Memo: HP To Bet Big On 3-D Printing With New Business Unit, Leadership

The future HP Inc., which combines the PC and printing business of Hewlett-Packard, is forming a new business group to prepare for the upcoming explosion in demand for 3-D printing, according to an HP internal memo.

The new 3D Printing business group is being formed to help HP Inc. take advantage of the "next industrial revolution" that is 3-D printing, according to the memo, which was addressed to all HP Inc. employees from Dion Weisler, executive vice president of HP's printing and personal systems.

Hewlett-Packard on Nov. 1 is scheduled to split into two companies. The enterprise infrastructure part of HP, including its Helion cloud business, will be known as Hewlett Packard Enterprise. The rest of HP, centered primarily around its printing and PC business, will be known as HP Inc.

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Weisler will be the president and CEO of HP Inc.

An HP spokesperson declined to comment when contacted by CRN.

News of the new 3D Printing business group was first reported by Re/Code.

Weisler, in the Sept. 2 memo, a copy of which was examined by CRN, said that 3-D printing is a very important source of future growth for HP.

"When we announced our plans to separate, we knew that 3D printing would be a key area of innovation and growth for HP Inc. Our company is positioned perfectly to take advantage of our sophisticated intellectual property and know-how to transform industries and power the next industrial revolution," the memo from Weisler stated.

3-D printing is absolutely important for HP Inc.'s future, said Rich Baldwin, chief information officer and chief strategy officer at Nth Generation Computing, a San Diego-based solution provider and longtime HP channel partner.

"HP already has a lot of great intellectual property when you look at printing," Baldwin told CRN. "In the past, we have already been hearing that HP is working on 3-D printing technology much faster than anything existing today, and on technology with higher precision than ever."

With the new 3D Printing business group, HP appears to be laying the groundwork for a great future business, Baldwin said. "This is revolutionary technology," he said. "There are so many demands for 3-D printing, both in industry and in the home."

Baldwin said the 3-D printing industry is ripe for a major vendor. "This is exciting news," he said. "I don't believe any big printer players are in this business. There are a lot of niche players. But HP has the wherewithal to scale the business from the low end to the enterprise."

Heading the new 3-D Printing business group and its associated center of excellence is Stephen Nigro, the memo from Weisler stated. Nigro, who currently serves as senior vice president of imaging and printing at HP, will be focused on 3-D printing going forward, Weisler wrote.

"He will focus on establishing a leadership position for HP Inc., in both the prototyping and production 3D market by delivering a strong portfolio of technology, products, and services to drive the market," he wrote.

Nigro will be replaced by Enrique Lores, the current senior vice president and general manager for HP's business personal systems, Weisler wrote. Lores was in the past a printing engineer, he wrote.

It seems that HP Inc. is betting a big part of its future on the 3-D printing business, said Jan Baldwin, CEO of Nth Generation.

"HP's PC business is falling, but its 3-D printing business will grow in the future," Baldwin told CRN.

Indeed, HP last month reported that its PC revenue in its third fiscal quarter of 2015, which ended July 31, fell 13.0 percent year over year, and had a margin of 3.0 percent. Unit sales fell 11 percent during that time. The company's printing revenue, on the other hand, fell 9.0 percent in the same period, and had a margin of 17.8 percent. Unit shipments fell 2.0 percent.

Text of the internal memo from Weisler, titled "Leadership changes to power our future," follows on the next page.

I have always said that a company’s strategy needs to be considered across multiple dimensions. In order to build a long-term sustainable company, you have to have the right mix of core business, growth initiatives, and have a vision for the future. The short-term core initiatives and growth areas are more tactical and day-to-day in nature, while the long-term future must be fully nurtured through investment, commitment, and focus.

Leading up to the separation, one of the key milestones is our Securities Analyst Meeting (SAM) which will be held on September 15th. In organizing the SAM presentations I characterized our business opportunities into three categories: Core, Growth, and our Future. In this process it became apparent to me that we needed to put the right investments and organizational structure in place to enable our Future. I am convinced that we have the technology, capability, and know-how to get this done, but need to back it up with the right organizational design to achieve our ambitious goals. As a result, I am making adjustments to my leadership team structure so that we can successfully deliver on our short, medium, and long-term strategic and financial goals.

When we announced our plans to separate, we knew that 3D printing would be a key area of innovation and growth for HP Inc. Our company is positioned perfectly to take advantage of our sophisticated intellectual property and know-how to transform industries and power the next industrial revolution.

As our first 3D printing product nears commercial availability, I’m creating a new 3D Printing business group and center of excellence - in the same way Bill and Dave did when they needed to innovate and capture new market opportunities for HP. Given the importance we’re placing on this business, we needed the right leadership, focus and organizational structure to drive this organization. With that in mind, I have asked Stephen Nigro to turn his entire focus to 3D Printing, continuing to report to me. He will focus on establishing a leadership position for HP Inc., in both the prototyping and production 3D market by delivering a strong portfolio of technology, products, and services to drive the market.

Stephen is one of our most talented engineers, innovators, and business leaders, with experience in both Labs and in running a business unit. Stephen has a proven track record in consistently turning technologies into great products. In collaboration with Shane Wall and the CTO/Labs team, the Printing organization, and ecosystem leaders, Stephen will drive a sharp focus on ensuring HP Inc., realizes this tremendous opportunity and establishes us as the clear market leader in this space.

With Stephen moving to 3D Printing, I have asked Enrique Lores to shift his focus from EMEA to the critical role running our Imaging and Printing and Solutions business. Enrique was a logical choice to lead this business group and continue the work Stephen and his team have been driving to combine innovation with aggressive operational execution to return this business to growth. Enrique grew up as a printing engineer, and over the years learned this business backwards and forwards. With his most recent work in leading our separation, he has a unique end-to-end view of the entire company that will enable him to forge forward aggressively. I am confident he will do what needs to be done and am pleased that such a great leader can now have the opportunity to develop his career by running the largest profit contributing business in the company.

With Stephen and Enrique moving into these new roles, we had the opportunity to make some other leadership changes that I think will help accelerate our business. We have a highly seasoned and proven regional leader in Nick Lazaridis who will move to lead the EMEA region and help grow and develop the business in this critical market. After several successful years leading the APJ region, Nick will expand on his experience and achievements working across complex markets and different cultures in order to now lead our EMEA business to success.

Having run our business at a country level and currently heading a large function, Richard Bailey will move to lead the APJ region. This will enable him to grow and develop his general management skills with the responsibility of delivering the financial and strategic results every quarter.

The Solutions team and the organizations reporting to Gilbert Rossi, Bill Avey, Mike Weir, Andrew Joiner, and Dan Salzman will join Enrique’s printing organization, and Jan Riecher, Dennis Mark, and Dave Prezzano will be responsible for regional Solutions, reporting to the region leaders. Moving Solutions into the Imaging and Printing business group will enable synergies we haven’t fully captured as software and services become even more relevant and important to our overall strategy.

The Customer Service & Support team will report into Jon Flaxman’s Strategy and Business Management organization. Teams led by Lachelle Porter-Ainer, John Moses, Robert Casey, Ramesh Giri, Axel Wolff as well as the regional teams led by Dave Smith, Aps Mukherjee, and Joan Canigueral will all report into a new Customer Support leader to be named soon.

All of these organizational changes will be effective as we become a new company on November 1st. In the meantime, I ask all of you to focus on delivering in our current model through the end of FY15.

As a firm believer in career development, I couldn’t be more excited about these changes. They not only make sense given the skills and experience of the leaders involved, but they also highlight the strength, broad scope, and utility of our leadership team. This new structure will also provide the opportunity for many others throughout the organization to ’step up’ into new roles.

As an organization, we have to invest in our talent and create development opportunities for our people. I expect all of our leaders and managers to help their teams learn and grow every single day, just as I am doing with mine.

I ask all of you to join our first HP Inc. All Employee Meeting at 9:00am Pacific today; we’ll address these changes and discuss how we’re creating a new HP. A replay will be available at the same link.

Cheers
Dion

PUBLISHED SEPT. 2, 2015