicago from Sept. 11-13. "The channel is undergoing a reinvention all its own and we need to be a partner that enables that, whether it is through training and teaching them how to sell solutions or providing a platform for them."

Get all of CRN's HP Reinvent World Partner Forum here.

Talk about the results from the most recent quarter including the 12 percent growth in PC sales.

It wasn't just PCs. It was outstanding execution across the whole business creating the future together with our partners. I don't think there is a company out there doing more with and through the partners than us.

The key highlights of the quarter: stabilizing supplies revenue a quarter earlier than we expected. That is really important for the channel. Posting double-digit revenue growth for the whole company -- 12 percent for personal systems. We delivered non-GAAP EPS at the high end of the outlook range, and we generated $1.7 billion in free cash flow.

This is the second consecutive quarter where both our core markets – PC and printing -- showed growth. We had broad-based growth in all regions: double-digit in EMEA [Europe, Middle East and Africa] and APJ [Asia-Pacific and Japan] but incredible share gains by Americas in personal systems in both consumer and commercial.

We delivered short term and we are investing for the long term and really, I think, striking the right balance for how we plan, how we innovate and how we execute on the strategy.

What are you most proud of when you look at the results?

I think what is most impressive about it is it is off the back of incredible products and innovations. That is what makes me the most confident. There is no sort of one-quarter magic pill here.

We had growth in every region – Americas up 8 percent, EMEA up 10 percent, APJ up 15 percent. Impressive personal systems performance. Consumer [personal systems] revenue was up 14 percent, and commercial revenue was up 11 percent. We had share gains in every single region. We had product category strength -- notebooks and workstations were up double digits year over year. Also, desktops returned to growth. That is something we have been working on for a while with the channel.

Talk about the printer business momentum.

We are really optimistic about print. Revenue was up 6 percent year over year with execution generating the momentum we are seeing.

Of course, the business is all about supplies. We achieved supply stabilization a quarter earlier [than anticipated]. Our supplies revenue was up 10 percent year over year as reported or 2 percent after adjusting for currency in the supplies sales model.

We had really strong performance with continued revenue growth in the key strategic areas of managed print services, which our channel heavily participates in, and in our graphics business.

We see enrolling growth for instant ink [subscription] as well as the retention of our instant ink customers, [which] is really important as we expand into more regions in mature markets.

What kind of progress are you making in the 3-D printing market?

We launched our 3-D printers in APJ. That is the world's largest manufacturing market today. We are excited about that. We have 45 resellers now selling our 3-D printing solutions and 20 reference and experience centers.

What is your message to partners on reinventing the future?

We remain extremely focused on our partners. They are a natural extension of us. We have always been that way. Of course, we increased our penetration with and through the channel since we became HP Inc.

With regards to the Office of the Future, end-user customer needs are changing. In many organizations, there are up to five generations of employees. The needs and wants of a young fresh university graduate is very different in many cases than one of our incredibly experienced folks that have been with a company for 30 to 40 years. As a result of that, the dynamics inside an organization are changing. We, of course, need to reflect that.

Specifically, how are the organizational dynamics changing?

Everybody is living one life today. No matter what generation you belong to, your consumer and your commercial lives are blending together. So our products and services need to reflect that. On the one hand, it can manifest itself in the sprinkles of magic that we add into products -- whether it be through the incredible innovation the team is delivering around security or in the design of the product which has to fit and be a representation of your personal life.

Then there are the use cases inside the Office of the Future – often a very open [workspace] plan with a lot of collaboration going on. So then there are sprinkles of magic going on around the audio quality being able to block out sound around you on personal systems and how printers should behave in the future as well.

Talk about Device-as-a-Service and how the market is moving from transactional to contractual.

Customers are looking to consume products differently in the future. They are moving away from the very transactional models to a much more contractual model. This is really where our partner community adds enormous value. We are able to get much closer to our customers. They are able to add additional services that complement our base foundational offering with everything as a service. That is really important as we think about our customers and their transformation journey in the future.

Where are the share gains coming from as HP closes in on shipping one of every four PCs in a $333 billion market?

We are on the way to one in four. Share gains are not the objective. They are an outcome of a lot of hard work the teams are doing from the business unit to the supply chain to the incredible work that the sales team is doing every single day with our partners and customers. There is no single magic pill here. It is all about really hard work.

I don't know what our competitors are doing, but I know what we do: We gather a lot of insights from our customers. We involve them in our design processes, whether it be industrial design and features that make their way into the products.

Talk about the price increases around commodity components and how HP dealt with that.

We got ahead of the curve on industry changes that were happening with supply chain and commodity costs and shortages and leveraged our balance sheet to ensure that we had adequate supply for our customers.

We had the tough conversations with our customers, explaining the value of our products. We also remain very flexible as we work together with the channel to think about how we can reconfigure the offerings for our customers. And our customers are sticking with us. Not only are they sticking with us, they are valuing the innovation inside the products and that is translating to share gains faster than the competition.

How do you feel today versus four years ago when you took over the PC and printer business?

Of course, four years in this business is 28 years in any other business. It operates in dog years.

As a company now we are incredibly different than what we were back then. The main thing we did is we reinvented ourselves in every single area of our business.

We took a hard look in the mirror and we said we are far from perfect and we will never reach perfection, but we need to continue to raise the bar and we need to start by using our mouth and ears in relative proportion to which the Lord gave them to us.

That means we start off with customer insights: What are our customers telling us and we connect that with technological changes that can enable different types of solutions in the future, and we marry the two together to make our products really relevant and differentiated.

We went to work on the hard things that matter most to our customers, whether it be industrial design or security or the ability to have the right portfolio where the heat is in the market and where we can add value to our customers.

How did the focus with regard to share gains change when you took the helm?

We stopped chasing market share for share's sake and we focused on adding value and innovation into our products. We worked right across the organization to stitch the seams between the various divisions, whether it is the work of the three regional presidents working every single day tied -- joined at the hip -- with our business unit leaders.

Our business unit leaders are also joined at the hip with our supply chain and with the support of the functions really reinventing every single process – taking cost out of the system and driving it into innovation. There is no single magic pill here, just a lot of really hard work.

How much has the partner channel been reinvented with the move from transactional to contractual models?

The channel is having to reinvent itself as end customers are looking for very different value propositions.

The channel is undergoing a reinvention all its own and we need to be a partner that enables that, whether it is through training and teaching them how to sell solutions or providing a platform for them.

Everybody is reinventing themselves and our channel and sales operations team and all of the channel leaders in each of the regions are reinventing how the channel works every single day.

What is your mood as you get ready to address partners at the partner conference?

I couldn't be more upbeat about our future. I think the team is doing an incredible job of executing against the strategy. And remember, the strategy straddles three time horizons: there is the here and now in the core; there is the growth opportunities in the short to medium term over the next two to three years whether it be with A3, graphics, commercial mobility and everything as a service; and then the third time horizon of three to 10 years plus around immersive computing and 3-D printing.

Our best days lie ahead because we are executing against all of those time dimensions and all those pillars of the strategy. Are we ever satisfied? No we are not because we believe that we always have much more work to do. We need to remain humble, listen to our customers and continue to innovate. And innovation is what is so exciting -- when we can innovate and our customers value our innovation and they order our products and we get 10 percent growth year over year. That is the best reward our entire team can get.