 Okay, we're back live here in Las Vegas, Nevada, for HP Discover 2012. I'm John Furrier, this is theCUBE. SiliconANGLE.tv's production, we go out to the events and extract a single from the noise. I'm here, join with my co-host. I'm Dave Vellante of Wikimonde.org, and we're here with Bruce Dahlgren. Now Bruce is in the imaging and printing group. He's Senior Vice President of the Enterprise side of that business. Welcome to theCUBE. Thanks, it's good to be here. Great to have you, John. And again, you're excited. You got, you know, your old stomping ground, HP printing, I mean, I go back, my history in HP printing goes back, you know, 1988, 89, back in the old days, series two, LaserJet, and I'll see that the story history from HP really is, and I've been on record and blogging about it, saying that if it wasn't for the LaserJet, HP would have been like data general and deck, digital equipment corporation, a mini computer company that wouldn't have made it and LaserJet has created such great wealth for, not only just HP, channel partners and distribution channels, save their PC business and a lot of people just don't know that history and spawn the ink jets and the office jets and that whole franchise has really generated a lot of revenue for the company and that, but printing's changing. We had earlier discussion today with the GM of the printer group and we're talking about the business models where the expansion of the role of printing from just standalone printer to network printers now to completely cloud different user experiences, different business use cases for driving essentially new economics and new opportunities. That's what you do. You connect printing as a commodity into essentially enterprises and business functions. So explain to the folks out there, basically what this new, not really new, it's just really an extension of a connected workforce. Sure, sure. I think the way that I would describe it, if you think back over the last 25 years or so, a lot of infrastructure built up in the enterprises. Printers, copiers, fax scanning and all of this can be brought together in a multi-function device. But the customers want to be able to handle it different. They want it to be more strategic. And so over the last several years we've built a great solution, probably one of the best growth stories really in the industry and certainly for HP called Manage Print Service. And we can come in and manage that environment for them, make it much more productive, take up to 30% of the cost out and all of a sudden now, customers are starting to look at this as being a lot more strategic. Yeah, and that's natural evolution. I mean, I talked to a bunch of customers about their printing environment over the years and the budgets are huge. When you got toner costs, you got hardware costs and there's a whole green factor, even though you got the sleep mode and all this, still printers everywhere, right? But people are working at home, they're on the go, you got cloud. So it just makes sense, right? That printing will be cannibalized a bit. Now you have a new revenue stream and a new business model that the market's dictating which is give me stuff on the go, give me that matches my workflow. Can you explain some of the examples of what you guys are seeing these successes? You know, I think one of the exciting things about this is that the ideas come from our customers and to give you an idea and manage print service today around the globe, we have over 3,100 customers, over $9 billion of contract value. We annually manage over 25 billion pages and what the customers are saying is, you know, Bruce, that's really great that you're helping us and you can do all this but that's really focused in on the office and today I have my workforce, they're mobile, they're on the go, they're virtual, they're traveling and I want to be able to tie this management service into, you know, the way that our employees operate and so what we did is working with HP Labs, we developed this e-print enterprise and it's a great example, quite frankly, of bringing all of the power of HP through management service into a way to help our customers be more efficient and quite frankly, more productive. Well we've seen a bunch of carnage in this area, honestly Xerox never really crossed over but they were going to that, you know, on the copier model, you know, coming in from the outsourcing services back when you had copy centers, you know, I think that was the multifunction version of Xerox but in a way this is kind of where they missed the opportunity and you're kind of stepping in. Can you just talk about that, is it accurate, is it different, how different is it? Well, you know, the two models, the copier and the printer model really developed in different ways, right? The copier model was high acquisition price, low cost per copy, the printer industry grew up with the low acquisition price and then the annuity streams of supplies. It's interesting, this managed print service really brings those two business models together and allows us to manage this in a services capability but in a distributed fleet of devices. We had Ron Coughlin on earlier, the SVP, GM of the LaserJet group and I asked him and he didn't really answer the question because he kind of dodged it. We liked Ron by the way, he was fantastic. We were really thinking about the glory days but it was really in context of something that Google announced, Google announced their cloud print initiative and it's kind of out there, no one really kind of knows what it is but they're really targeting developers. So I asked them about the developers. Is there a developer focus in this program? Is it all churned key? Is it prefabricated? What are some of the relationships? Sure, let me give you a sense and this is again a great example of the power of HP and HP Labs and the work that my team has done. I'm really proud of this. You know, we talked about these end users, these enterprises on the go. Just to give you an idea, say there's seven billion people in the world, what, six billion mobile phones? Almost a billion of those are smartphones and what we were thinking through is, isn't there a way that we could leverage the cloud with all the security that customers need and find a way for these mobile users, these virtual workers, to be able to print from their smartphone and we absolutely did that. What's really exciting about this is that, you know, with just a very simple three clicks an end user can take their smartphone, be able to select what they're going to print, send it into the secure cloud, our private cloud for HP and then select a public print location, something like a FedEx office location or we just announced UPS as another partner of ours, Hilton Hotels. And then they can, like a GPS, find a device while they're on the go, be able to then download that print to that public print location and that device that they've selected and then go and retrieve it. Now you might say, well, isn't there a concern, right? If they go- Is that public or within the firewall or both? Well, it's both. So we could do it in one of their offices and of course this is all part of management service or it could be in a public environment. And a lot of the customers came back and said, this is really good, but we need the security. Like we don't want to have something being printed out in Hong Kong by accident, you know? So what we did is we took all of the security features that we have like pull printing or access control and what happens is through the cloud, we send an authentication code back to the smartphone and then that end user takes that authentication code and when they go to that public print location, they input that so it knows who they are and then the print comes out. So, okay, within the enterprise, I got that. So I'm going to buy that Hong Kong thing, it's a good example, right? You don't want your photos and or documents, you know, kind of leaking in the cloud. So today I would keep it up to myself. Hold on, hold on. I need to answer the question, developers. So is there a developer program, you guys working with developers, come and develop, I'm building an app. Say I'm building an Instagram-like app and I want to have photos of my consumer. It's just a natural consumer. As a public consumer, can I use the print service and say I want to print to say the UPS office or something? Absolutely, I misunderstood. Yeah, absolutely. So there's really two options here, right? You can download this app on your smartphone. We handle all the smartphones, Android, et cetera, Apple, BlackBerry and if you aren't an MPS customer but you want to use this, you can download that application and certainly you can print to a public print location. Now, if you're a part of MPS and it's inside the contract and our agreement, now you can print emails, you can do all of that work that you're describing and then of course it's all secure. So that concept of the public print location is intriguing. So what I would do today, I email it to my Gmail account, right? And I go find a laptop or something and then hopefully there's a printer there. Absolutely. So what you're describing is better but it's almost like finding a hotspot a couple years ago. Exactly. Well, to give you an example, today we have over 21,000 public print locations and it continues to expand. I mentioned UPS, we just added 4,300 with UPS and this is a benefit for them because right, customers are coming into their store, into their locations. It's certainly a benefit for our MPS offer and it keeps these people productive. I give you an interesting statistic since introducing this and hasn't been out that long, over 1.7 million downloads already and we anticipate doubling every six months. Do you have a breakdown on consumer like non-enterprise? Well, the ones that I'm tracking of course are enterprise. So I don't have the statistics on the others but I can tell you, interesting, you're talking about different uses for this and we can track this obviously in what they're printing and you talk about consumerization of IT, 70% of the downloads have been documents like you'd expect, emails, contracts, et cetera, 30% are photos and it's interesting that 30% of our photos are typically on the weekend and so what we're finding is that these people are using this e-print as an opportunity. It's a real chain game changer because that's the preferred user experience and we have other stats that we've gathered like ESPN's mobile usage, 75% of their usage is on the weekends and mobile. That must make sense, you're on the go, checking scores. So the consumer aspect is pretty interesting. How do you guys handle that? Is this mobile behind that? Is it more transaction fee at the edge for this location? Well, again, now I'm coming from the enterprise side but certainly we want to make this application available to our consumers so there isn't a cost for the application and we're encouraging them to print, print responsibly, print the things that they need. On the enterprise side, it works within the MPS contract. So just as they pay us for the use or for the things they print, they would pay us of course if they printed through e-print. Have you seen some cannibalization with the printer business on the standalone connected printer and the managed services? If the use case is changing, is there some slight cannibalization on the product side that you're making up on the service? Oh, without a doubt. Clearly if we're going to save our customers 30%, some of that's predicated on less printing, right? What we want to do is get them to print smart and really what this comes down to is that if you look at the environment, print, copy, all of this coming together, we want to help them reduce that but we want to ultimately benefit by being able to provide them the expression eat your own before the competition does, right? You know, cannibalize your own business and throw it another way. Remember too, there's a lot of upside in additional services. There's upside in applications, workflow, security applications. There's ways for us to streamline paper costs. Yeah, Ron was teasing us the information governance and some of the document management challenges that you guys are now getting into around compliance and autonomy acquisitions. Think of the multi-function devices and on and off ramp into the network. A way to go from hard copy to digital and back to hard copy. We should talk about 30% was photo. Yeah, you were intrigued by that. I can tell you. Very much so, and so I'm intrigued by the dividing line between the consumer and the enterprise. So that's an enterprise stat, or is that? That's of the downloads that we are able to track through our cloud, that's correct. Okay, so some of those are enterprise that you don't really know, right? Well, they're obviously customers. But enterprise customers have consumer apps, right? Of course, of course. No, I'm not suggesting the photos aren't for work. They could be. They could be. Right, I'm sure they could be. But so, the reason for my question is we've had that hotspot analogy. I'm thinking Starbucks. We're going to start seeing these kind of services in- Absolutely, in fact, we continue to expand our public print locations. Walmart, I mentioned Hilton. We look at airline lounges as a great example. And of course, with the launch, we've just announced a couple of enhancements. One of those that's really important is now 10 languages around the world. Because that 1.7 downloads that I was talking about are all English. And what we realized with this thing expanding and growing so much, that we needed to get into more languages and be able to expand this globally. Another key aspect is, you know, people sometimes go into an office and they want to be productive in that office. They're a virtual worker. So we've created, in a sense, a guest pass through E-Print that allows them to go into that office and in a controlled, secure environment, be able to print through E-Print so you're not passing files or putting them on thumb drives and all those other things that are less secure. All right, fantastic. A lot of innovation beyond color, John. Hey, it's an exciting thing, you know? And we're very, I tell you, this is a growth area for us. We're growing managed print service. And then when you add things like this E-Print and you now allow people to be able to be more productive on the road, this thing just continues to grow for us. I'm just excited to have the printer guys come on theCUBE because we tend to be much more, you know, conversion networking, enterprise, you know, real tech geeks around this conversation. But I got to say, if you look at what HP's done with multi-function peripherals in the history, Office Chat was a breakthrough product that everyone was like, ah, what? Facts printing in one. Really interesting that they created that kind of category. Here at the cloud, you can open up the functions behind the door. Security. Think about, I've been in the IT industry 27 years now and kind of a transplant into the printer group, right? From other areas. And I think the real power here is leveraging all the aspects of HP. So we talked about cloud, but think of software. Think of the benefits of scanning this and now being into disk storage and helping with document management. Think of the capabilities we have around service offerings and all of the extensions that we can now play out. So this is not like the old printing group anymore. This is very much a part of all the things that HP is doing. You know, I always make the argument, I've been obviously a big vocal proponent of HP not spinning out their PC and their printer business. For a lot of the reasons that we're talking about is that if you look at the synergies that you bring to the channel, access to customers on both the direct and indirect side, it's phenomenally huge. And a lot of people don't understand even Wall Street doesn't understand that. But what we're talking about here is really a huge growth market where the printer business looks like a commodity consumer business, but actually is an enabler on the enterprise side. So, you know, just another reason to keep the printer division intact. We believe that. We'll do the analysis. David, I've been talking about this for a long time. I'll tell you something. I was doing an interview a while back and they said, well, can I explain this whole thing if you're printing less? And I said, no, the way I would say it is we want customers to print responsibly. I said it's like a beer commercial. You know, we're not telling you not to print. We're just telling you to print responsibly. Fantastic. All right, Bruce Dahlgren, thanks very much for coming inside theCUBE, sharing the perspectives. Like John said, it's a new dimension for us. We really appreciate the angles. David. John, thanks. You're welcome. Keep it right there. We'll be right back with more coverage from HP Discover. We're live. This is theCUBE, SiliconAngle.tv. Keep it right there.