2020 marks a new era in the commercial PC market with the expected arrival of widely deployed 5G connectivity — and HP Inc. is poised to be among the first to leverage the high-speed connectivity in laptops.
At CES 2020 this week, the PC giant announced the Elite Dragonfly G2, a business convertible that will feature optional 5G support when it launches this summer.
HP, in fact, has been laying the groundwork with a number of 4G/LTE-enabled notebooks—and has been seeing an increase in customers looking to connect their notebooks over cellular, said Alex Cho, president of HP's personal systems business, in an interview with CRN USA at CES in Las Vegas. "Then you add to that 5G and we think that will really accelerate that even more," Cho said.
Meanwhile, Cho shared that the addition of new security features will continue to be a major facet of HP's PC strategy in 2020, particularly after the acquisition of security vendor Bromium in September, and also discussed HP's plans for ensuring PC supply as Intel's CPU shortage drags on. Among other things, the ongoing constraints mean that "customers are more open to looking at alternatives" such as from AMD, Cho said.
What follows is an edited portion of Cho's conversation with CRN USA.
How are you aiming to keep up the commercial PC momentum in 2020?
Commercial momentum has been strong. There are a few different layers. One is, we are seeing that the response to our portfolio is very strong. And you know we've talked for several years around the office of the future, those changing trends in terms of the workforce, workplace and work styles. And we use insights to drive what we innovate on, and we build a total experience.
We also leverage the strength of communicating that and delivering that with our channel. That is coming together very well. Secondly, we do have the backdrop of the Windows 7 / Windows 10 refresh, which is a tailwind that we have right now. But those drivers for enabling the office of the future really stand on top of that, as well. That is happening within the context of constrained supply, which I know is on everyone's minds.
We are making progress on commercial. We're very happy that it's on the backs of real insight-driven innovation. We're happy that we're able to deliver that through the strength of partnership with our channel partners. And it could be even more in a less-constrained environment.
Do you foresee an expanded move to alternatives from AMD as a result of the Intel CPU shortages?
We're working very closely with Intel. They're a huge partner for us and very important. And so we're continuing to work very closely with them — and working with our customers and partners in navigating through where we have constraints. So, I'd say no change there. We're just staying very focused on maximizing what's available, and on working with partners and customers and Intel to do that. We already have a broad portfolio of AMD devices also. We have, I think, the broadest portfolio out there [for AMD devices]. And so having that as a choice for our customers is goodness for our customers, for our partners, for us. And so we'll continue to make that available. And, while there's no change in strategy, per se, I think the fact that one side is constrained, customers are more open to looking at alternatives. And AMD technology has really improved a lot. We're using all the partnerships across both parties to really maximize [supply].
You just announced your first 5G-enabled laptop, the Elite Dragonfly G2. What sort of opportunity do you see for laptops that support 5G?
Even before 5G, if you think about connectivity to date, it has been a growing part of what we think customers are looking for and of what we're offering. The connect rate has been growing for us in terms of LTE-optioned notebooks — it has been growing steadily. We're over-indexed by quite a bit to the average in the market. We have been investing in them. I think it's even more valuable than most people have internalized. We brought 4x4 antennas, which is really known in the cell phone world, into notebook designs by managing all the architectural requirements on our notebooks. So we've already been investing, and customers' connect rate has been growing. Then you add to that 5G, and we think that will really accelerate that even more. When we are studying where customers are using devices, where they want to use devices, what they're doing -- being more mobile, and the security of having a dedicated connection, and really the experience overall [are the priorities].
And ultimately it will be more than just, "let's download a little bit faster." That happens — but when you're more connected, it allows you to leverage more cloud resources. And that's a beautiful thing when you can leverage more resources for your experience. And today, WiFi-based threats are rampant. People are creating false public WiFi networks where vulnerabilities are introduced. So security is a great value proposition for [5G].
Do you see 5G coming to a lot more of your laptops in the future?
We will continue to make connectivity [a greater option]. And I'm using the word connectivity, because we're focused more on the experience — and today, that experience is probably the most pervasive in a 4G/LTE type of environment. 5G is still in the early stages of being rolled out in terms of coverage.
It's also in early stages in really having that level of throughput all the way through all the nodes. So since we're focused on customers, we're focused on the experience, we think connectivity and mobile connectivity. And so that will definitely be an increased part of what we think the customer experience is that we can deliver. 5G will be a part of that. And 5G and really that technology, millimeter wave, is a great enhancement. I think there is still some sequencing of when it will be pervasive enough in meaningful ways. So for us it will be a transition. But I do think [5G] will be an accelerant, definitely.
How will the Bromium acquisition have an impact on your PC security capabilities this year?
As we spend time with our customers and we try to solve their issues, security comes up all the time. And so that's why we've been investing in this area for a while, including bringing Bromium into the company last year. They had very unique technology, which for us we think is a basis by which we can scale even more, in terms of offering secure operating environments across our devices. What I love is they have some unique IP and technology and real expertise in the security space. And our strategy around security is around creating the most secure and manageable devices—out of the box. And that's what we're enabling today.
We've also announced that we're offering security-as-a-service, and taking our security assets and wrapping them into a device-as-a-service offering. Because security is one thing when you have it in the box—but if it's not managed, if it's not turned on, it's limited. And when you can offer it as a service, it's more valuable for a customer. So the key thing is we will continue to innovate in the device, and we'll take the security assets and the full breadth of what we can offer in security, and offer it as a service.
On device-as-a-service, what's ahead in the coming year for HP, particularly in terms of working with channel partners?
For us, device-as-a-service is fundamentally about automation. It's taking automation and AI in order to improve the management of a device. It reduces costs. As an example, now our customers are able to see a reduction in help desk by 30 percent. It's using AI and automation to help improve employee satisfaction and engagement. We are able to detect when devices are more prone to have a hard drive failure. We can identify and recover quickly from blue screens of death. That is a huge employee satisfaction enabler. And third is to use our platform to improve security. Reducing costs, improved productivity, improved security, through an automation platform. We've made good progress on continuing to build out that platform and show concretely to customers that we can enable those benefits. A key focus for us in the past year has been ensuring that we can scale this as capabilities that our channels can wrap their broader offering around. And that is probably a learning for us of how important it is to really design for channel scalability. That has been a very good body of work that we've been invested in. We see much more growth in the mid-market type of opportunities that our channels are engaged in, leveraging our platform. So I'm very pleased with that. I feel very good about that traction.
Will you be continuing to emphasize displays and accessories as major opportunities for partners this year?
Absolutely, yes. For our strategy, we've been very consistent in three pillars. One is that we will continue to reinvent computing experiences so that they're more meaningful for our customers. And we have plenty of proof points there. Secondly, we will continue to build more immersive ecosystems, displays, accessories — so that it enhances the customer experience and really enhances the shopping basket for our partners as well. And third is around tapping into services and solutions around that device. Again, those are designed for scale with our partners and allow not only upfront revenue and an expanded revenue basket, but an ongoing engagement, recurring revenue, with that customer.
Displays and accessories remain an important part of how we think we can bring value to our customers. We're designing for people who are using their PCs to create. [We're offering] displays that enhance that, accessories that enhance that. And again, for us it's about scale and enabling it so that it can be delivered through our partners as a key part of our value equation.
What areas could represent future innovation for HP that we haven't talked about?
For the technology domains of innovation, connectivity and 5G, we talked about that. We see that there's also a lot more innovation that will happen all around form factors, and you'll see that happening from us. This requires a lot of innovation on mechanicals and architecture and thermals, etcetera. You'll also see continued innovation in the area of security — below the OS, in the OS and above the OS as a part of that. And then the last thing I would say is, there'll be a lot of innovation really around what we call AI and automation platform — using data and building the right analytics engine and the AI engine to enhance the customer experience. That's whether it's the end customer or the IT manager managing it. And we focus that innovation around where people are using the PC to do a lot more creation.