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August 2008. Open Innovation: An HP Case Study. Mauricio Leon Hewlett Packard Consumer Desktops BU Taiwan. Agenda. Consumer Desktop PCs at HP Open/Closed Innovation Open Innovation at the Consumer Desktop GBU Challenges. HP’s Consumer Desktop PC GBU.

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August 2008

Open Innovation:An HP Case Study

Mauricio Leon

Hewlett Packard Consumer Desktops BU Taiwan


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Agenda

  • Consumer Desktop PCs at HP

  • Open/Closed Innovation

  • Open Innovation at the Consumer Desktop GBU

  • Challenges


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HP’s Consumer Desktop PC GBU

  • Responsible for managing the consumer desktop category worldwide

  • Classical business unit organization

  • Headquarters in Cupertino, California


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Consumer Desktops -- Business Environment

  • Very competitive

  • Flat to declining market

  • New product categories

  • Geographical segmentation

  • Need to do more with less


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Closed Innovation

  • Ideas are internally generated

  • Results of innovation carried through to the markets as a product or service by the same company

  • Commercialized innovations generated this way drove profits and enabled further investment in R&D

  • Innovation model followed by most companies in first half of 20th century


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Open Innovation

  • Internal and external ideas as inputs to the innovation process, combined with internal and external paths to markets

  • Under Open Innovation, ideas come to the innovation process via

    • Internal research, external research

    • Licensing other companies’ technologies

    • Acquisition of other companies products

  • Conditions that supported the transition from Closed to Open

    • Increased availability of quality technical talent globally

    • Increased mobility of talent across geographies and firms

    • The increasing number of firms developing new products and services

  • Adoption is driven by R&D management or business strategy


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Open Innovation atHP’s Consumer Desktop GBU

  • Open Innovation has been a key part of the Consumer Desktop GBU’s business strategy

  • Our use of Open Innovation has evolved with time

  • Focus has evolved from R&D to global R&D management

    • Taipei operations

    • Develop new skills


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Business Drivers of Open Innovation

  • Very competitive market

  • Low profit margins, low R&D budgets

  • Complex product portfolio

  • Open Innovation delivers for Consumer Desktops

    • New ideas, new products

    • Lower R&D investments, manageable risks

    • Broader product portfolio


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Enablers of Open Innovation

  • Standards, open architectures, platforms

    • Design modularization

  • Ecosystem around platforms

    • Standards

    • Products

    • Companies

  • Information and communication technologies


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Challenges

  • Determine how to evolve the Open Innovation model as the PC market matures

  • Identify the need for developing owned IP

  • Develop the skills to execute “Closed Innovation” where needed