HP Amplify Partner Conference Touts AI, Hybrid Work And Supply Chain

By Patrick Moorhead - April 6, 2024

In all the decades I’ve followed HP, it has been a strongly partner- and channel-oriented company, and this month in Las Vegas it reinforced that approach during its Amplify Partner Conference. As HP and its ecosystem partners work to maximize the opportunities created by AI—especially the AI PC—the company is doubling down on investments in its partner programs to build agility, resiliency and speed.

Both in his keynote and when he sat down to talk with us on The Six Five Podcast, CEO Enrique Lores emphasized HP’s focus on “the combination of AI and hybrid work and how we are going to be able to improve productivity.” At the same time, he said, the company is intent on improving employee satisfaction in this new hybrid work era, and it wants to “help CIOs to manage the very complex world they’re facing. . . . That’s the big opportunity we have.”

These messages were echoed and expanded throughout the conference by other HP executives and by a killer lineup of tech CEOs who addressed the audience of 1,500-plus partners from around the world. These included Pat Gelsinger of Intel, Satya Nadella of Microsoft, Cristiano Amon of Qualcomm, Sundar Pichai of Google, Jensen Huang of Nvidia and Lisa Su of AMD.

Innovating At The Intersection Of Hybrid Work And AI

Lores compared the transformative force of AI to previous tech revolutions wrought by the PC, the Web, ubiquitous mobile devices and cloud computing. “I have been in technology for a long time,” he told me. “Every 10 years there is a huge change, and we think [AI] is the change now. And probably the implications will be even deeper than the implications of other changes because it is not only going to be about technology, it’s going to have a fundamental impact on how we work as individuals.”

In his keynote, Lores talked about how HP can play a vital role in this change by improving productivity, but also by helping its business customers “solve one of the biggest problems that all our companies are going through.” He meant the tensions around hybrid work that have arisen since the start of the pandemic. “From one side, we see employees that value flexibility, that value the opportunity to work both from the office and from home,” he said. And yet, “this is [often] in contradiction to what we need to do from a company perspective. We need to continue to improve our performance. We need to continue to drive productivity.”

This tension is weighing on employees, as reflected in an analysis HP recently completed, which showed that only 28% of the people interviewed said they had a healthy relationship with work. A slightly smaller fraction of respondents said that their employers were giving them the tools, processes and support they need to succeed. “We don’t think this is stable,” Lores said. “And this is where we think we can have a major impact. We can, through technology, provide the tools that will build the bridge between what companies need and what employees are demanding. That’s the opportunity that we have as a company.”

Specifically, Lores believes that HP has “an opportunity to create personalized experiences that will provide employees what they want” by using AI to help them be more productive, collaborative and flexible in their work. At the same time, HP can supply CIOs with tools to help measure and improve the performance of their teams while reducing costs and increasing employee satisfaction.

It Takes An Ecosystem To Maximize AI

Praising its partners is more than lip service for HP, which gets 85% of its revenue through channel sales. That’s why the company is so intent on answering its partners’ calls for streamlined operations and better education about generative AI, data science and more. At the event, partners learned first-hand about HP’s 100-plus AI-enabled products in a big exhibition hall, and HP leaders exhorted partners to upskill via HP University. During our interview, Lores said, “We need a full ecosystem to change, and this is why we brought all these other companies to show that this is not only HP. There is a big effort behind it.”

The scope of that effort was validated by the heavyweight CEOs who joined Lores onstage. Intel’s Gelsinger repeated an idea from my interview with him in December, calling this the “Centrino moment” for the AI PC. It’s like the period in the 2000s when Intel’s Centrino processors made Wi-Fi a standard feature for laptops—and changed the PC business forever. The integration of local AI functionality into PCs will also fundamentally change the PC market, and it’s going to happen quickly.

Gelsinger said that the AI PC will be “the driving force of a major upgrade cycle,” and he made two points in support of this that I found compelling. First, he talked about visiting Intel’s own factories. On a manufacturing floor, there has traditionally been little concern for deploying the latest and greatest PCs. “Well, now we are doing world-class visualization, image processing and AI use cases in the factory to improve the yield [and] equipment performance,” Gelsinger said. “So every one of those [technicians] needs a leading-edge PC.” That’s one example of the fundamental change in use cases—and technology investments—being driven by AI.

His second point was even more mouthwatering for HP and its partners. Gelsinger said that he recently talked with the CIO of one of the largest banks in the world. That firm’s typical upgrade cycle for PCs lasts four or five years, with 20% to 25% of machines being replaced each year. But with a better understanding of AI PC use cases, that CIO is now planning to upgrade 50% of PCs this year and 50% next year. The financial implications of that accelerated cycle, replicated across many customers, could be immense for Intel, HP and the whole AI PC ecosystem.

The Importance Of Software For The AI PC

It’s not very often that the needs of software drive hardware upgrade cycles, as is happening with AI. This connects to something else Lores told me. When I asked him about his keys to success for 2024, he said that, first, HP has to release its next generation of AI PCs that build on the (very good) machines it has already introduced. Second, in support of the new release, “We need to make sure that our full ecosystem is ready to support it and sell it”—which was one major purpose of the Amplify Partner Conference.

“Third, and also very important,” Lores said, “is we need to have the software companies having developed the applications to really take advantage of the new capabilities the hardware is going to be bringing.” He added: “Customers will take advantage of the new PCs when the applications are ready.”

That’s why he was joined on stage via teleconference by Microsoft’s Nadella, who seemed to have a similar view of the relationship between the hardware and software. “At some level, I think of every AI PC as a copilot PC,” Nadella said. AI copilots (including the various branded Copilots that Microsoft has been releasing over the past year) are meant to help people work and create faster and easier, whether they’re writing code, making an image or drafting a document. AI PCs enable that to a higher degree by shifting many AI functions from the cloud to the local machine, which saves both electricity and roundtrip time while improving data security.

From Nadella’s viewpoint, “The most important thing is for us to ensure the diffusion of this technology . . . We are going to innovate at a rate where we can diffuse all of this broadly. That’s why I think building out the AI PC is building out that copilot technology—the copilot stack—which is going to be available for any software developer.” Working together, Microsoft and HP can drive the benefits of AI to developers and users at scale, and do it responsibly.

HP Is Improving Its Supply Chain And Partner Programs

Over the past year, HP has made good strides on its “Future Ready” strategy. This companywide plan aims to ensure sustainable growth by improving customer (and partner) focus, evolving the portfolio both organically and inorganically and optimizing the company’s operations. “We are very pleased with the progress,” Lores told me, although he and his lieutenants also emphasized throughout the event that there is still plenty of work to do.

The company is using AI to transform its internal operations, from HR to finance to the supply chain. Many of these improvements directly support HP’s stated aim to be “simpler,” or as one HP exec put it, “to make sure that we are the easiest company to do business with.” As one example of this, HP’s configuration and pricing platform, which uses AI, now prices more than 70% of the company’s deals in less than two hours. Over time, HP plans to route even more deals through the platform, and to reduce the average pricing time to minutes.

This renewed dedication to being fast and predictable for its partners has helped HP improve lead times, real-time visibility for orders and inventory, demand forecasting, speed of delivery and SKU rationalization. It also dovetails with the company’s strategic focus on reengineering its supply chain.

“We saw during Covid that we needed to rebalance the focus between cost and resiliency,” Lores said during his keynote. “For 20 years, all the world had been designing their supply chain infrastructures [and] footprints with one goal in mind: reduce the cost to the minimum. What we have realized is that we need to rebalance,” because it does not do any good to have the lowest-cost product if you cannot meet your customers’ needs.

This is a major effort, considering that HP’s supply chain spans 170 countries on six continents, but it is helping HP to be more resilient in the face of disruptions such as the recent geopolitical unrest in the Red Sea. Like Intel and other companies that realized the same hard truths about resiliency during the pandemic, HP is making sure that it is manufacturing its goods in numerous locations around the world that are closer to the customers it serves.

While the supply-chain effort involves a lot of physical logistics and capital outlay, HP has also improved life for its partners through streamlined program management. One major move has been to unify and simplify partner programs under the Amplify banner to cover the entire HP product portfolio. This delivers an easy-to-navigate global structure, which rewards partners based not only on their raw financial performance but also on their collaboration and other capabilities. In line with this, HP has introduced various programs that make it easier for partners to sell more and earn more, which has already had an impact on the company’s sales in peripherals and services.

Growth Drivers Beyond The AI PC

It’s understandable that the AI PC is attracting so much attention. And indeed, HP now has what Lores calls “the broadest portfolio of AI-enhanced PCs.” However, its growth strategy extends to other product and service areas as well as key customer and geographic segments.

On the product side, printing and videoconferencing are obvious targets. “We are going to be radically redefining the printing experience,” Lores said in his keynote. “What we see today for many of our customers is that when they try to print, especially documents from the Web, they need to go through a process of trial and error.” But AI enables printers to anticipate what the user wants and help them achieve it quicker and easier.

It’s similar for videoconferencing, about which Lores said, “We know how painful that experience still is.” HP is using AI to make the experience simpler, for example by showing you the faces you really want to see during a meeting—for example, your customer or your boss. And Lores sees the same approach extending to classrooms and even to retail point-of-sale systems, for which HP is the number-one vendor in the world.

The company is also emphasizing recurring-revenue solutions and services, which tend to be more profitable—and stickier. To take one example of a new service offering discussed at the conference, HP estimates that there are more than 75 million conference rooms in the world that lack the appropriate equipment for videoconferencing. This presents a ripe opportunity for a conference-room-as-a-service subscription model, which HP plans to roll out later this year.

Another area of focus is public-sector IT spending, including the vast sums spent worldwide to digitalize education. HP has also identified SMB as a key segment where it does not have the market penetration it would like. Some channel partners are especially suited to serve the IT needs of SMB organizations, which represent a $200 billion annual opportunity in the U.S., and about $1.2 trillion worldwide.

Lores also discussed key geographies, including India—which he noted “is on its way to becoming the third largest economy in the world”—as well as Indonesia and Saudi Arabia. Other HP speakers mentioned Latin America and Africa. Overall, Lores said, “We are seeing growth being rebalanced,” with more of it coming from areas of the globe that weren’t growing as rapidly for HP 20 years ago. India alone has more than 6 million SMBs and more than 30,000 digital startups, along with 250 million students and 1.5 million new engineering graduates each year. And PC penetration rates in the Indian market are comparatively low, which is one reason that India is the first market where HP is offering refurbished PCs. As technology adoption increases in India’s smaller cities and on out to the small towns in rural India, new business models can offer much greater technology access for the Indian population—and significant growth opportunities for HP and its Indian partners.

Globally, HP is looking to target as many as 2 billion more potential customers and more than $700 billion annually. Its local and regional channel partners will be vital to that effort.

Wrapping Up

All in all, HP Amplify 2024 was a great showcase for hybrid work and the magic of AI for making people more productive, more effective and more creative. I’ve been very happy with the company’s progress on AI PCs and look forward to how those products will mature across 2024 and beyond. Echoing a sentiment expressed at the event, we have so far seen only the tip of the iceberg for AI’s impact, let alone what AI PCs can do. I believe that what we are seeing now is the biggest software and experience shift since the Internet itself.

Appropriately for a partner conference—and a channel-oriented company—HP is pursuing a smart strategy that capitalizes on its product portfolio, the strength of its brand and the trust it has built across decades with its partners. As Lores told the assembled partners at the start of his keynote, “We will only be successful if you are successful with us,” and it seems to me that HP is living up to that ideal with its sustained efforts to make business easier for partners.

AI is a high tide that can lift many boats. Given its huge footprint in PCs, printers, POS equipment, videoconferencing and beyond, HP is in a great position to thrive during this AI boom. I’ll be fascinated to see how the company executes against its ambitious plans in the months and years to come.

Patrick Moorhead
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Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.