WEBVTT - Enrique Lores 0:00:02.759 --> 0:00:05.720 The granddaddy of all Silicon Valley startups is Hewlett Packard. 0:00:05.880 --> 0:00:08.280 It would start in a garage in nineteen thirty nine, 0:00:08.360 --> 0:00:11.280 but in twenty fifteen it's split into two separate companies, 0:00:11.440 --> 0:00:15.400 Heulett Packard Enterprises and HP Inc. Recently, at the Economic 0:00:15.440 --> 0:00:18.560 Club of Washington, I sat down with Enrique Loris to 0:00:18.560 --> 0:00:21.320 talk about how he's led the successful personal computer and 0:00:21.400 --> 0:00:29.240 printing company following the split. So which company is better, 0:00:30.720 --> 0:00:34.600 Hewlett Packard Enterprises or HP Inc. 0:00:34.960 --> 0:00:37.800 So, as you can imagine, I have a very unbiassed view, 0:00:38.880 --> 0:00:41.680 and I have say, of course, HP Inc. Is not 0:00:41.720 --> 0:00:44.160 only that we do printers and PCs. 0:00:44.400 --> 0:00:45.440 We think we. 0:00:45.360 --> 0:00:48.680 Are the company that can enable a more flexible way 0:00:48.720 --> 0:00:52.600 of working, to make employees productive, to make employees engaged, 0:00:52.960 --> 0:00:54.160 and this is what we stand for. 0:00:54.840 --> 0:00:59.400 So, but their main business is today is computers and 0:01:00.000 --> 0:01:03.080 so much and printers that their main businesses. Right, So 0:01:03.720 --> 0:01:06.759 I can tell from your accent you're not from Baltimore 0:01:06.920 --> 0:01:07.919 or Washington, DCA. 0:01:08.480 --> 0:01:09.520 Where did you grow up? 0:01:10.040 --> 0:01:11.520 I can't say you're very astute. 0:01:12.040 --> 0:01:15.800 So you're really detecting that I'm not from the US 0:01:15.959 --> 0:01:17.200 is very difficult, I know. 0:01:17.319 --> 0:01:19.440 But yeah, originally from Spain. 0:01:19.600 --> 0:01:21.040 I okay, so you grew up in Spain. 0:01:21.160 --> 0:01:22.040 I grew up in Spain. 0:01:22.440 --> 0:01:26.160 Now, how many companies in Silicon Valley are run by 0:01:26.160 --> 0:01:27.360 people who were born in Spain? 0:01:28.319 --> 0:01:32.559 One one? So all right, so you're born in Spain. 0:01:32.560 --> 0:01:34.560 Did you say I want to run HP someday or 0:01:34.600 --> 0:01:37.000 what it was your aspiration as a young boy in Spain. 0:01:37.520 --> 0:01:40.360 No, it was not my inspiration to tufront a company 0:01:40.520 --> 0:01:44.720 like HP. I joined HP as an intern in nineteen 0:01:44.760 --> 0:01:47.200 eighty nine, so I have worked for the company for 0:01:47.240 --> 0:01:50.480 a very long time. When I was studying, there was 0:01:50.520 --> 0:01:53.040 a group of HP engineers that came to my university 0:01:53.080 --> 0:01:57.120 in Spain, in Valencia, and they explain what it took 0:01:57.160 --> 0:01:59.520 to develop a printer, was where it was when printers 0:01:59.560 --> 0:02:03.080 were starting to be created, and I was amazed by 0:02:03.400 --> 0:02:06.800 both the technology complexity but also by the passion these 0:02:06.800 --> 0:02:09.560 people showed about the printer, And in fact, I was thinking, 0:02:09.880 --> 0:02:13.600 how can someone feel passion for something so strange. 0:02:14.320 --> 0:02:16.399 I have to say though, that thirty. 0:02:16.160 --> 0:02:19.480 Four years later, I have more passion for printers than 0:02:19.520 --> 0:02:21.920 these people had. So I have learned and I have 0:02:22.040 --> 0:02:23.760 been converted to the religion. 0:02:23.880 --> 0:02:26.680 Okay, so you went to college in Spain and you 0:02:26.720 --> 0:02:29.799 got an MBA or an engineering degree. 0:02:29.880 --> 0:02:31.480 I got an engineering degree first. 0:02:31.680 --> 0:02:35.440 Okay, so you're electrical engineer. You moved to Slicon Valley. 0:02:35.440 --> 0:02:36.040 Where'd you move to? 0:02:36.360 --> 0:02:36.400 No? 0:02:36.520 --> 0:02:40.160 Actually, the full story was I got this opportunity to 0:02:40.200 --> 0:02:43.040 work as an interne in HP, and it was I 0:02:43.080 --> 0:02:45.799 had the opportunity to go to San Diego. So we 0:02:46.400 --> 0:02:49.200 went to San Diego for the summer, and when the 0:02:49.240 --> 0:02:53.200 internship was finishing, HP was opening an Rande Center in 0:02:53.240 --> 0:02:56.360 Spain in Barcelona. So they told me, you're from Spain, 0:02:56.520 --> 0:02:59.320 we are creating this new Errandi center you might be 0:02:59.360 --> 0:03:03.239 interested in And I said that at point, yea, maybe 0:03:03.280 --> 0:03:05.080 for a couple of years, because we were living a 0:03:05.120 --> 0:03:08.840 different city, and in Spain you don't change cities. 0:03:08.440 --> 0:03:09.239 You grew up in. 0:03:09.360 --> 0:03:11.080 You are born in one place, you go to school 0:03:11.080 --> 0:03:13.640 in one place, and you build you live all your 0:03:13.680 --> 0:03:16.000 life there. So we said, oh, for a couple of years, 0:03:16.080 --> 0:03:19.399 would be nice to go to Barcelona. Thirty five years 0:03:19.480 --> 0:03:23.400 later we never came back. We went to Barcelona. Sometime 0:03:23.480 --> 0:03:25.440 later we came to the US and here. 0:03:25.280 --> 0:03:27.519 We How long did it take after the split occurred 0:03:27.520 --> 0:03:29.480 in twenty fifteen for you to become the CEO. 0:03:29.520 --> 0:03:31.840 What were you doing before he became COO? 0:03:32.000 --> 0:03:36.160 Before I became CEO, I led the separation of the company. 0:03:36.560 --> 0:03:40.160 So when Meg, or the CEO, decided to split the company, 0:03:40.280 --> 0:03:43.280 we created what we called a separation office and there 0:03:43.280 --> 0:03:46.360 were two leaders, one from HPE and the other one 0:03:46.400 --> 0:03:48.360 for Hilopap Enterprise, one for HPING. 0:03:48.720 --> 0:03:50.760 I led a separation from my side. 0:03:51.000 --> 0:03:54.640 In fact, when I was asked to lead a separation, 0:03:55.520 --> 0:03:57.680 my immediate response was no, I don't want to do that. 0:03:58.600 --> 0:04:00.880 And then Meg, that was make Witnan, that was a 0:04:00.960 --> 0:04:03.800 CEO at that point. After a few days, a weekend, 0:04:03.880 --> 0:04:05.320 she called me home and said, and Rica, I need 0:04:05.360 --> 0:04:07.600 to talk to you. So I went to her home 0:04:07.840 --> 0:04:10.320 and she said, I know you don't want to do that. 0:04:10.520 --> 0:04:13.000 This is the opportunity of your career. You're going to 0:04:13.080 --> 0:04:16.120 learn things you will never forget. You should be taking 0:04:16.160 --> 0:04:19.000 different and when the CEO calls you to her home 0:04:19.240 --> 0:04:22.279 on a weekend, you know that is only one answer. Okay, 0:04:22.360 --> 0:04:25.320 it was yes, I will do it. And I have 0:04:25.400 --> 0:04:26.920 to say I learned a lot. 0:04:27.200 --> 0:04:30.560 So what was the theory, the business theory behind why 0:04:30.680 --> 0:04:33.560 sputting up Hulett Packard a very successful company in the 0:04:33.600 --> 0:04:34.599 two separate companies. 0:04:34.600 --> 0:04:36.400 Why was that going to be such a great idea? 0:04:36.839 --> 0:04:40.360 I think the main theory, which at least in our case, 0:04:40.400 --> 0:04:42.800 have proven to be true, was focus. 0:04:43.880 --> 0:04:45.240 HP was a very big company. 0:04:45.240 --> 0:04:48.960 We were selling from printers to service data centers, all 0:04:49.000 --> 0:04:52.119 sorts of technology products, and the theory that the board 0:04:52.120 --> 0:04:54.680 had at that point was that focus was very important. 0:04:55.000 --> 0:04:58.240 Each market was moving in a different direction, we were 0:04:58.240 --> 0:05:01.359 competing with different companies, so being focus, being able to 0:05:01.400 --> 0:05:04.359 invest in our segments was the critical thing, and in 0:05:04.400 --> 0:05:05.800 our case has proven to be right. 0:05:05.839 --> 0:05:08.120 So when a company is split occurr in twenty fifteen, 0:05:09.040 --> 0:05:12.320 many people thought that Hewlett Packard Enterprises, which was in 0:05:12.360 --> 0:05:15.920 the sexual area of software and services, would. 0:05:15.680 --> 0:05:17.040 Become more valuable. 0:05:17.240 --> 0:05:19.480 But actually your company is now has a higher market 0:05:19.560 --> 0:05:22.359 capitalisation than Helot Packard Enterprises. 0:05:22.440 --> 0:05:24.839 Is that make you sad or happy? 0:05:25.960 --> 0:05:30.440 I only I'm only concerned about what happens with our company. 0:05:30.560 --> 0:05:33.640 And as I said, the separation has been good for us. 0:05:34.200 --> 0:05:37.680 We have proven that we can create value to two shareholders. 0:05:38.120 --> 0:05:41.240 Our ts are in the last seven years has been 0:05:41.279 --> 0:05:44.760 two hundred percent, significantly higher than the average of the market. 0:05:45.080 --> 0:05:47.760 So we have done well and what is more important. 0:05:48.120 --> 0:05:51.480 We have a lot of opportunities and ideas of how 0:05:51.480 --> 0:05:53.160 to continue to make the company better. 0:05:53.240 --> 0:05:58.520 You compete against I guess Dell and Lenovo and also Apple. 0:05:58.600 --> 0:06:02.000 I assume which of your which o those companies makes 0:06:02.000 --> 0:06:06.200 the best personal computer? What you say really and is 0:06:06.279 --> 0:06:08.440 what makes your computer better? Why should I want to 0:06:08.440 --> 0:06:10.839 buy yours over somebody else? Aren't they all really pretty 0:06:10.880 --> 0:06:11.880 much the same? At this point? 0:06:12.600 --> 0:06:16.560 I think there are three big differentiations for our products, 0:06:16.680 --> 0:06:18.039 especially in the piece space. 0:06:18.480 --> 0:06:19.640 One is security. 0:06:20.080 --> 0:06:23.800 Cyber security is every time more important, and we build 0:06:23.839 --> 0:06:27.400 both software and hardware in our PCs to make them 0:06:27.400 --> 0:06:33.479 more secure. Second big differentiation is industrial design. We have 0:06:33.600 --> 0:06:36.559 made a big effort to make our preces the best 0:06:36.560 --> 0:06:39.240 looking pieces, the most attractive, and the ones that have 0:06:39.880 --> 0:06:44.039 the better use model. And finally is sustainability. We think 0:06:44.080 --> 0:06:47.320 that sustainability is really important and we use in our 0:06:47.440 --> 0:06:52.440 PCs all type of materials that are environmentally friendly, from 0:06:52.800 --> 0:06:56.000 plastic that we get from the oceans, to coffee beans 0:06:56.040 --> 0:06:58.839 to You can look at our portfolio and see any. 0:06:58.960 --> 0:07:01.320 Type of matiityre do you sell them? And you don't 0:07:01.320 --> 0:07:03.520 have HP stores the way Apple has stores, So where 0:07:03.520 --> 0:07:04.680 do you sell your computers. 0:07:05.200 --> 0:07:08.600 It actually depends country by country. In the US, for example, 0:07:08.720 --> 0:07:11.840 we sell online on HP dot com or on Amazon. 0:07:12.400 --> 0:07:16.320 You can buy our products in any large consumer electronics 0:07:16.360 --> 0:07:20.720 retailer like Best Buy. But also for commercial customers, we 0:07:20.800 --> 0:07:24.200 have a big network of free sellers, commercial resellers that 0:07:24.280 --> 0:07:27.280 will sell our product and for our top customers, we 0:07:27.360 --> 0:07:30.360 have a dairy Excel force. In other countries, we have 0:07:30.600 --> 0:07:33.240 our own stores you do. For example, in India, we have 0:07:33.320 --> 0:07:36.520 more than five hundred stores that really we use. 0:07:37.680 --> 0:07:40.120 India rate five hundred stores and the US rates non. 0:07:40.880 --> 0:07:44.119 Because of the structure of the distribution and retail model 0:07:44.360 --> 0:07:47.920 in India, there is not an electronic retail network in 0:07:48.000 --> 0:07:50.120 many of the cities, so we had to build our 0:07:50.160 --> 0:07:53.320 own to be able to really reach consumers anywhere in 0:07:53.320 --> 0:07:56.200 the country. And we continue to expand because we see 0:07:56.200 --> 0:07:58.080 continue to see a big opportunity. 0:07:58.320 --> 0:08:01.280 So pose I buy one of your computers and then you, lady, 0:08:01.280 --> 0:08:03.480 you have another model. Can I trade it in and 0:08:03.520 --> 0:08:05.240 get a discount Like a car, I can trade them 0:08:05.240 --> 0:08:06.040 when I buy a new car. 0:08:06.520 --> 0:08:08.240 Don't you don't have trade ends or anything. 0:08:08.040 --> 0:08:09.960 Like that today today we don't. 0:08:10.480 --> 0:08:13.040 But this is one of the businesses that we're starting 0:08:13.040 --> 0:08:17.320 to develop, both because we see we can really help 0:08:17.360 --> 0:08:21.200 customers to always stay on the latest technology, but also 0:08:21.240 --> 0:08:25.440 because from a sustainability perspective, recycling and refurbishing is a 0:08:25.520 --> 0:08:27.320 very important thing to do. So we are going to 0:08:27.400 --> 0:08:29.400 be building that model at scale. 0:08:29.520 --> 0:08:33.280 Right, So where are your computers manufactured today? 0:08:33.400 --> 0:08:35.600 Majority are still produced in China. 0:08:35.800 --> 0:08:36.359 China? 0:08:36.440 --> 0:08:38.319 And are you worried about somebody putting a chip in 0:08:38.360 --> 0:08:40.959 the air that can enable the Chinese government to listen 0:08:40.960 --> 0:08:41.600 to what you're doing? 0:08:41.679 --> 0:08:43.600 Is you're worried about that? Or should I worry about that? 0:08:44.040 --> 0:08:46.960 You should not worry about that, because we worry about that, okay. 0:08:47.080 --> 0:08:47.839 And what we. 0:08:47.880 --> 0:08:50.440 Have built is what we call a secure supply chain 0:08:50.880 --> 0:08:54.959 through so across every step of the manufacturing process, we 0:08:55.080 --> 0:08:59.520 control anything that is inside of our printers, inside the chiefs, 0:08:59.559 --> 0:09:02.240 inside the sover to make sure that the printers, the 0:09:02.240 --> 0:09:03.560 PCs are the printers as we are. 0:09:03.600 --> 0:09:06.160 You're worried about being too dependent on China for your 0:09:06.200 --> 0:09:09.439 manufacturing because there could be us problems with China. 0:09:09.440 --> 0:09:12.040 Who knows what can happen? Why not diversify? 0:09:12.880 --> 0:09:17.640 Actually we are diversifying. We realized and learned painfully during 0:09:17.679 --> 0:09:22.160 Covid as many other companies, that depending on a specific 0:09:22.240 --> 0:09:26.480 territory or having too much dependency was too risky, and 0:09:26.520 --> 0:09:30.840 that the what we had done over many years of 0:09:30.880 --> 0:09:34.520 really pushing for a cost and therefore concentrated non manufacturing 0:09:34.520 --> 0:09:39.040 in one place created some the issues from a resiliency perspective. 0:09:39.440 --> 0:09:43.319 So since then we have been diversifying to increase resiliency. 0:09:43.640 --> 0:09:46.120 And this is a process that we embarked a few 0:09:46.200 --> 0:09:47.720 years ago that is going to take some time, but 0:09:47.800 --> 0:09:49.120 clearly we are doing that. 0:09:49.160 --> 0:09:51.800 But the key is the semiconductors of the chips and 0:09:52.000 --> 0:09:54.000 where are the chips made in China or the made 0:09:54.000 --> 0:09:55.239 in Taiwan or US. 0:09:55.040 --> 0:09:59.439 Or majority today are still built in Taiwan. We are 0:09:59.480 --> 0:10:02.040 working with all the key chip providers to make sure 0:10:02.280 --> 0:10:06.040 we diversify with the location. And this is why, for example, 0:10:06.120 --> 0:10:08.560 last year we were very supportive of the Chips Act 0:10:08.920 --> 0:10:13.040 because getting government funds to accelerate the change, we think 0:10:13.160 --> 0:10:13.840 is very important. 0:10:13.920 --> 0:10:16.480 So when you're at your home and you're working on 0:10:16.520 --> 0:10:18.880 a computer, do you ever use the opposition or the 0:10:18.880 --> 0:10:20.840 competitors to see what they're doing or you only can 0:10:20.920 --> 0:10:21.400 use HP. 0:10:22.280 --> 0:10:25.640 I use both, as you can guess I have lots 0:10:25.640 --> 0:10:28.760 of hppcs at home because every time there is something new, 0:10:28.800 --> 0:10:33.640 the team was me to train and sometimes they don't 0:10:33.720 --> 0:10:35.760 like it because I find things they didn't like me 0:10:35.800 --> 0:10:38.320 to find. So I give a lot of feedback, but 0:10:38.480 --> 0:10:41.360 of course I test also the latest innovation from our 0:10:41.400 --> 0:10:43.600 competitors to make sure I understand. 0:10:43.320 --> 0:10:46.520 You work at your competitors computers and say why don't 0:10:46.559 --> 0:10:46.920 we have this? 0:10:47.080 --> 0:10:48.360 And can't we don't have that? 0:10:48.679 --> 0:10:50.480 You ever ask yes, and the team hated it? 0:10:52.160 --> 0:10:55.680 And how do you protect against hacking? And how do 0:10:55.720 --> 0:10:58.720 you kind of give your people who are customers warning 0:10:58.720 --> 0:11:00.920 about what they're going to say if a hacker is 0:11:00.920 --> 0:11:01.360 coming in. 0:11:02.320 --> 0:11:04.319 What we have done is we. 0:11:04.400 --> 0:11:08.800 Have developed both software and hardware to protect our pieces. 0:11:09.200 --> 0:11:12.680 For example, in any of our commercial pieces, we have 0:11:12.760 --> 0:11:17.360 achieved embedded in the board that detects if the BIOS 0:11:17.440 --> 0:11:19.839 has been modified. The BIOS is kind of the brain 0:11:19.880 --> 0:11:22.080 of the PC, so we can detect if there has 0:11:22.120 --> 0:11:24.719 been any intrusion in the BIOS and if we detect that, 0:11:25.080 --> 0:11:27.640 we can restore it to the regional level. This is 0:11:27.679 --> 0:11:30.679 a unique technology that HP has that really helps to 0:11:31.120 --> 0:11:35.199 protect our pieces, and we have many other software developments 0:11:35.200 --> 0:11:37.040 in other layers to do similar things. 0:11:37.160 --> 0:11:39.760 You make servers as well, No, we only do pieces. 0:11:40.200 --> 0:11:42.840 We do workstations, which is a very high end type 0:11:42.880 --> 0:11:44.400 of PC, but we don't do servers. 0:11:44.800 --> 0:11:49.440 You make cartridges, right, and the printers. So on printers, 0:11:50.000 --> 0:11:52.880 it's one printer really different than another from your competitors. 0:11:53.360 --> 0:11:55.000 Aren't all the printers pretty much the same? 0:11:56.679 --> 0:11:58.000 Printers are fairly different. 0:11:58.040 --> 0:12:00.920 In fact, there is more difference print to printer than 0:12:00.920 --> 0:12:04.400 PC to PC because printers are a totally integrated business. 0:12:04.679 --> 0:12:07.280 So we develop the printer, we develop the ink, we 0:12:07.400 --> 0:12:11.520 develop the cartridge. Is a much more vertically integrated model 0:12:11.559 --> 0:12:12.920 that dries more differentiation. 0:12:13.080 --> 0:12:15.560 Is the printing business a growth business because people now 0:12:16.160 --> 0:12:18.840 printing stuff as much, they're just sending it by email 0:12:19.080 --> 0:12:22.200 or computer digital means to other people. So is printing 0:12:22.200 --> 0:12:25.320 a growth business or it's kind of a shrinking business. 0:12:25.360 --> 0:12:28.040 In printing, there are three very different segments. 0:12:28.520 --> 0:12:31.240 There is what we call home printing, so printers you 0:12:31.280 --> 0:12:34.240 will buy to use at home, to print photos or 0:12:34.280 --> 0:12:37.199 to print email. This is clearly a not growing business. 0:12:37.720 --> 0:12:41.240 Then we have an office segment people copiers printers that 0:12:41.280 --> 0:12:43.280 you will do in the you will use in the office. 0:12:43.640 --> 0:12:46.679 That's a market that is table is declining in more 0:12:46.720 --> 0:12:50.000 developed countries, is growing in emerging countries. And then we 0:12:50.080 --> 0:12:54.680 have a third segment, which is industrial printing. Industrial printing 0:12:54.720 --> 0:12:59.600 means printing labels, packaging, this type of and this is 0:12:59.640 --> 0:13:00.720 a significantly go. 0:13:00.920 --> 0:13:04.440 I actually do have an HP printery good, but the 0:13:04.480 --> 0:13:06.719 cartridge is always running out. I'm running out of ink 0:13:06.760 --> 0:13:10.560 all the time. So is that a problem? How do 0:13:10.600 --> 0:13:12.960 I how do I know where my ink is going 0:13:13.040 --> 0:13:15.000 to be out and right in the middle of printing something. 0:13:15.320 --> 0:13:18.840 Is that a big problem that you guys have, which 0:13:18.880 --> 0:13:19.520 I do about it. 0:13:19.679 --> 0:13:23.239 When we talk to customers, they always have two concerns 0:13:23.240 --> 0:13:26.880 about printing. One is what Jja said, I want to 0:13:26.920 --> 0:13:30.600 print my kid has finished homework. I need to print homework. 0:13:30.720 --> 0:13:33.160 The print is not working because the cartridge is not working. 0:13:33.840 --> 0:13:37.199 Second complaint that we have is printing is expensive. I 0:13:37.280 --> 0:13:40.920 really hate paying fifty dollars forty five dollars fifty five 0:13:40.960 --> 0:13:43.840 dollars for the cartridge. And we have a solution for that. 0:13:44.200 --> 0:13:48.079 We have created a subscription model where we monitor the 0:13:48.120 --> 0:13:50.200 amount of ink that is being used in the printer. 0:13:50.679 --> 0:13:53.440 Customers pays for the number of pages the print per 0:13:53.480 --> 0:13:56.800 month and before the printer runs out of ink, we 0:13:56.920 --> 0:14:00.280 send a new cartridge to customers and by doing that, 0:14:00.640 --> 0:14:03.760 depending on your volume, you can save up to seventy 0:14:03.840 --> 0:14:07.120 percent of I mean, you print seventy percent cheaper. 0:14:07.320 --> 0:14:10.320 What are you doing about carbon and your global footprint? 0:14:10.440 --> 0:14:12.680 We have an aggressive plan to reduce that to be 0:14:12.840 --> 0:14:16.600 carborn by twenty thirty and we are working in the 0:14:16.640 --> 0:14:19.240 areas of the company where we have more impact. Because 0:14:19.280 --> 0:14:21.600 of the products that we build, we use alls of plastic, 0:14:22.200 --> 0:14:26.560 so we have an important initiative to use a recycled 0:14:26.600 --> 0:14:30.080 plastic in any of our products. We are also I 0:14:30.160 --> 0:14:33.280 mentioned before, we are going to be changing business models 0:14:33.320 --> 0:14:36.880 to move into referbised products. 0:14:36.920 --> 0:14:40.000 So we live, we give to our products toward the lives. 0:14:40.400 --> 0:14:42.480 And finally, and one of the things that I feel 0:14:42.560 --> 0:14:46.560 most proud of in this space is people always associates 0:14:46.960 --> 0:14:51.680 printing with paper, paper with trees, and therefore, if you print, 0:14:51.840 --> 0:14:55.280 you're doing something wrong for the environment. So what we 0:14:55.400 --> 0:14:58.760 have is an initiative that we call forest positive printing. 0:14:59.120 --> 0:15:01.520 So we look at the amount of print paper that 0:15:01.640 --> 0:15:04.600 is used in our printers, if that paper is not 0:15:04.720 --> 0:15:08.400 coming from recyclable forests, for forests that have been planted 0:15:08.440 --> 0:15:11.880 to create paper. We plant trees and we have programs 0:15:11.960 --> 0:15:14.360 of reforestation to compensate for that. 0:15:14.560 --> 0:15:19.200 Silicon Valley companies are not famous for diversity, So what 0:15:19.240 --> 0:15:19.720 do you do. 0:15:19.680 --> 0:15:20.280 In that regard? 0:15:20.400 --> 0:15:22.400 You have a program that I'm sure you have some 0:15:22.400 --> 0:15:23.360 fair amount of diversity. 0:15:23.440 --> 0:15:24.080 We take it. 0:15:24.000 --> 0:15:28.040 Extremely seriously and for example, my compensation and the compensation 0:15:28.200 --> 0:15:32.120 of my direct team is dependent on the progress that 0:15:32.160 --> 0:15:33.160 we make on diversity. 0:15:33.280 --> 0:15:35.000 Also, I want to buy a computer, but I want 0:15:35.800 --> 0:15:37.840 I want to have AI in my computer. I want 0:15:37.840 --> 0:15:40.240 to be really up to date. Do you have AI 0:15:40.360 --> 0:15:41.320 and your computers yet? 0:15:42.200 --> 0:15:45.920 Not yet, but it is coming soon and we think 0:15:45.960 --> 0:15:48.680 this is going to be one of the largest transformations 0:15:48.720 --> 0:15:52.920 in the PC industry in decades. What will be possible 0:15:53.040 --> 0:15:59.200 starting this summer is to run large language models in AIPCS, 0:15:59.600 --> 0:16:02.680 which means that what today all of us are doing 0:16:02.760 --> 0:16:05.040 in the cloud, where you use any of the applications 0:16:05.080 --> 0:16:07.720 that you can, you will be able to do it locally. 0:16:08.200 --> 0:16:10.120 And what this means, which is why we think this 0:16:10.360 --> 0:16:13.280 is important, is it will be much better from a 0:16:13.440 --> 0:16:17.080 cost perspective, because running models in the cloud is expensive. 0:16:17.720 --> 0:16:20.720 It will be better from a security perspective because you 0:16:20.760 --> 0:16:23.120 will be able to use the model with your own 0:16:23.200 --> 0:16:26.520 data locally without having to upload your data to the cloud, 0:16:26.800 --> 0:16:29.080 and you will be able to do it anywhere in 0:16:29.160 --> 0:16:32.680 the world. And also for applications where speed is important, 0:16:32.720 --> 0:16:35.400 where latency is important, you will be able to do 0:16:35.440 --> 0:16:38.320 it locally much faster. For example, in gaming, where you 0:16:38.400 --> 0:16:41.760 are where the game needs any resource the computer have, 0:16:42.240 --> 0:16:43.920 it will be a much better model. So it's going 0:16:43.960 --> 0:16:46.520 to be a big change starting this summer at the 0:16:46.560 --> 0:16:50.640 same price too, slightly higher price, but if we look 0:16:50.680 --> 0:16:53.360 at the increase of price versus the increase of value, 0:16:53.680 --> 0:16:54.720 not comparable. 0:16:54.280 --> 0:16:55.440 With one of your competitors. 0:16:55.560 --> 0:16:57.960 Apple has recently come out with a product that is 0:16:58.000 --> 0:16:59.440 they called spatial computer. 0:17:00.160 --> 0:17:02.800 It's like a virtual reality. Do you have that kind 0:17:02.840 --> 0:17:06.359 of product yet, And we have had a similar product 0:17:06.400 --> 0:17:09.760 for some time. Focus on two spaces. One was gaming, 0:17:10.200 --> 0:17:13.320 one was in some commercial usance. And we think that 0:17:13.520 --> 0:17:16.879 over time this category is going to grow. But what 0:17:17.040 --> 0:17:20.359 we really think is that computing is going to become 0:17:20.800 --> 0:17:24.320 we call it immersive. That today we interact with computers 0:17:24.400 --> 0:17:26.719 through a screen or through a keyboard, more and more 0:17:26.800 --> 0:17:29.359 we are going to interact with our full body, with 0:17:29.920 --> 0:17:32.800 our gestures, with and this is the trend that we 0:17:32.920 --> 0:17:36.119 are we are pushing for. You will see this in 0:17:36.280 --> 0:17:38.960 some models like what Apple has done. There are also 0:17:39.240 --> 0:17:42.320 very interesting concepts where you interact with holograms and we 0:17:42.400 --> 0:17:46.120 are really exploring a multitude of different things which one 0:17:46.160 --> 0:17:48.200 will win. At this point it is difficult to see, 0:17:48.240 --> 0:17:50.159 but clearly immersive is the future. 0:17:50.320 --> 0:17:52.199 Or somebody comes and says, look, I don't really care 0:17:52.240 --> 0:17:55.159 about price. I'm not price sensitive. Sell me whatever you got, 0:17:55.200 --> 0:17:57.080 give me your best stuff. I mean, what's somebody going 0:17:57.119 --> 0:17:59.080 to spend that five thousand dollars or something for. 0:17:59.640 --> 0:18:02.679 A con five thousand dollars? So we have products at 0:18:02.760 --> 0:18:06.120 five thousand dollars for a business customer. If you want 0:18:06.160 --> 0:18:09.159 to buy the top of the line workstation with the 0:18:09.240 --> 0:18:13.399 top of the line processor ten fifteen thousand dollars. 0:18:14.000 --> 0:18:14.200 Wow. 0:18:14.760 --> 0:18:16.840 So if somebody goes into your stores in India and 0:18:16.880 --> 0:18:19.040 they spent five thousand for a personal computer, that they 0:18:19.119 --> 0:18:21.080 call you up and side. We just sold somebody a 0:18:21.119 --> 0:18:23.200 five thousand dollars personal computer. They don't call you about 0:18:23.240 --> 0:18:24.480 that since you mentioned it. 0:18:24.960 --> 0:18:28.200 This summer we were in India, so I decided to 0:18:28.280 --> 0:18:30.399 go to some of our stores without telling them who 0:18:30.480 --> 0:18:32.480 I was, so you should see the faces. 0:18:32.560 --> 0:18:34.760 When I went to the store, they look at me. 0:18:35.520 --> 0:18:38.200 I asked them about what products they were selling, and 0:18:38.240 --> 0:18:39.560 at some point I said, well, you know, I'm the 0:18:39.600 --> 0:18:42.639 sea of the company, and they became white. 0:18:44.640 --> 0:18:46.040 First war Like they didn't believe it. 0:18:46.119 --> 0:18:48.400 They didn't believe it, or after a while. 0:18:48.240 --> 0:18:50.560 They believed it, but some of them look at the 0:18:50.640 --> 0:18:51.720 web to make sure it was me. 0:18:52.000 --> 0:18:55.479 Okay, why should somebody want to join Hula Packard as 0:18:55.480 --> 0:18:57.840 an employee? Why is it better than working at Apple 0:18:58.000 --> 0:18:59.760 or one of the other competitors that you might have. 0:19:00.560 --> 0:19:05.280 So when when Ivy CEO, we define four objectives for 0:19:05.400 --> 0:19:08.800 the company and one of the four objectives is to 0:19:09.119 --> 0:19:13.119 become a school of talent. And our value proposition to 0:19:13.200 --> 0:19:16.400 employees is that they can join the company, they will 0:19:16.520 --> 0:19:21.399 learn their job, they will be able to experience multiple businesses, 0:19:21.560 --> 0:19:24.600 multiple functions if they want. They can live in multiple 0:19:24.640 --> 0:19:27.280 countries just because of the presence that we have. So 0:19:27.440 --> 0:19:31.200 we really focus on employee development as the key value proposition, 0:19:31.600 --> 0:19:34.200 to the point that we say when someone leaves, we 0:19:34.400 --> 0:19:39.000 celebrate the graduation because really that person has learned from 0:19:39.119 --> 0:19:42.080 us and has developed. And this also gives us opportunity 0:19:42.119 --> 0:19:44.920 to bring someone new, to bring someone younger, to continue 0:19:44.960 --> 0:19:45.399 to reference. 0:19:45.480 --> 0:19:47.960