Recharger Magazine

HP’s Acquisition of Printelligent: Does It Signal a Changing Attitude Toward the Imaging Aftermarket?

This guest blog was contributed by Luke Goldberg

By now we are all aware that HP has acquired Printelligent, a direct-to-SME MPS provider in Utah. Others have written that this portends HP’s desire to migrate its MPS business down into the SME/SMB market. I certainly agree with this analysis, but I have some other questions about the implications of this acquisition as well as what it means for the aftermarket and HP’S MPS strategy.

For time immemorial in our industry, HP has been like the father who spawned us but now beats us and barely tolerates our existence. HP spends untold sums propagandizing that our products are inferior and even offers a 20 percent discount on its website in exchange for negative testimonials against our industry.

Bottom line is this: Those of us who participate in the business and do it the right way by respecting the intellectual property of OEMs and offering consumers a choice feel we deserve at least a chance at a peaceful coexistence. Now HP has purchased a company that has been firmly entrenched in the imaging aftermarket for 20-plus years – no less a remanufacturer – which, when you look at HP’s marketing, is certainly not viewed in the most positive light.

We are all wondering if HP will allow this small business to continue to offer its MPS clients remanufactured toners. Printelligent built its business and programs around having a low-cost offering to its clients that offered savings versus the OEM on a CPP basis. Will HP continue with this? If indeed the company does, clearly this is a positive signal for the entire segment of the industry that HP has lambasted for so long. We hear from industry participants close to Printelligent that the company will indeed continue remanufacturing and offering remanufactured products to its customer base. Maybe this signals an end to HP’s negative marketing against us? I believe this acquisition also signals that HP tacitly recognizes the value to consumers that our business offers. It has lost 25-30 percent share to us and probably acknowledges that we are here to stay and that consumers have ultimately spoken with their pocketbooks. If you are HP, why not be both the dominant OEM and an embracer of consumer choice, recognizing us finally as a viable alternative?

When we look at how other OEMs participate in MPS, almost without exception it’s a “brand-agnostic“ approach that includes both OEM and aftermarket supplies as part of their programs. To date, to the best of my knowledge, only HP and Lexmark haven’t embraced brand–agnostic approaches in their programs. A change is signaled not only by this acquisition but also from new HP MPS marketing information titled “HP vision for MPS differentiation,” which states that one of the tenets for the future of MPS for them is a multivendor approach. From HP’s perspective, maybe the company didn’t feel the need to be as flexible, since its hardware offerings are strong in segments 1-5 and now even includes A3, whereas other OEMs on the copier side cede segments 1-3 to laser and play on their strengths in multifunctional and finishing options as well as A3 capability.

Even if this acquisition doesn’t signal a shift to brand–agnostic MPS approaches, maybe it does signal a shift in attitude toward the aftermarket. Dad may not pat us on the back and say, “Atta boy,” but at least he will not be kicking us in the rear. The best thing for us and for HP, which once again proves that sometimes our interests aren’t mutually exclusive, would be for HP to offer its SME clients continued access to aftermarket consumables as well as OEM ones along with its class-leading hardware and service options.

We will be watching closely to see how it all plays out.

Contact Luke Goldberg at 800-673-4968 or e-mail lukeg@mse.com.

Posted by Luke Goldberg on Jul 01, 2011