December 6, 2022

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HP’s Alex Cho: Making gaming products for a hybrid world

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Interviewing Alex Cho, president of HP Personal Systems, has become an annual ritual as the company unveils its plans for the Consumer Electronics Show.

HP Personal Systems is showing up with a variety of new products, including a bunch of Omen gaming systems with the latest processors and graphics chips. I talked to Cho about the trends that he has seen and the tech that HP is showing off this week at CES 2022, the annual tech trade show in Las Vegas. We talked virtually about a show that was taking place partly in-person, partly online. And companies like HP are still figuring out how to make products for our hybrid world.

As Cho said, 2021 was another year when people are still getting readjusted to using their homes as protected enterprises that were fully equipped with the computers, printers, and networking gear to support family members contending for resources.

Cho thinks the demographics of gaming are changing, with more women and more people from around the world playing than ever. I talked with Cho about HP’s lineup of new products at CES 2022 and why the PC is still essential. We also talked about the shortage that has affected almost all electronics products, and we discussed the metaverse as well.

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Here’s an edited transcript of our interview.

Above: Alex Cho is president of HP Personal Systems.

Image Credit: HP

VentureBeat: How has the year been for you?

Alex Cho: My very educated word is, “Wow.” From a business perspective, it feels like 1999. In 1999 everyone was finding out about these new startups, the new dot-com things, the innovation and the energy. The category has that kind of energy. At the same time, in parallel we’re dealing with a massive world phenomenon around COVID and travel, Zooming too much, everyone’s personal lives disrupted. We’re all learning what this means. The category has never been better, but it’s in the midst of–everyone’s sense of family, safety, work, we’re getting readjusted.

A few big observations come to mind. First is, you’ve heard this language from us, but it’s a big deal: the PC is essential. Before it was a utility on the side. You go to the office. You get your PC. You do whatever. Or for school. Now it’s moved from this thing on the side that had a lot of relevance and moved right into the middle. It is the basis by which working and learning and entertainment is happening.

With the PC being so essential, it’s going to drive category innovation. But the most important thing, and you’ve seen us make this transition, is it’s not about the device. It’s about experiences. It’s about people spending so much time digitally. How do you enable these experiences? What are the meaningful experiences in a new hybrid world? That might be the best backdrop. We’ve been on this journey and this was the catalyst that moved us much more quickly.

For CES, my biggest thing is, this is an experience launch from us. It’s an experience launch around how people create, consume, and collaborate on their devices. It’s going to have a work element. It’s going to have a gaming element. It’s going to have a creative element. It’s an experience launch, which means, yes, there’s hardware, but the hero becomes the software assets that we’re building and deploying as a solution. Then it’s a continuation of all the things we’ve done around sustainability. We’re just finding our legs and getting better at that. And the last one is, we have a ton of products. Probably the biggest launch we’ve ever done.

But I wanted to give you the frame of, in our view, hybrid is here to stay, structurally. Even if a person can drive into the office safely and not wear a mask, or even if they could get on United Airlines and travel to wherever, they’re not going to do that all the time. Most companies I know, like us, they’re reducing their ongoing travel budgets and replacing them with technology budgets to make sure people can videoconference, save time, and be more productive.

This is a structural largening of the market. Experiences lead. Our intent is to be the leader in hybrid work, in gaming, and in creation happening across our ecosystems. That’s the story.

Above: HP Omen 25L desktop gaming PC.

Image Credit: HP

VentureBeat: For this CES, are there other themes you’re also getting into?

Cho: The quick answer is yes, but with the caveat–what is the new? The new is, we’re very serious about enabling hybrid work. We’re not just a device player anymore. We introduced HP Presence. I’ll do a quick rewind on that. HP Presence is delivering experiences around audio and video. We took assets from our imaging and printing, specific IP from our labs. We do a lot around facial recognition and image management. We took all of that and we’ve created what we call HP Presence, which is audio and video experiences that we think will be far more meaningful.

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As you know, the way you show up now is how you differentiate. We’ve delivered that HP Presence set of technologies in our room solution just last month, the conferencing solution. We’re going to be delivering that HP Presence technology suite in our latest generation, which we’re announcing at CES, of our Dragonfly commercial premium laptops. All of our 800 series, the corporate workhorse experience. And the other thing we’re doing is, even if you’re working hybrid and so on, every time you’re at home, you’ll want a display. We’re overhauling the entirety of our display portfolio so that audio, video, conferencing, all of that being a part of how you stay productive and stay connected, it will be true across multiple elements of our displays.

That’s the big thing. We’re serious about hybrid work as a segment and not just a product. The second main area, you know we’re in this creator space. We’re taking the combination of–we have an Envy desktop that offers a level of configuration and expandability that more people are looking for. We’re breaking records on the new Z2 Mini just in terms of power and size. That’s the engineering stuff we love. We also have our mobile workstation, ZBook Firefly. We’re continuing to manage the size and performance.

All of them have sustainability in the play, but what’s interesting is, we’re introducing and expanding on all the software use cases. We call it HP Palette. Take a picture on your phone. Quickly transition that onto your PC. Use Photo Match with unique HP Labs AI around face recognition, because people are quickly trying to pull that. Use Duet, which allows you to use a second PC, like a 360, and that will be the input mechanism on your main device. What’s new is, we’re now designing for the creative use case. It’s not just a product.

Gaming just goes on steroids as well. I mean that in a positive way. We’re doing a lot of engineering around our cryo chamber, in mainstream gaming as well as performance gaming. We don’t think it’s about gamers anymore. The market is gaming. There are so many more entrants. The segment used to be around people who are hardcore gamers. Doing it on their own a little bit. Gaming now is incredibly social. It’s the way people connect, through gaming. It’s a much larger segmentation and a much more diverse segmentation. They game and do other things. Enabling the full ecosystem, from a great compute device to great peripherals and then creating–we have, as you know, Omen Gaming Hub, where they can configure, enhance, and connect with others. That’s the rich ecosystem.

Again, it’s not a spot product. We’re getting into gaming end-to-end as a segment. We have several products that help enable that. The new is, we’re not just delivering products in a segment. We’re going to take the segment. We’re going to take hybrid work. We’re going to take creativity. We’re going to take gaming. We’ll look at the entire ecosystem, because the experience is more important. That’s the biggest learning in this hybrid time. It’s the whole experience.

Above: HP Omen desktops can go for as much as $5,000.

Image Credit: HP

VentureBeat: The Omen 45L can go as high as $5,000 depending on the configuration. I’ve heard that a lot of component prices are going way up. Gaming machines may be getting more expensive at this stage. Is that one of those impacts of the last year and more?

Cho: I’d say it’s in both directions. This is what I mean by that. The need for more experiences, the latest in technology, is driving even more premiums. Typically what you get to review are the top-end SKUs. But we’re also going downstream, or mainstream. That’s where our Victus line is important. Victus is our more mainstream gaming category player. We’re going to have a Victus 15L, a desktop with a very compact design. We’ll continue to expand our Victus line into desktop and mobile so that we can capture both ends. But yeah, you can config these things up all the way. There are a lot of experiences that you can get to as you config them up.

VentureBeat: As far as availability goes for some of these things, are you still looking at short supply, or do you feel better about where availability is for this generation of products that’s launching?

Cho: We’re still in a global supply constraint. What we’ve been sharing is, our best view is a fluid view. The fluid view is that we’ll still have challenges into the second half of the year. As you know, if you look at the migration of where the hot spots have been – CPUs about 24 months ago, to panels, and now it’s in ICs – one benefit that we have is we were designing for reduced complexity, more second sourcing. We’re designing to be able to mitigate that much better. But the macro environment still presents itself from a constrained perspective.

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We’ve significantly increased our direct relationships with upstream suppliers. We get key components directly managed through long-term agreements. With that, plus simplifying and designing for multiple sources, we have more flexibility. But we’re not out of the woods. My father-in-law just cancelled his deposit on a Hyundai because they came back and said there’d be a tech tax of $3,500, and it won’t be here until June. That dynamic applies in our space as well.

The one thing I’d also add, when we say “gaming,” just to be clear, this is also HyperX, which is a key part. This is another reason why I say it’s new, because we’re not just going after HP PC gamers. We’re going after gaming, which means that HyperX is focused on HP PC gaming, other Windows-based PC gaming, and console gaming. Just a much broader market. We will be announcing a HyperX clutch controller. I don’t know how much of this has been shared. We’re continuing to optimize headsets and make them available for PC-based and console-based environments.

Again, the big news is we’re not just looking at PCs in different segments. We’re looking at hybrid work. Leading hybrid work, all up. All of our services are also part of that. What’s new are these key solutions I mentioned. We’re looking at the whole creativity space, all up. We’re looking at gaming. That’s why we feel good about the forward-looking opportunities for us.

VentureBeat: How do you feel about the level of innovation in tech coming from key companies like AMD, Nvidia, and Intel?

Cho: What I see is similar to what I mentioned about 1999. Everyone is accelerating their desire to go innovate more. That applies at all layers of the stack. To deliver that experience, it’s not just about silicon. Intel is moving more quickly. You see what they’re doing, and you’ll see us be the best in class with all their latest. AMD, same thing. ARM players, same thing.

But if you want a great hybrid work solution, you’re going to need a great device that has silicon optimized for best performance and power. You’re also going to want great audio and video conferencing capabilities. You’ll want to make sure corporate networking can secure those devices. Security is super important. You’ll want to make sure it’s also connected to a beautiful display if you want to stay productive. You want to be able to move around. I didn’t even talk about things like auto-framing. People can walk back and forth and the camera will follow them. It’ll also adjust voice leveling to make sure that your voice is picked up.

The two meaningful things around the whole audio/video area–three-quarters of people say that they now judge you based on how well you show on audio and video. Think about that. If you’re a salesperson, or even just part of this growing freelancer community, more than whatever it is you have to sell, how you show up on that Zoom call or Teams call is going to differentiate you. Suddenly, as a catalyst for innovation–video conferencing is now one of the top drivers of refresh. Companies are coming to us and saying they’re permanently going to hybrid work. One of the key things they’re asking for–their employees used to cover up the camera with a Post-It note. Now they want a huge camera. They want to look great. They want to be able to quickly mute and be heard well. They want noise cancelling. That’s new.

Above: HP says gaming is more diverse than ever.

Image Credit: HP

VentureBeat: It feels like there is some payoff to very purpose-built post-pandemic camera technology. The more you do that, the more it pays off.

Cho: I’m very happy that all the stuff we’ve been working on in the past–the trends played in our favor. We’re strong in commercial. We have a lot of assets in video that we’ve been building on even more. We’ve been integrating the vision.

The other big shift and big learning–we’ve always talked about the consumerization of IT. With COVID it goes from anecdotal data points and dialogue to, every person is experiencing it and demanding it. Having a very strong consumer business portfolio about to go to market, and having a very strong commercial business–I’ll be concrete. If you’re a “consumer” customer, you care about security. You might call it privacy instead. But the ability to secure and make sure you have a device with that level of–you want what you used to want in a company environment in your home now.

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Vice versa, that commercial PC, Dragonfly–having the design people think of when they look for a consumer device, that becomes increasingly important. We’re able to get that leverage because of having both businesses strong and growing.

VentureBeat: It feels like women in gaming is becoming a more interesting demographic and a more prominent topic. What opportunities do you see there?

Cho: You just recited the insight that’s driving a lot of what we’re doing. You’re right. Gaming is not the stereotypical profile of the past. It’s far more social. It’s growing into a much broader demographic. Women make up 60 percent of new gamers, which is very important. That’s one of the drivers for what you’re seeing from us. Ensuring that we have a platform like Omen Gaming Hub where people can connect with others, which is an increasingly important part. You see elements of our portfolio, like HyperX. We’re thinking about design and color schemes that are more universally accessible. That’s why the traditional Omen color scheme has gone from the darker, black and dark red, to a much more universally inclusive palette.

Again, I don’t want to be mistaken. We don’t want to say that one color is right for one segment. But we want to go beyond the traditional, very tight color and design schemes we’ve had. As well, we want to open this up for far more social and community engagement through our platform, which we believe is part of what’s happening with a more diverse demographic entering into gaming.

Beyond gaming, there’s a couple of dimensions. We have a lot of products, but a big internal theme–the focus of our telescope shouldn’t be the product. It has to be on people. That’s a very big topic internally. Focus on people, who they are and what they’re doing. That drives a different design strategy. It’s not just product design feeding the next rev. What are people doing? What are their needs? How do we enable them? It manifests in everything from the experiences we build to curating the product and ensuring that design addresses the different places people are.

This is a great example of why software is such a key part of this launch. This is an experiences launch. This is HP as a segment leader in hybrid work, gaming, and creative. This is very much a software launch where part of our software capabilities will involve deploying many devices because we’re looking at use cases. And this is very much a sustainability launch. We’re committed and passionate. Progress is creating an appetite and a desire to go so much further. We’re very serious about that, including not just the product, but also packaging. Being very conscious of packaging as a part of the total environmental footprint is a key part.

Above: HP is acknowledging the DIY trend by offering its Omen 45L case for do-it-yourselfers.

Image Credit: HP

VentureBeat: How much is the metaverse and NFTs and related technologies on your radar?

Cho: It is on our radar. I’d say it’s on our radar as an extension. We’re continuing to open up opportunities. Our simple mental model is that internet 1.0 was around information and 2.0 was around a more social networking platform. 3.0 will be about getting new types of things done. For us, it’s very much on our radar because you’re going to need a lot more compute. You’re going to need a lot more remote compute and creative compute. The onramps and offramps of it will be even more important. Displays, yes. VR, yes. Analog outputs from it as well. We think of this as a company. This is the original vision coming true, related to that.

That’s why we’re making sure we’re thinking about services that enable people to have their devices, but more than devices, key use cases enabled. Conferencing services and so on are so important. In our day job we think that’s why the security of our devices is becoming more important. You want to know, if you’re connecting into this metaverse where you do more than just exchanging information, that your devices are secure. You’ll be doing more payments and so on.

We think it’s absolutely a catalyst. I’m just cautious because “metaverse” has so much additional fanfare attached to it. We think it’s an opportunity, but we’re pretty rigorous about how we think about it. It’s a great extension of what we’re doing as we progress toward more innovation.

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