InfoTrends HPE GPAS

Analysis

March 2013

HP Launches ‘Global Product Authentication Service’

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ANALYSIS HP Launches “Global Product Authentication Service”

© InfoTrends 2013

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Table of Contents

Introduction ................................................................................................................................ 3

Key Findings ........................................................................................................................... 3

Recommendations ................................................................................................................. 3

GPAS Explained ......................................................................................................................... 4

Engagement with Consumers .................................................................................................... 7

Who Benefits from HP GPAS? ................................................................................................... 8

InfoTrends’ Opinion ................................................................................................................... 9

About the Author ........................................................................................................................ 10

List of Figures

Figure 1: Schematic of HP GPAS Authentication ..................................................................... 5

Figure 2: GPAS Dashboard Example ........................................................................................ 6

Figure 3: Photo of Consumer Scanning a QR Code .................................................................. 7

Figure 4: Photo of Inkjet Coding by HP Thermal Inkjet Head ................................................ 8


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Introduction

While Hewlett-Packard’s Printing and Imaging business is the main focus of InfoTrends’

research, another wing of Hewlett-Packard, HP Software Professional Services, has

recently launched a cloud-based software technology for product identification—one that

requires variable data printing for packaging and labels for consumer products. The new

offering, called HP Global Product Authentication Service (GPAS), enables: (1) printing of

randomized variable data codes on products; (2) the authentication of products bearing

those codes for consumers who scan or text them back to GPAS in the cloud; and (3)

insight for brand owners into where fake products are evident, and where genuine

products are being diverted to unintended markets.

Key Findings

Hewlett-Packard’s Software Professional Services group has launched a cloud-based

product authentication service to help brand owners fight counterfeiting and the

diversion of products to unintended markets.

HP GPAS produces high numbers of random codes, either quick response (QR) codes

or alphanumeric ones, for brand owners or print service providers to apply to product

packaging or labels.

Consumers scan the QR code or text alphanumeric code to GPAS in the cloud, and a

reply is sent back that product is authentic, not authentic, recalled, or any other

message the brand owner wants to transmit.

GPAS benefits brand owners and consumers by cutting fraud. Because it is agnostic

in terms of print technology, it benefits digital printing in general by increasing the

value of variable data printing on packaging and labels.

Two types of HP printing products will benefit from implementation of GPAS and

other authentication services based on variable data printing of packaging. One is

coders based on HP thermal inkjet, the other is HP Indigo color digital presses.

Recommendations

Clients should know of HP GPAS as a cloud-based tool that will help brand owners

fight product counterfeiting and diversion to unintended markets (“gray marketing”).

HP GPAS, and likely other product authentication tools, will spur variable data

printing for packaging and labels, a benefit to suppliers of digital presses and coders.

Vendors should consider HP GPAS or a similar solution to fight counterfeiting or gray

marketing of their own branded toner and inkjet ink supply products.


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GPAS Explained

In December 2012 at Hewlett-Packard’s “HP Discover” technology fair in Frankfurt,

Germany, HP Software Professional Services announced that it would market GPAS

directly and through a new partner, Brady Corporation (www.bradycorp.com), a major

supplier of product identification systems and services. GPAS is now available

worldwide from both sources. The HP GPAS offering is not completely new, since HP’s

Software Professional Services group has fielded it at least once to protect the anti-

malarial drug of a non-governmental organization (NGO) in Africa, and HP’s own

Printing and Imaging division has been using it to protect its toner and ink cartridge

products since May 2012. Nevertheless, the late 2012 news marks the global launch of

GPAS as well as the first time that HP will be marketing it through a partner.

HP GPAS works as follows:

1. The brand owner works with HP Software Professional Services or Brady to sign up

for the GPAS Cloud Service and to learn how to configure and use GPAS dashboards

to gather intelligence.

2. HP’s GPAS team uses a proprietary algorithm to create high numbers of unique,

randomized codes. The codes are then downloaded via a secure, encrypted method

from the cloud-based GPAS system by the brand owner or a designated printer, who

then outputs them into XML or CSV format and prints them on labels or packaging.

3. Once the products are purchased by consumers, each product can be authenticated by

its purchaser, who scans the QR code with a smartphone or texts an SMS version of it

from a mobile phone or a computer.

4. From the cloud, GPAS sends back rapidly any of a number of possible responses—the

product is authentic, not authentic, subject to a recall, or any other messages the

brand owner wants to communicate to the customer.

5. For the brand owner, GPAS assembles and organizes data about the authentications,

based on IP addresses (GPAS makes any e-mail information anonymous; it does not

record personal e-mail addresses).

6. Finally, the brand owner tracks the product authentications live on the GPAS

dashboard, seeing where and when authentications are occurring and the incidence

of authentication results by type.

http://www.bradycorp.com/


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As noted above, GPAS can help with a product recall, if needed. Product recall has been

the focus of a separate development effort by HP Software Professional Services, but the

basic functionality of GPAS made it natural to include a product recall option within it.

For the brand owner, GPAS thus gives the ability to recall faulty products precisely rather

than broadly, since consumers scanning or texting product codes can be notified

individually if a product is subject to recall.

Figure 1: Schematic of HP GPAS Authentication

On the packaging and label converter side, the GPAS codes are agnostic in terms of digital

output technology—any system that can variably print QR codes or even just

alphanumerics will do. Thus, the packaging or labels can be variably printed by

monochrome inkjet coders or thermal transfer label printers, or by full color digital

presses from HP Indigo and its competitors. At this point, there is no integration for

GPAS with HP’s variable data printing (VDP) tool, SmartStream Designer, but the HP

GPAS team can arrange it, if required. In any case, the codes are produced in a text file

and can be formatted into any structure to suit the need.

On the brand owner’s side, the information that GPAS generates is rich and strategic.

The GPAS dashboard maps authentication results (valid and invalid) by region,

country, or state, as needed. To respond to a high incidence of invalid codes, the brand

owner can investigate supply chains and retailers for other counterfeit products.

1. HP GPAS generates high numbers

of unique, randomized codes, both

QR and alphanumeric.

2. Brand owner or designated

printer downloads codes from

GPAS in secure, encrypted manner,

then prints on labels or packaging.

Finished products enter supply chain.

3. Consumer sends scan or text of

code to GPAS in the cloud.

4. Consumer receives reply about

authenticity, or recall, or other

messages.


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At the same time, legitimate products that are authenticated in markets far from

those the brand owner has targeted indicate a problem with gray marketing (i.e.,

someone in the supply chain has diverted the brand owner’s products to unintended

markets). Again, working from a map by GPAS, the brand owner can investigate the

supply chain for the location of the diversion.

Figure 2: GPAS Dashboard Example

The choice of QR codes or SMS text is related to the goal of making GPAS support

authentication globally. In North America, Western Europe, and Japan, smartphones

and the networks to support them are widespread—making QR codes easy to scan. In

less developed regions, though, the absence of a 3G or 4G network means that SMS is

the only mobile telephone-based communication infrastructure available to most

consumers. In that case, a consumer texts the code from the product to a national

telecommunications company in short code. The short code routes SMS traffic to


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GPAS, and the GPAS service responds with a SMS text back to the consumer to verify

or deny the authenticity of the product or another message.

The interface between GPAS and the consumer is maintained by the brand owner and,

therefore, the brand owner maintains content in any appropriate languages.

Engagement with Consumers

HP has cited a wide range of product categories as likely markets for GPAS programs,

from drugs to foods and beverages to high-end clothing. In a recent interview with

InfoTrends, managers from HP’s GPAS team explained that the nature of the GPAS

implementation can vary greatly according to product category and possibly other

configurations. For a drug in Africa, the consumer may be highly motivated to

authenticate a product because his or her health depends on it; if needed, though, the

brand owner could give the consumer an incentive, such as a discount coupon in return

for entering a text code into the brand owner’s website. For a costly handbag sold in

London, there is also high motivation to verify that the product is genuine; for other

products, an incentive may be needed, such as a donation to a charity.

Figure 3: Photo of Consumer Scanning a QR Code

In between these examples are a host of others, from inkjet ink cartridges to wine and

spirits, where GPAS and its brand owner customers can collaborate on the best

approach. A final note on possible approaches is that the engagement with the

consumer that GPAS fosters is also an opportunity for the brand owner to sell more

products. The GPAS offering from HP can, therefore, address three key brand owner

concerns: supply chain security, product recall, and marketing.


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Who Benefits from HP GPAS?

Assuming it works well, GPAS will benefit many people and companies. Consumers will

benefit because GPAS fights fraudulent goods. Counterfeiting has created a huge problem

of fake drugs and other products being marketed as real. Most importantly, fake drugs

endanger the consumer’s health, but they also have a high financial cost that has

commonly been estimated in the tens of billions of dollars annually. At the same time,

counterfeiting is common for other classes of products, with toner cartridges, perfumes,

and high-end clothing as well-known examples.

Companies that will benefit include brand owners, supply chain companies, and printer

companies of various types. Brand owners gain the intelligence they need to fight

counterfeiting and gray marketing. In the supply chain, the distributors and retailers can

also use GPAS to check products’ authenticity and cut their own risk of being defrauded.

Among printer manufacturers, the makers of inkjet coders based on continuous,

piezoelectric, and thermal inkjet will benefit, as will makers of barcode label printers

based on thermal and laser technologies.

Hewlett-Packard itself has roles in monochrome and color printing that are relevant. In

monochrome printing, HP is the supplier of thermal inkjet heads to major coding

equipment manufacturers, such as Videojet and Domino, and to several much smaller

makers of coders based on thermal inkjet, such as NuTech Systems (U.S.) and Anser

(Taiwan). In the overall product coding market, HP’s thermal inkjet heads have a tiny role

compared to the dominant continuous inkjet (CIJ) technology. Unlike CIJ coders, however,

coders based on thermal heads print at high resolution and can easily print the QR codes

that will be a core component of GPAS in Europe, North America, and much of Asia.

Figure 4: Photo of Inkjet Coding by HP Thermal Inkjet Head


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Meanwhile, one important color printer category will also benefit, and that is color digital

presses for label and packaging applications. HP Indigo is the dominant supplier of such

presses, but it has two smaller electrophotographic competitors—Xeikon and Xerox—as

well as multiple OEMs supplying color inkjet presses (e.g., Durst, EFI Jetrion, Epson, and

Heidelberg CSAT). On average, no more than 1% of the output of these various color

digital presses today is true variable data printing; only a small minority of installations,

print variable data regularly, in particular for the pharmaceutical industry. Brand owners

using GPAS, though, will spur a need for variable data printing even in these color digital

presses for labels and packaging, enhancing the value of such systems.

InfoTrends’ Opinion

HP GPAS is a compelling service concept, one that addresses two huge, costly problems—

counterfeiting and gray marketing—and does so using technologies that are current and

forward looking: namely mobile technology and cloud computing. HP is not alone in

“crowd sourcing” security for drugs or other products. The closest equivalent product that

we could find was the Mobile Product Authentication solution of company called Sproxil

(www.sproxil.com), an IBM partner. At the same time, other printer vendors have a focus

on security, but their developments so far appear to be limited to security features and

programs for their own products. In that regard, HP GPAS managers say they have had

inquiries from other printer OEMs about implementing GPAS for themselves. Given the

value these other companies’ supplies brands, HP GPAS or some similar service will be

worth considering as a potential help.

This material is prepared specifically for clients of InfoTrends, Inc. The opinions expressed represent our interpretation and analysis of information generally available to the public or released by responsible individuals in the subject companies. We believe that the sources of information on which our material is based are reliable and we have applied our best professional judgment to the data obtained

http://www.sproxil.com/


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About the Author

Bob Leahey

Associate Director

[email protected]

+1 781-616-2125

Robert Leahey has many years of experience in consulting to the peripherals and supplies

industries. At InfoTrends, his main work has been to conduct custom research projects,

most often on inkjet, thermal, and color laser technologies used for commercial and

industrial applications. He is also the manager of InfoTrends’ continuous information

service covering Color Digital Label and Packaging (CDLP) technologies.

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