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.

Huawei, which will initially start with 100 employees dedicated to the ICT sector in its Ruta N office beginning in February, is a significant player in mobile device market. It is already the third biggest smartphone maker in the world, after Samsung and Apple, and it reported $36.7 billion USD in revenue in the first half of 2016 — a 40% spike over 2015.

No company in the world has filed more patent applications over the past two years than Huawei, according to the World Intellectual Property Organization. Its 3,898 filed in 2015 was significantly more than the 2,442 filed by the next most-active company, Qualcomm.

“Having Huawei right here in Medellin is not just something that happens every day,” said Sergio Escobar, the head of ACI Medellín, the city’s business promotion agency. “On the contrary, it is a vote of confidence in the city.”

This isn’t a new entry into the country. Huawei has had a presence in Colombia for 16 years and first arrived in Medellín in 2005. Its powerful but generally low-priced phones, which still haven’t made much market penetration in the United States, are popular from the capital of Bogotá to small rural town in the jungle.

But moving into Ruta N will better position Huawei as a leader in the city’s emerging tech community — which is striving to better combine the resources and knowledge base of the private sector with counterparts in government and academia. “We are committed to Medellin,” said Xiong Yihui, president of Huawei Colombia.

He sees the city as a place where Huawei can leverage the pre-existing culture of innovation and help push the type of transformation that Medellín is trying to foster. “Innovation is the gene of Huawei,” said Xiong, “and it’s the most important reason for Huawei’s success … We believe that with Ruta N, which is a haven of innovation in Medellín, we can get close to the city. We can be together and be able to contribute to digitalization of the city and to the intelligence of the city.”

Ruta N is a beautiful, sprawling building in Medellín that has become the beacon of the city’s technology push. (Credit: Ruta N)

By setting up shop in Ruta N, the Chinese mobile giant will have world-class connectivity, security, and all the many resources housed within the building. It will have complete proximity to the evolving innovation ecosystem of entrepreneurs, developers, and those seeking to build the city’s venture capital capacity. Ultimately, however, this is a bigger announcement for Medellín than it is for Huawei.

Attracting big-name firms has been a key part of the city’s strategy, so getting a larger commitment from a company like Huawei will ease some minds. “For us to have Huawei continue its stay in the city is very gratifying because it means ratifying the evolution that Medellin has been having,” said Ricardo Galindo, Colombia’s undersecretary of business development, at the launch event this month. He added that, “we’re betting more and more on attracting big multinational companies, on having them come here and on together building that development for our society,”

Alejandro Franco, executive director of Ruta N, reiterated his organization’s goals at the press event. Based upon a strategy set out in 2012, he says that Ruta N has already helped establish 152 companies in Medellín that have created 2,500 jobs. More than half of these are in the ICT sector, with another 10% coming in healthcare and energy, and the rest falling into construction, mobility, and various other fields.

By 2021, the objective is to exceed 800 companies and 18,000 jobs, with the bulk being well-paying positions in the knowledge-based economy. “We’re about to become an innovation hub where we will concentrate the demand and supply of companies that arrive and set up shop and from here connect themselves with Latin America,” said Franco.

Up until now, the larger focus has been on U.S. firms and linking with Silicon Valley names like HP. But Huawei may be opening up a new door to the other side of the world. “It’s very iconic for us to say that Asia is taking notice of Latin America — is taking notice particularly of Medellín,” said Franco. “For the generation of future trust in our city, the arrival of Huawei is a key point.”

It has also brought its PageWide printers to Colombia. The technology is inkjet in nature but with better quality than many laser printers — and built for speed.

To learn more about this, and HP’s anti-piracy campaign to combat counterfeiting in Colombia, Finance Colombia Executive Editor Loren Moss recently sat down to speak with Marcela Fonseca of HP Inc.

Finance Colombia: So HP now has it PageWide printer — which they say makes it cheaper to print per page than with lasers in color — available in Colombia?

Marcela Fonseca: Yes. We have that technology available in Colombia. In effect, it’s a technology that companies said they wanted to use depending on their necessities. We have laser and we have PageWide.

PageWide is a technology that we are bringing out based on big digital presses, which is the advantage of that technology. By just passing once over the page, absolutely all of the content is printed. It has 24,000 nozzles that apply ink smoothly and evenly and print the page immediately — with no running when the page is wet.

They are super-fast machines. They print 75 pages per minute, so they are really fast. And in fact, color printing for the office is extremely cheap per page. So companies decide whether to use laser or to use PageWide — or a mixture of both — depending on the needs that they have.

Finance Colombia: If PageWide is cheaper per page than color laser, and if it has high-quality color, what advantage does a traditional laser machine over a PageWide?

Marcela Fonseca: The thing is that PageWide has “office color.” Not the color that a publicity or communications area may require that needs high color fidelity. PageWide has office color, which may be a standard, normal color, but not what is required by this type of communications presentation that has to go out to a final client or that has to go outside.

PageWide technology is ink. The special thing about PageWide is that it is a different technology that is generating greater economy in office color and at greater speed.

Finance Colombia: So PageWide has been the great debut of 2016 in Colombia?

Marcela Fonseca: That’s right. And we’re also making clients aware about an anti-piracy program that we have. It is designed to let clients know that they can turn to this program when they suspect that the product is not original toner and it might be one of the alternative products — like the remanufactured, refilled, or fake ones. They can use these telephone numbers and e-mail addresses to request that the interdisciplinary team go and check the product that they have been given and carry out an investigation.

That means that later on, smuggled or false lots of products can be confiscated so as to attack that kind of product. Because, unfortunately, according to the statistics many customers are buying a fake product without realizing it. So we’re also taking advantage of the chance to tell clients that we have that tool that they can use.

Depending on the quantity of clients, they are visited so as to check the products. Or it can be done by means of a hologram that we have on the toner boxes. A code can determine if the hologram is in fact original or not. That’s the procedure that we use to determine if the product is original or fake, and in that way we can begin the investigation process.

Finance Colombia: So that’s applicable when the product says that it’s HP brand, but it’s not really HP.

Marcela Fonseca: But it’s not HP. Exactly. Customers receive the product and they think that it’s original — but then they begin to detect some flaws in how it works. Or the box doesn’t look like the usual one. Or it was bought at a very low price.

Finance Colombia: Has that been a big problem here in Colombia?

Marcela Fonseca: Yes, in Colombia and everywhere. Fortunately, within the region, we have this team that investigates and confiscates. It has allowed us to detect gangs dedicated to falsifying products, whether they are remanufactured, falsified, or smuggled into the country.

Finance Colombia: Wow. The laser ones or the ink-jet cartridges too?

Marcela Fonseca: Both. Laser and ink. All kinds. So the message for our clients today is that we have several tools to help them in defending the investment that they are making.