Is Hurd funding IPG's Demise with IPG's Revenue?

In a very interesting article by Ned Randolph at NewsFactor, he discusses HP's move into other, non-traditional printing areas like Photo Kiosks and on-demand, uniquely individualized newspapers.

Buried toward the end of the article is a quote from Gary Peterson, a principal analyst with Gap Intelligence in San Diego.

"... the printing industry is a mature one, and there is a movement within HP to use IPG's 18.5 percent profit margin not to grow the printing segment, but move it into IT services, where IBM Relevant Products/Services dominates..."


Peterson goes on, "What we've seen from (CEO) Mark Hurd is that he's very interested in infrastructure Relevant Products/Services services. He wants to slowly evolve HP into IBM."

And they're using IPG profits to power Relevant Products/Services that transition, he said.

"It's really a matter of IPG funding the transitional costs of acquiring EDS and funding how that division of HP grows and succeeds," he said. "They purchased EDS to get a better foothold in the enterprise Relevant Products/Services market."

For example, when IBM approaches a huge company like General Motors, it can give them high-level customized server Relevant Products/Services, software, hardware and support..."

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Over the past few months, HP has overtaken Dell in laptops, purchased EDS and is actively working with Intel and the G6 - CISCO is getting into servers now as well.

It isn't like HP is going to leave the printer and output space completely, just come at it from a different direction.