Q&A: Why HP Is Focusing on Mobility in the Colombian Market

HP Inc. has been ramping up its product offerings and marketing in Colombia over the past year. In the last 12 months alone, the Silicon Valley-based tech giant has introduced new printers, tablets, and a premium line of laptops and desktops for home and business to the Colombian market.

Photo: HP unveiled its new so-called “3-in-1” device, the HP Elite X3, late last year in Bogotá. (Credit: Jared Wade)

To find out a bit more about the company’s operations in the country, particularly surrounding mobility, Finance Colombia Executive Editor Loren Moss caught up with Luis Rico, who works in HP’s Latin American mobility and education division.

Luis Rico of HP’s Latin American mobility and education division.

Finance Colombia: To start, can you tell us a little bit about yourself and what you do at HP?

Luis Rico: I’m in charge of the mobility business and the vertical of education for Latin America. Basically, when we talk about mobility for HP we’re talking about the entire ecosystem.

When I go to a vertical industry — whether it’s education, health, retail, or banking — I have an ecosystem that allows me to offer a solution. We talk about equipment, connectivity, security, content, applications, and integration. This is so that we can always go in with a more solution-based model and more device service.

Finance Colombia: What has the Colombian market been like? Especially talking about competencies in the business sector and the financial sector, what has that market been like? And how do you see its challenges as far as growth and competitiveness?

Luis Rico: I think that Colombia follows, and often even imposes, tendencies in the technological offerings. The concepts of mobility and teleworking are super valid.

In fact, a law was passed. A few years ago a law was drawn up to encourage teleworking. In that sense, options in mobility technologies are on the rise. We’re also seeing the development of very solid integral solutions, applications, and workflows. And this is not coming from only big robust companies like we always used to see on a worldwide level. But, rather, we’re seeing very solid, very consistent, and competitive local solutions from this country.

We have here a country in constant evolution, with ups and downs, which are obviously derived from macroeconomic questions, the oil price crisis, and so on. But Colombia is always advancing in the use of technology. So we see an important opportunity to adjust our models, to sell products at a good price, and to move into device service, solutions, and connectivity in a pay-for-service model.

It’s a very interesting environment. I compare it to economies like Mexico and Chile in terms of using technology.

Finance Colombia: Colombia is a country that understands the challenge to improve the quality of education. Colombia is also evolving from a traditional economy — agriculture and a bit of industry — into one that is trying to compete in areas like IT, BPO, and technology. Can you tell me how HP is taking part in initiatives here inside the country? Are you doing things to support the government and society in achieving the goals they have to improve in those areas?

Luis Rico: We are really one of the leading actors — not only in Colombia but also in the whole region — in the process of educational transformation. We’ve been involved with the whole process.

If we go back some 10 or 15 years, most of the governments adopted “digital gap” technologies to reduce the gap between children and computers. That’s when initiatives were born to give hardware to children.

The governments adopted a lot of those processes, and so did we, as suppliers of much of that equipment. But with time the process showed that the pedagogical part was neglected and teaching staff was neglected, as well as contents, connectivity, and security.

So we asked: How should we really put technology into the classroom to improve the quality of education? That’s where HP came in. We started to analyze the whole ecosystem to ensure that whatever I place at the service of the government is really targeted towards improving the quality of a country’s education.

Finance Colombia: I know HP has made some other recent innovations. What are some of your other positions in mobility?

Luis Rico: Mobility obviously isn’t a tendency anymore. It’s a reality. It’s something that has been adapting itself and evolving for many years. In that challenge, we need to ensure that our portfolio of products responds to today’s needs. You need the computation power of a laptop and the mobility of a smartphone. We’re trying to bring those worlds together: what you need in your normal day-to-day life and also for work.

“Colombia is always advancing in the use of technology. So we see an important opportunity. I compare it to economies like Mexico and Chile in terms of using technology.” – Luis Rico of HP

So the gadget that we announced last year at Andicom in Colombia was the Elite X3. It’s a six-inch device. We don’t call it a smartphone, but rather we call it a computer with which you can speak. That’s how we’re positioning it, and it’s a new category that we created called the “3-in-1.” It’s a smartphone, it’s a tablet, and it’s a computer.

This is a device with a Qualcomm Snapdragon 820 processor, which has a processing capability very similar, if not equal, to a laptop of medium characteristics. It has all the design, soundness, and construction of a commercial device that stands up to the normal daily use of an employee. The telephone runs on Windows Mobile 10, and HP Workspace is a virtualization window to a whole world of applications that a company may have in its IT environment or workflow. This allows you to have a full PC experience and the applications of your environment.

So that is the concept that we launched here last year. And we’re going to continue following up for the next few years, trying to position this category that we think is the convergence model that today’s user is looking.

Finance Colombia: HP is now two companies: one company more dedicated to services and then the HP that has, for example, printers, PCs, and devices. How has HP’s focus changed, and what freedom do you now have to explore fields and markets that before were perhaps not the company’s priority?

Luis Rico: Yes. It was a very good decision, right? If you had seen us when we were only one company, under the name of Hewlett Packard, we were a company with 300,000 employees worldwide, invoicing close to $120 billion USD — half of which came from computing and printing and cash flow. If we separate the two areas of computing and printing, the cash flow profitability that we generated was almost four or five times what was generated in other places.

So what was happening? Let’s say that a lot of that cash flow, a lot of that operating profit that was generated, went mostly to other parts of the company. It wasn’t being very well invested in the hardware part. Let’s say in development of innovation and going about developing and using our platforms.

After the separation, we became a company with more or less 50,000 employees out of the 300,000 that had been here before. And we had revenues of $60 billion USD or $70 billion USD per year and an operating profit of 12% or 13%, which gives us quite an interesting cash flow to be reinvested into technology.

So here you see an HP that is launching products like the Elite X3. And we’re launching 3D printing that is three times faster than what is on the market — and five times cheaper — with a focus on prototyping. You see us now offering the lightest and thinnest laptop in the world. You see us once again at the forefront of innovation and development, thanks to our being a lighter company with enough financial capacity to confront the dynamics of this business.