Printers, and especially the ink that goes into them, represent a huge business for Hewlett-Packard: $23 billion last year. (HP’s Printing and Personal Systems Group, which will be separated from the enterprise division of the Palo Alto, California company in November 2015, had overall 2014 revenues of $57.3 billion.) However, the current ubiquity of mobile devices and transformation of workers on-the-go means that consumers’ print appetites have changed at home and in the home office.
Given this challenge and the rise of competition on the ink supply side, HP is moving boldly with the Internet of Things to keep its printers and ink household mainstays. But the company has even greater ambitions for the machines: making them a beachhead for other IoT-enabled services in the home. As a result, its ‘razorblade’ strategy of the past – where the majority of the profit comes from selling ink, not printers – is getting an update in the IoT age.
IoT technologies create the opportunity to turn almost any digital device into a service. “Hyper integration offers endless possibilities of connections and use models,” says Naresh Shanker, the named Chief Information Officer for HP Inc., the future printing and personal systems company after the Hewlett-Packard separation on November 1. “With IoT printers integrated with other IoT services, there are now millions of HP printers that can provide services in homes.”