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HP’s Apogee Acquisition Strengthens Managed Services for Print Juggernaut

by Dave Zamorski, Blair Hanley Frank
HP-Apogee-Print-Services

HP announced Wednesday that it entered an agreement to buy Apogee, a U.K.-based provider of enterprise print services. It’s a move that strengthens HP’s Managed Print Services (MPS) offering to enterprises, especially around larger format printers and copiers. That will put the combined company in a position to better capitalize on the market shift toward large, long-term contracts for printing services.

Enterprises stand to benefit from the acquisition, which will put HP in a better position to provide global print services for large clients. This deal, worth roughly $444 million, brings Europe’s top managed print services provider under HP’s umbrella, complete with a large stable of long-term enterprise contracts. This is the second major acquisition HP has made recently to support its ambitions – coming after its 2016 purchase of Samsung’s printer business. Put together, those two deals mean HP now has a significant footprint in both Europe and Asia.

Apogee doesn’t make printers of its own but instead manages other companies’ machines, including those from HP competitors like Xerox, Konica Minolta and Ricoh. HP plans to keep it as an independent subsidiary following the deal’s close and has said Apogee will continue to support hardware from competitors. HP Imaging and Print President Enrique Lores told CRN in an interview that Apogee won’t receive preferential deals for selling its products compared to those the company offers to other resellers in its partner network.

The print services company has 1,000 employees and reported roughly $273 million in annual revenue for 2017. Sales and management of HP hardware makes up a minority of Apogee’s business, but we expect that to change as the companies integrate and existing contracts come up for renewal.

This deal puts HP in a better position to tackle the industry shift toward managed print services and enhances its position in the market for A3-sized printers and copiers, a market that HP has said is worth $55 billion worldwide. HP is a dominant force in the market for desktop printers but has a smaller share of the A3 market compared to a company like Xerox.

A more powerful HP will also put pressure on other players like Xerox, Konica Minolta and Ricoh to better compete on price and innovative features for enterprise customers. We expect this competition to be a net benefit for enterprises in the long run.

In addition, there’s potential for Apogee to eventually support HP Indigo, the company’s printing press business, providing enterprises with an easier way to adopt digital presses through managed print services.

We see this acquisition as a highly strategic move by HP to capitalize on a market opportunity and shake up the status quo in the enterprise MPS space. What remains to be seen is how well HP can incorporate Apogee into its business and drive additional value for itself and its enterprise customers.

About the authors

Dave Zamorski is a leading authority on enterprise print communications. Applying a no-nonsense approach utilizing his Black Belt in Six Sigma and 30+ years’ experience, Dave helps organizations understand, control and reduce their print spend.

Blair Hanley Frank is a technology analyst covering cloud computing, application development modernization, AI, and the modern workplace.