Manchester City FC

What has HP Inc got in common with Manchester City and Chelsea FC?

Comments made by the HP boss about the context of the recent acquisition of Apogee got Billy MacInnes thinking about other operations that buy strategically to deny rivals

Here’s a head scratcher: What has HP Inc got in common with Manchester City and Chelsea FC?

I’m guessing that’s not a question to have exercised too many people in the past. In fact, there are far more things people can list off the top of their heads that they don’t have in common: they’re not all English premier league football clubs, they’re not all owned by billionaires and they’re not all technology businesses.

There are loads more things they don’t have in common but, thanks to comments made by HP Inc boss Dion Weisler at the Canalys Channels Forum in Barcelona, we learned that there is one trait they do share.

Speaking at the forum, Weisler revealed that one of the reasons behind the vendor’s decision to acquire print specialist Apogee in August was because it didn’t want to run the risk of the company being snapped up by one of its rivals.

“We looked at it and said if we don’t acquire them one of our competitors will,” he said. “So, as much as a defensive move we acquired Apogee to help us learn and grow and to accelerate our scales [in that market] more quickly.”

People who aren’t Chelsea or Manchester City supporters or who don’t follow soccer that closely will probably be slightly nonplussed as to why those comments should have any connection with football clubs based in south west London and Manchester.

But Weisler’s Apogee strategy bears an uncanny resemblance to Chelsea and Manchester City’s policy of signing loads of young players, partly to stop other clubs from getting them. Last season, Chelsea had 38 players out on loan (yes, that’s more than three teams worth). Admittedly, not all of them are fantastic players but there are a few in there that could do well. Meanwhile, Manchester City sent 41 players out on loan last season.

Between them, Chelsea and Man City had 79 players on loan or seven teams worth. If they weren’t owned by Chelsea and Man City, some of those players could be plying their trade at other premiership clubs. As for the ones on loan to other premiership teams, the rules forbid them from playing against their parent club so the players could help inflict damage on rival teams while on loan but not on Man City or Chelsea.

There’s a subtle difference with Apogee because HP Inc has stressed the business will continue to sell a mixture of brands and operate as an independent subsidiary. However, whatever HP says, there are bound to be those who question whether Apogee can remain completely independent and approach other brands with the same detachment as it did before the acquisition.

Any concerns may not have been completely assuaged by Wiesler’s argument that buying Apogee was also important because “in this business you are talking about machines in the field and a contract of three, five or seven years in length. We would be yielding that machine in field population for a very long time”.

On the one hand, he could be suggesting HP was anxious that if a rival vendor took over Apogee it would try and use the takeover to push its machines into those contracts, locking HP out for years. On the other hand, if Apogee remains completely independent under HP, it would appear the vendor has paid £380m just to ensure it is considered for contracts, not guaranteed them. In other words, the end result for HP in those contracts could well be the same as if a rival had bought Apogee.

So there could be a divergence between the Man City/Chelsea approach and the HP Inc strategy. Footballers on loan might experience a temporary shift in loyalties when they play for another club and its fans, but at the end of the day, there is no confusion about which club they have a contract with. Will the same apply to Apogee when it comes to advising a customer on a choice between HP and a rival vendor?

This was last published in October 2018

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