Friday, January 30, 2009

Lyra Symposium 2009 - The Death of Edgeline

Two years ago Edgeline was all you heard about.

HP had set their eyes on the copier world again and this time it was different.

This time HP has it's own machine, not some "duct taped" apparition.

This time HP was in charge of the channel, not partnering with a non-committal, old school dealer channel.

With Edgeline and an existing VAR channel, The Death of The Copier was just around the corner.

The machine utilized ink, did not use heat, corona wires, or static.

Demos were conducted, partners and service technicians trained.

Awards like the "Must See ‘em award" at the Graph Expo trade show, the “Technology Award” from the Microsoft Vendor Program (MSVP) and kudos from no less than BLI came rolling in.

Elite dealers made unit commitments - the world was their oyster.

The world waited -

And waited.

Fast forward to January, 2009. More specifically to the last session of the three day Lyra 2009 Symposium.

On stage sits the panel of esteemed financial pundits who specialize in analyzing the print industry. Keith Bachman, Managing Director and Senior Research Analyst Enterprise Hardware and Imaging BMO Capital Markets, Rob Sethre, CEO Woodford Group, Charles LeCompte, President Lyra Research, and Shannon Cross, Managing Director IT Hardware and Imaging Technology Cross Research.

Someone from the audience asks about HP Edgeline.

The panel does not hold back.

Phrases like,
"...the Edgeline has had no success at all..."

and proven to be an "objective failure" or HP is at best "...persistent at their failure..." seem to echo off the dark blue velvet back drop.

Of course, it didn't help that HP just announced the "relocation" of Edgeline R/D from Vancouver to Singapore. No, that did not help at all.

Edgeline falls within in IPG so the discussion blossoms once again with phrases like,

"...IPG is getting decimated..."

because "...Hurd is now focusing on IPG...trimming the fat..." so IPG can be "...more nimble..." especially when "...there is no more growth coming from the cash-cow..."

As bad as all this is, and deservedly so, there is a silver lining of sorts. It is expressed that no other firm in the world would be able to absorb such a disappointment. Additionally, it was commonly believed that HP will "do something" to get into and ultimately dominate the copier market.

As for suggestions on how HP could do just that - Shannon Cross in a wonderfully abrupt and direct manner clearly stated,

"HP should buy Canon."

She followed up with, "they should buy Xerox...but there would be dominance issues." I believe alluding to the monopolistic aspects of such an occurrence.

HP Should Buy Canon - that is the take away from this session.

An acquisition like this would allow HP to own outright, their laser engines and give them some sort of foothold in the copier industry. But, in light of the relative strength and dominance Ricoh will soon have in the industry, the question has to be, does HP have enough guts to get into the fray?

If only HP had a gutsy-type guy at the helm...

UPDATES:

The Death of the HP CM8060 with Edgeline Technology has been Greatly Exagerated


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6 comments:

  1. I can't see HP buying Canon but they have to do something. Some type of partnership between HP and Canon would be interesting, specifically to forge a partnership at the major account level to combat Ricoh/IKON. Even with the size of HP the idea of them purchasing a company the size of Canon seems pretty unlikely. With the brand strength of both they would be a dangerous combined sales force. Let's face it, both companies have to do something.

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  2. I also don't see HP buying Canon. As one of the "elite" dealers selling the EdgeLine product, I can honestly say that the product has its downfalls, but it is a first generation product. It's starting to be placed in more locations and eventually will make its place in the market. Nevertheless, dealing with HP is like pulling teeth. They are very unorganized and I feel they make most of their business based on reputation alone...A Canon/HP partnership is intriguing, but potentially deadly, from an organization and management perspective.

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  3. Yes -

    At first it does not seem likely that HP would pony up and buy Canon.

    I must often remind myself, that mergers are designed with one thing in mind - increasing the value of the company - opposed to "opening new channels".

    It's about ROI and earnings per share.

    So the questions are, will an acquisition of Canon make HP a better company for it's stock holders or will organically building a bigger channel for Edgeline make HP a better company for it's stock holders or would getting out of Edgeline and give up all hope of ever "dominating" the very mature, "copier" industry make HP a better company for it's stock holders.

    Great Comments, keep coming back...

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  4. HP didn't stand a chance with Edgeline considering the high price point, low (non-existent) service level and inability to overcome the laser bias in the workplace.

    Most recently I heard that the entire Edgeline team has been laid off (unconfirmed).

    HP/Xerox would be a good fit but I don't foresee that happening anytime soon, especially considering the integration focus that still needs to take place with EDS. Buying is easy, integration is much harder, and execution is paramount. Something to watch as Ricoh integrates IKON.

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  5. Joy -

    Thanks for commenting.

    You swerve into more of a "symptom" than a cause of Edgeline's "slow start" - Pricing.

    When service is provided by the partner (not HP direct) and the Selling Professional correctly schooled in spotting a good fit for the Edgeline, the complete solution is bullet-proof.

    The Edgeline can be sold, save the client money AND still provide a reasonable amount of margin.

    Pricing does not become an issue, nor does the "laser bias".

    It's all about finding the right fit - or knowing where to look and how to articulate the value - it's not for everyone. (selling professionals and customers)

    Current copier dealers, manufactures and BTA channel players have been through this; they "cut their teeth" on the issues of pricing, supplies, service, leasing, CPC, etc. decades ago.

    HP is new to this world and it shows.

    They are just too big to ignore but, once, so was IBM.

    good insight, keep coming back...

    g

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  6. I never knew that there was so much competition between these companies, I didn't know that HP was even thinking of buying out Canon or even that they were in need of been bought over, the only company that I have heard about that are not doing fantastically well is Zerox

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