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Monday, September 14, 2009

Canon and HP Announce Alliance - the Silence is Over and The Questions Begin

HP and Canon will share technology enhancing their existing partnership. HP will start selling Canon products by the end of the year; these units will carry the Canon placard, eventually switching over to the blue "HP".
"HP will now have the full line of hardware to bring to the customer," said Bruce Dahlgren, senior vice president of sales and services in HP's IPG. "And [Canon] will be able to leverage our managed print service as a way to get their copiers sold."

For months, maybe a year, the industry has predicted this and waited - this is a big deal. Maybe not as big as the IKON/Ricoh assimilation, but still big. 

I am sure more will be out in the following days and weeks answering questions like: 

How will this work with the existing VAR channel?
Indeed, is this for the Enterprise (HP direct) business only? 
Does this now open up all Canon dealers to HP? 
Does this now allow all HP SVIP/OPS VARs access to the Canon/HP line?

Canon and HP: A Response to Ricoh/IKON?

Canon U.S.A. Acquires San Francisco-Based NEWCAL Industries

A press release from Canon. (Source: Business Wire)trackingCanon Inc. (NYSE: CAJ) and HP (NYSE: HPQ) today announced an expanded alliance to jointly market and distribute a new range of multifunction office systems that unite the best of both companies: Canon's leading multifunction devices and HP's enterprise printing and imaging assets. 

The alliance builds on an established relationship between Canon and HP, and positions the companies to offer customers a new class of web-enabled solutions that combine Canon's superior multifunction device processing and imaging systems with HP's leading device manageability, IT integration and office workflow capabilities. 

With the broader range of software and service offerings supported by EDS, an HP company, along with Managed Print Services from HP and Canon's global Services and Support offerings, enterprise customers now have access to one of the most complete offerings in the industry, delivering improved efficiencies and greater cost savings. This alliance includes current and future product portfolios from both companies, providing customers greater fleet compatibility across their entire office printing infrastructures. 

Canon and HP also will benefit from access to each other's management and third-party development software portfolios, including Canon imageWARE Enterprise Management Console and Canon MEAP as well as HP Web Jetadmin and the HP Open Extensibility Platform. The expanded portfolio of products and services is expected to be available to customers in North America and Europe, as well as global customers from these regions. 

"Through this new alliance with HP, we look forward to bringing the advantages of Canon's high-versatility, high-performance multifunction products to an expanded user base," said Masaki Nakaoka, managing director and chief executive, Office Imaging Products Operations, Canon Inc. 

"We expect this will maximize benefits for both companies' customers while also paving the way to increased growth for both Canon and HP." "HP has long been an industry leader with a portfolio of products, software, services and solutions that enable enterprise customers worldwide to improve their imaging and printing efficiencies without compromising the reliability, quality or professionalism of their documents," said David Murphy, senior vice president, Imaging and Printing Group, HP.

"In growing our relationship with Canon to offer customers value-added and more holistic IT solutions, we are confident organizations will enhance productivity with their imaging and printing and overall business workflow needs."

Ricoh to Buy IKON - Shot Heard Around the World


  1. Geez, I was out on the 8th hole today when this came across the news wire! I know you'd bet me on this one!! LOL

    And yes, many questions will come out of this deal? I feel for all the new dealers that Canon signed since Ricoh took Ikon. These dealers now not only have to comepete against there own products but now instead having and inpet IKON to deal with they have the marketing powerhouse of HP!

    Take a peek at some of the questions I posted, many ripples ahead for both Canon and HP and probably the rest of the industry as well!

  2. You did it!!
    100% hit in januari analysis!

    What will be next, Konica, Oce, Toshiba, Sharp, ...?

  3. Oce has already put itself on the sales block, but so far hasn't had any takers. The biggest question I have about HP/Canon is who is going to service the equipment nationally? HP strugges to service their own printers on a national level and the HP MFPs were a disaster. Canon USA doesn't have a nationwide service organization so when your MFP breaks, who do you call?

  4. Jon -

    The details have not come out, but rumor has it that service will be provided by Canon.

    And the scuttlebutt is HP Enterprise (IPG Direct) will have access to the product line.

    Just rumors at this point.

  5. Why does it matter? HP can't sell HP never mind Canon. Canon now selling HP? With the exception of the EdgeLine bust, everything is open market. Get in line.

  6. Max - well said.

    "HP can't sell HP..." -

  7. I admit, this will be a game changer. But... in most offices that I see, procurement of MFPs is usally done by procurement or the office manager, and procurement of printers is done by IT. HP failed in the past because it's very difficult to switch from selling to IT to selling to office managers and vice versa. But the team will definitley be formidable.

  8. Anon - you are correct that most MFP's WERE purchased through purchasing and MFPs through IT.

    If this is the current acquisition model at a company, they are most likely NOT a good MPS lead.

    Real MPS occurs when only ONE Decision Making Entity handles both MFP and single function output devices.

    And you are correct, HP and others, have had difficulty crossing the divide from Purchasing to IT.

    I think that is why HP mentioned EDS.

    I believe that HP will first go after the "low hanging fruit" in their corporate, enterprise-sized IT/EDS accounts. Offering a complete hardware line.

    As far as the SMB(office managers as decision makers) the flexibility of a VAR Channel is a significant advantage that HP direct has never and will never own.


    Thanks for reading, keep coming back.

  9. Dear Anom - not providing your real name is probably the only intelligence you displayed in your comment.

    PS - I think Wal-Mart is hiring for customer greeters.

  10. Back to the service questions. Canon USA really doesn't have end user field service except through Canon Business Solutions (CBS) and it can not be deemed anything near nationwide. Since the biggest market for HP is going to be areas which don't have strong dealer presences already, I see this as a big problem. In areas where there are good dealers, companies are going to already be dealing with them and are unlikely to switch to HP just because "IT likes HP." Can you imagine having to wait days for service when your copier breaks? You can't cross ship a copier for depot service.

    The copier has become a commodity and loyaly to a dealer is based on how well you are serviced. IKON continues to pick off service contracts on Canon color machines even though IKON is not a certified Canon dealer. Why is that? Very little of the installed base left IKON when Canon dropped them because the companies did not want to lose their current service techs. Service is everything.

  11. Jon - all very interesting points.

    CBS as the service arm? And only in a few geographic areas?

    Authorizing the HP VAR channel may not provide much more coverage either.

    We shall see...

  12. Canon U.S.A. does, in fact, have its own national field service organization through its Systems and Technical Support Division based out of the five regional headquarters and one out of its national headquarters in Lake Success, NY. Its independent dealer channel also paticipate in a program called CAPP, which is an alliance aimed at servicing customers nationwide.

    I also wanted to mention that MANY an IKON service contract has been "captured" by Canon independent dealers throughout the US via a promotional program offered to independent dealers by Canon U.S.A.

    Service IS everything. That is why Canon enforces a four hour response rule that means for a delaer to be able to sell into a certain locality, it MUST be able to be on-site within four hours. A dealer MUST also have in inventory a certain number of specific parts and supplies. Failure to comply with any of these WILL result in revocation of the dealer's Office Imaging Contract with Canon U.S.A.

    Side note - with the proliferation of Canon's MEAP technology and other integrated solutions - IT has become an integral part of the solutions sale and weighs heavily in the decision making process.

    - From a former Canon U.S.A. employee and current Director of Professional Services at an independent Canon dealer.

  13. "And [Canon] will be able to leverage our managed print service as a way to get their copiers sold."

    Wow! That one line steals the cake! I don't know whether I'm shocked at fact someone actually said that or that it's the truth ;-)

    I don't balk lightly at a company the size of HP... that brings significant forces to bear on the market. The same could be said for just about any of "big boys". They are all just like battleships bringing their guns around.

    However, this deal seems to wreak of necessity (e.g. Monica-Danka and a few others) instead of strategic (X-GIS/Rikon). Eh, I don't know the inside scoop - but I'm hard pressed to see how this is match made in heaven or how it is ultimately good for the customer.

    Wait, didn't we just learn about "too big to fail" somewhere? Oh yeah... I remember now.


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