That’s where Executive VP for Printing and Imaging Vyomesh Joshi comes into the picture. You probably won’t see his photo on the front page of the national newspapers every day, as is the case with Fiorina. But as head of the company’s most profitable division, he is situated at the epicenter of what has become one of the most public transitions, deals, and proxy battles in the history of corporate America.

The anti-merger Hewlett camp has continually questioned the reasoning behind adding a whole new chunk of unprofitable computer business — i.e. Compaq — to an HP that is, for now, half unprofitable computer company and half highly profitable printing and imaging company. Joshi, as head of the $20 billion HP Imaging and Printing division, will need to ensure not only that his division continues to hold up its end of the bargain, but that he can actually leverage the merger to move things onward and upward.

It promises to be a tough task to say the least.

HP Way — Losing it’s Way?

Critics and skeptics of HP/Compaq abound. U.S. Bancorp Piper Jaffray Managing Director and Senior Research Analyst Ashok Kumar is not one to hide his views. And among his various warnings about the deal, perhaps the most obviously worrisome is his assessment that as HP struggles, its people will start to leave.

“Senior level guys at HP that are lifers — they are waiting to get their pension check so they can bolt,” says Kumar. He also feels that those who remain at HP after the 15,000 to 25,000 headcount reduction that is likely to come as a result of the merger will be not the best people, but those who are best able to manage internal company politics.

This is a pretty scathing portrayal of the current state of the legendary “HP way,” a management philosophy of employee empowerment that has been spoken about by both proponents and opponents of the merger. Joshi, as a showcase product of the HP way, naturally stands in complete opposition to Kumar’s views.

After coming to the U.S. in 1978 to do a masters at Ohio State, he Joined HP in 1980 and never stopped rising through the ranks. In 1984 he started working on Inkjet technology, and became the program manager for the first Inkjet cartridge — which was introduced in 1987.

He remembers, “it was fascinating. I had physicists, chemists, mechanical engineers and electrical engineers reporting to me. And we were not sure at that time whether this technology was going to work out. We were not even sure if we would be able to print color accurately.” The passion for his business that rises in Joshi’s voice is obvious. After his work on the Inkjet he went on to work in a number of different divisions including large format printing, all-in-one printer, copier and fax machines, and digital imaging before rising to his position as one of the top executives at the company.

In Joshi’s mind, his success building a variety of diverse new businesses for the company is central to what he holds dear about the HP way. “I love HP. It’s a very special place. The reason is that I think we are empowering our employees to contribute and start working on building businesses at a very low level of seniority.” Given the negative publicity and constant mud-slinging in the air, Joshi is conscious that now more than ever he has to make sure his employees feel this sense of empowerment in their jobs. He suggests that he and all other executives are in a “listening mode,” trying to satisfy employee concerns. HP is doing product fairs at its locations, where employees are given a taste of future products to get them excited about the direction in which the company is headed.

But like it or not, the outlook for HP promises tough times. A conversation with Joshi, whose bright blue eyes engage one with intensity, as he speaks about how much HP as a company means to him, is enough to suggest that it may not yet be time to write an obituary for the HP way. He is a product of it, and seems intent on preserving the essence of innovation and market creation that has defined HP. But one has to wonder at the management task he has ahead of him — to dispel all of the speculation that HP is sadly in a state of gradual and inevitable decline.

Tough Times

As Kumar sees it, the HP Compaq deal is a collision of two troubled giants that doesn’t fundamentally solve any of the problems inherent in the existing state of affairs. Kumar, who covers Compaq, says of that company’s computer business: “They have an expense ratio that is well beyond or above industry leader Dell. So essentially they end up wrapping a $20 bill around every PC they sell. Those dynamics don’t change.” As for HP’s consumer division, Kumar points out that given the level of commoditization in that business, logistics are the only differentiator — where once again everybody pales in comparison to Dell.

As for synergies between the merging entities, Kumar suggests, “There are possible synergies between HP’s Unix and Compaq’s Alpha division. But I think the customer defection will more than offset that. Anyway, the Unix server business is essentially a two horse race between IBM and Sun, and HP has essentially fallen off a cliff.”

“The bottom line is that no company in history has been able to buy itself out of mediocrity,” Kumar says. His take: A great deal for Compaq shareholders, a poor one for HP shareholders.

However much credence you place in Kumar’s harsh words, the state of affairs isn’t altogether promising. Of course Joshi’s printing and imaging division is still doing well (it’s a bigger business than Cisco Systems). But though it’s a marquee cash cow for HP, which has a massive installed base (50 percent market share in Lazerjet and 35 percent market share in Inkjet), it is by no means a foolproof money machine that will keep on giving whatever the circumstances.

Competitors like Lexmark are making inroads into HP’s staple Inkjet and Lazerjet businesses. Kumar cautions, “The dynamics of the market are such that the printers are sold at negative margins. On consumables [cartridges] the margins are 65 percent. The consumables profits are dependent on growth in the company’s installed base.” And growing that installed base isn’t a sure thing.

Digital Transformation

Joshi is far from sitting idle, just watching the profits come in from his staple Inkjet and Lazerjet business. He is very much on the offensive — trying to tap into new markets and ensure a new generation of innovation for HP. In his eyes, these days feel like the early days when he was developing the Inkjet. He is clearly hoping that his new endeavors are as successful.

The two areas where Joshi is pushing the most aggressive growth are digital imaging and commercial printing. The idea, in many respects, is to take printing and imaging and turn it from a simple “box business” into more of a solutions, consulting and services-based business.

The vision for the commercial printing division seems perhaps the most ambitious. In September, HP acquired Indigo, for $882 million. Indigo’s technology for digital-based commercial color printing, is, according to Joshi, the only system of its kind in terms of delivering the highest quality digital color printing at high speeds and with a reasonable cost of ownership.

Though commercial printing (of magazines, newspapers, marketing materials etc.) is a $400 billion industry, 96 percent of pages printed in the world are on traditional Heidelberg-style presses. Of the roughly 400,000 leading commercial printers worldwide, Joshi plans to pick maybe 10,000 that want to go digital.

The ambitious plan is to work with those printers and provide them with Indigo presses and digital printing infrastructure to handle big digital jobs. The next step is to work with the CIOs and executives of large companies to convince them to do their marketing collateral or other printed materials digitally, and then funnel that business to the presses installed with Indigo technology.

Though digital commercial printing can’t compete on price per page with traditional methods, it could offer significant advantages. Customization seems to be a significant benefit. “We could use our IT expertise to really work with companies who are developing CRM systems. And build gateways where we can take the CRM info and the content creation and do personalized customized marketing collateral,” Joshi explains. A company, if it needs to, could print only 10 customized items rather than do a run of 10,000. “It takes 37 days and 25 steps to do marketing collateral right now,” Joshi points out. “We think we can take that into hours.”

In this scenario, the need for consultants and a services organization to execute on the sales and solutions implementation strategy becomes key, and Joshi sees this as one of the benefits of the Compaq merger, which he deems will strengthen HP’s services and IT business. Joshi will also incubate his own printing and imaging services organization.

On the digital imaging side, Joshi also likes his position, since HP is the only company with both capture and printing capabilities — so that it competes with an end-to-end solution against companies like Sony on the capture side, as well as Epson and other printer competitors.

But he is not about to suggest that these long-term strategies will all be a walk in the park for HP. “We need to make our content transformation capabilities real. These are good concepts but we have a lot of hard work to do to go from boxes to solutions and really utilize our assets.” Competition will obviously be significant. On the digital commercial printing side, Xerox is a major player. And it will take time to undo years of established business practices in the printing industry.

Joshi is fervently committed to this next burst of innovation. The challenge will be to execute it in an ailing HP. Clearly the technology industry slowdown, September 11, a workforce reduction and the public proxy fight have created a lot of concerns and given HP the biggest challenge it has ever faced.

“The most important thing now is to connect with employees and see where their concerns are,” says Joshi. Those concerns are clearly many.

“Nobody would miss it if Compaq disappeared off the radar screen, whereas HP is a Silicon Valley institution,” says Kumar. The future of HP may not rest entirely on Joshi’s plans in the printing and imaging division, but it’s also safe to say that without continued strong performance from Joshi’s division the outlook is very bleak indeed for HP.

For the sake of a legendary company, one can hope Joshi pulls off a piece of corporate magic.