As all know, clearly a big day for HP. Four key announcements were made, one of which has been overlooked due to the others.
- Killing the Handheld device and tablets – At least they had the corporate will to do this early and cleanly. The new leadership is not waiting for things to happen, for better or worse they are trying to make things work out. Others are persevering but thinking that they will be the “lucky ones” who out ride the i-pad. Chances are they won’t be.
- Divesting the PC business – This is clearly in alignment to becoming an enterprise solutions focused provider. It can work. No-one at IBM is upset that they no longer sell PC’s. I suspect that if they can execute (a big IF), then HP will feel the same way. The focus is all enterprise with Printers generating some cash. Clearly printers may be the next on the block, though HP’s dominance in this market is less threatened than PC’s
- Acquiring Autonomy – A very strong and applauded move. Makes a good platform for analytics and linkage to Vertica. I expect more investments in information platform capabilities.
- A fair quarter – HP had a better quarter than Dell or Lenovo, it just got lost in the broader strategic developments.
Overall it is a positive move for HP. They will take some heat for the ditching of the hand-helds and the loss of a $1.2B investment in Palm, but the focused enterprise strategy is what most market sages have been asking for for some time. To be a real force in enterprise services, HP needs to invest in industry capability and depth, there is not a lot of candidates available, but something needs to happen and quickly. Now the PC business is going, perhaps Accenture, or Capgemini, is an old school acquisition, or an Indian player.
Potential losers include
- Dell and Lenovo – Undermine market confidence in their business, and potentially a new focused competitor (depending on where HP PC’s end up)
- IBM – If, and it is a massive if, HP can get an enterprise play working, IBM cannot call HP a PC company anymore and will have real competition in aspects of Information Management
- Cisco and EMC – HP can avoid the consumer space (like Cisco now), and focus in on enterprise infrastructure
- Microsoft – HP was the strongest partner for Microsoft in the PC space, their exit will add further pressure on the viability of the traditional PC and the availability of R&D and investment in the space.
Clearly, there is a lot of unknowns at the moment, but overall it has been an aggressive HP move that should invigorate those employees in the enterprise business that HP is now really focusing on them.