Ever since she became Marisa Bellisario's heiress at the top of Italtel, Patrizia Grieco, one of the few Italian top managers since before female quotas were invented, has always had a taste for impossible challenges. When three years ago the number one of Telecom Italia, Franco Bernabè, called you to lead Olivetti entrusting you with the chair of CEO, many doubted that she would be able to resurrect a company full of emblems but practically rotten like that of Ivrea . But, if relaunching Olivetti might have seemed like a challenge bordering on the reckless, the market launch of Olipad, the first Italian tablet after the iPad boom, seemed no less audacious in early spring. It's too early to tell if Patrizia Grieco's Olivetti will win the challenge of the tablet, but the numbers of the first three months and the projects that are about to be implemented seem to prove her right this time too. “One thing is certain: Olipad is already at break even today”, says the CEO of Olivetti in this interview with FIRSTonline.info.
FIRSTONLINE – Doctor Grieco, three months ago Olivetti decided to enter the tablet market with Olipad: in the face of the Ipad boom, isn't that a desperate undertaking?
GRIECO – To answer, we have to imagine that the tablet market is divided into two parts: the first half is monopolized by Apple and is, at least for now, impregnable, but the second half is a free territory that can also be attacked by smaller players such as we. It is exactly in this second part of the market that we have positioned ourselves with a product like Olipad which is competitive in terms of price, because it costs around €200 less than the iPad and offers customized applications for the business world where Olivetti has more than one card to play.
FIRSTONLINE – At the time of its launch, you announced that Olivetti's goal is to sell 2011 Olipads in 100 in a market that absorbs 1 million tablets a year in Italy and over 44 million tablets worldwide: no Does that seem too ambitious a goal?
GRIECO – From the trend in the first few months, I'd say absolutely not. We started at the beginning of March and in less than three months we are already in line with our plans, which are deliberately conservative. The numbers speak for themselves.
FIRSTONLINE – How many Olipads have been sold so far?
GRIECO – In Italy alone we are delivering, at the request of distributors, around 30 thousand by July, which is an excellent result for us and in line with our objectives which are focused on customers on the move. If we add to the Italian result the potential of the foreign market and in particular of Europe and Brazil and Argentina, where we are only now entering with our tablet but where the presence of the Telecomitalia group is very significant, it is clear that the the goal of 100 Olipads to be sold within the year is anything but unrealistic.
FIRSTONLINE – How many Olipads do you plan to sell in Italy and how many abroad?
GRIECO – Half on the domestic market and the other half abroad and above all in South America, taking advantage of the synergistic offer with Telecomitalia.
FIRSTONLINE – Is the target of your tablet the consumer market or the business market?
GRIECO – Both. In our sales plans, the consumer market represents about 30% of the total and the business market the other 70%.
FIRSTONLINE – How do you plan to attack them? Is the Tim-Telecom distribution network capable of enhancing a new commercial offer such as that of your tablets?
GRIECO – As far as the consumer offer is concerned, we leverage the Telecomitalia group's distribution channels, but we don't neglect other potential that we want to exploit – starting from September – in the large consumer electronics distribution networks. As far as the business market is concerned, the tablet is proving to be an ideal tool for serving the world of mobility by focusing on know-how, on the sales network of Olivetti dealers, on customer proximity service, also thanks to qualified and widespread assistance. Let's not forget that Olivetti can count on 4 operators and technicians distributed throughout the country.
FIRSTONLINE – When will you start earning by selling Olipad?
GRIECO – We are already at break even now and this in itself is a great result. If we reach, as everything suggests, 100 tablets sold within the year, we will make profits capable of improving the overall income statement, which is already driven by the most innovative offer, without counting the effects of the applications. Consider that out of a worldwide market of 44,6 million tablets, the value of the applications market is 30 billion dollars. In addition, Olivetti has other innovations in store that will soon be launched on the market.
FIRSTONLINE – In tablets or elsewhere?
GRIECO – Even in tablets, because the game is open and we want to play it in the best possible way, increasingly modulating our offer on market expectations and focusing on price competitiveness and product quality. Within the year we will launch two new Olipad models maintaining a competitive price positioning, value for money. A 10-inch tablet, like the one currently on the market but thinner and with a better screen, and a 7-inch tablet, more thinner and more agile but with excellent visibility.
FIRSTONLINE - The tablet is only the latest of the innovations launched under your management by Olivetti and last year there was the new range of netbooks/notebooks and in the summer of 2009 the HDO document management platform: it means that Has Olivetti realized that it is at the crossroads between renewing itself or perishing and that continuous innovation is the guarantee of survival?
GRIECO – Yes, innovation is the key to survival, but this doesn't only apply to Olivetti. It applies to everyone. A third of the companies that in 1970 made the Fortune 500 list of major American corporations in 1983 had already disappeared. 98% of US companies do not live longer than 11 years and in Europe and Japan the average life of companies is 12 years. Many large ICT companies are no longer on the market: think of Compaq, Burroughs, Bull, NCR, Mita, Minolta and many others. Today the new giants are young: Google was born in 1999, Facebook in 2004. The entire reference scenario is changing and the world of Information Technology – which is worth 1.177 billion dollars – is undergoing epochal revolutions that are transforming the market. Skills, rules, assets change and the rate of innovation is very high, but no company alone can replicate the innovation capabilities of the market. Today innovation follows a hybrid model, it is no longer just endogenous and success depends more and more on the ecosystem.
FIRSTONLINE – Italy, however, does not seem to be in great shape.
GRIECO – Unfortunately the economic and financial crisis has complicated everything and Italy – where IT, including software, technical assistance and hardware, is worth more than 18 and a half billion euros but suffers from a low digital culture of companies and the population – will have to wait until the end of 2011 to stop the losses suffered in recent years. We hope that sooner or later it will be understood that investment in ICT is not optional and that every euro spent on ICT generates 1,45 euro of GDP.
FIRSTONLINE – In this constantly changing context, how is Olivetti repositioning itself?
GRIECO – Until two years ago, Olivetti was still focused on IT products. Faced with the evolution of the ICT market and the new opportunities offered by the Cloud, especially in synergy with the Telecomitalia group, since 2009 we have designed a new strategy from HW to Solution Provider with the development of an integrated HW and SW offer, customized for the customer and supported by a capillary assistance network. This is the background from which the new products were born: the HDO document management platform, the new range of netbooks/notebooks with integrated PC and data protection services and now Olipad, the first Italian tablet on the market, which, like the other handsets in Olivetti's portfolio, fits perfectly into the "enabling device" strategy. Finally, the constant expansion of the offer of software and value-added applications for the business feeds the virtual warehouse Application Warehouse.
FIRSTONLINE – But where do you plan to make the profits?
GRIECO – Leveraging our proprietary products and innovative offering. Olivetti's 2010 performance was emblematic of the new course: against an IT market that was down by 10%, our turnover, driven by innovative products, grew by 12%.
FIRSTONLINE – The income statement, however, is still in the red.
GRIECO – Unfortunately, the coat of arms of the brands is not enough and the repositioning cannot be done in a day. Today, however, Olivetti has once again had a future, but it still suffers from the weight of a company that for years has not been able to renew itself. The relaunch strategy has been mapped out and in the next two years we will break even on the basis of an innovative offer that is continuously enriched with new products and new services. Let me tell you that for a company that was given up for dead up to three years ago, this is no small result.
