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Ex-Board Member Says HP Is Committing 'Corporate Suicide'

timothy posted more than 2 years ago | from the suicide-by-1000-cuts dept.

HP 394

theodp writes "If Apple's looking for a seamless transition, advises the NYT's James B. Stewart, it definitely shouldn't look to Hewlett Packard. In the year after HP CEO Mark Hurd was told to hit-the-road-Jack, HP — led by new CEO Leo Apotheker — has embarked on a stunning shift in strategy that has left many baffled and resulted in HP's fall from Wall Street grace (its stock declined 49%). The apparent new focus on going head-to-head with SAP (Apotheker's former employer) and Oracle (Hurd's new employer) in enterprise software while ignoring the company's traditional strengths, said a software exec, is 'as if Alan Mulally left Boeing to join Ford as CEO, and announced six months later that Ford would be making airplanes.' Former HP Director Tom Perkins said, 'I didn't know there was such a thing as corporate suicide, but now we know that there is.'"

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394 comments

Deja vu (2, Insightful)

Anonymous Coward | more than 2 years ago | (#37240134)

Nokia, anyone?

Re:Deja vu (2, Informative)

Opportunist (166417) | more than 2 years ago | (#37240180)

Yeah, they should have stayed with making rubber boots. Heck, they should have stayed with making Paper.

Re:Deja vu (3, Insightful)

alen (225700) | more than 2 years ago | (#37240258)

they were screwed long before the current CEO took over. making feature phones and geek phones when apple and android are taking over is not a recipe for success

Re:Deja vu (4, Interesting)

jhoegl (638955) | more than 2 years ago | (#37240332)

Kind of,

HP has had so many leaders within the past 10 years that they have no idea what assets they have.
Hell, HP bought a company that was a start up for the cloud idea back in... 2006 I think. They did nothing with it.
Now they are scrambling to fix it up, and the offering wont be that great if current middle management has its way.
HP lacks direction because quite simply HP hasnt had anyone worth a damn at the helm, leading to assets that they bought in the past to stagnate.

HPs problem is literally itself.

Their management style needs to change, middle management needs to be cleaned out and those that are smarter need to rise up.
Until then, this company will bleed money, sell off divisions, and end up as small as it was back in 1995.
If HP sells its printer lines, then you know they are in trouble.

Re:Deja vu (4, Interesting)

sortius_nod (1080919) | more than 2 years ago | (#37240384)

The problems started when Fiorina, maybe even before that with the Compaq merger. They really haven't been able to do anything other than sell large volume servers since. No major projects really have come to fruition. Everything seems to turn into a clusterfuck for HP every time they swap CEOs.

I remember a number of years ago a documentary on Silicon Valley where an ex-HP engineer said "HP's slogan is 'Invent', we stopped doing that years ago". I think that statement pretty much sums up HP.

Re:Deja vu (0)

Anonymous Coward | more than 2 years ago | (#37240580)

Your comments are right on, Fiorina sure didn't help HP. Whats even worse, she thought she'd be a good politician. I'm afraid the ration of CEO pay vs the rest of the employee pay has gotten to distorted so now every really greedy person wants to be CEO and they are more driven than someone who could actually run the company. Its really sad, I had heard that they were once a great company to work for.

Gave up too quickly (4, Insightful)

yog (19073) | more than 2 years ago | (#37240146)

Shouldn't HP have at least tried to make a go of their WebOs tablet before giving up so quickly? They can't possibly have recouped the investment costs of purchasing Palm, etc.

It's not as though personal computers are going away any time soon. Corporations still need desktop workstations, albeit more in the direction of thin Internet portal devices than the heavily loaded computers of the past.

HP should come out with a world class ultra lightweight laptop to compete with the MacBook Air, with a touch screen and very long battery life. They should come out with an innovative line of consumer and business PCs with touch screen monitors, tiny form factor similar to Mac Mini, remotely flashable, all the bells and whistles. And they should built on their handheld base, come out with some state of the art handsets and tablets to round out their portfolio.

Software services is all very well, but there are plenty of competitors in that space and HP will not be having a picnic. Why did they buy compaq and Palm to begin with? Methinks the current board has taken leave of their senses.

Re:Gave up too quickly (-1)

Anonymous Coward | more than 2 years ago | (#37240170)

Look deeper. They probably got a very large bribe from MS to go in that direction instead.

Re:Gave up too quickly (4, Insightful)

Merk42 (1906718) | more than 2 years ago | (#37240558)

Yes any time a competitor to Microsoft fails, it MUST be because they were bribed, not because of poor sales and/or business decisions. I guess when Microsoft Kin failed it must have been because they bribed themselves.

Also, HP isn't just getting out of WebOS, it's getting out of selling PCs. It is the #1 seller of Windows based PCs. So why the hell would Microsoft bribe them to stop doing that?

Re:Gave up too quickly (4, Interesting)

NoNonAlphaCharsHere (2201864) | more than 2 years ago | (#37240234)

HP looks at the way IBM dumped the (cutthroat margin) PC and laptop market and survives on consulting and big iron and fantasizes that they can do the same. The days when HP could produce ANY world-class widget ended when they stopped being an instrument company at heart, probably in Lou Platt's day, but certainly by the end of the Evil Queen's reign. By then, they'd lost (or gotten rid of) all their top engineering talent, and were no longer one of "the top 10 places to work in the world". The Compaq, later (attempted) PWC and finally (completed) EDS and Palm deals are just the fenceposts along the way of HP losing its soul.

Re:Gave up too quickly (4, Insightful)

sortius_nod (1080919) | more than 2 years ago | (#37240414)

I really don't think you can compare HP's aimlessness and IBMs ruthlessness. IBM actually probably did the smartest thing they could "fuck it, if you want the consumer end of the market China, you can have it".

Meanwhile HP dumps what could have actually lifted them out of the doldrums and focuses on an already overcrowded market. Not exactly the smartest thing to do.

Going up against SAP & Oracle is not as easy as it seems. Oracle isn't just Oracle, people forget this. Oracle is the base of a huge chunk of database systems (think... well... SAP & Maximo [IBM]).

Re:Gave up too quickly (0)

Anonymous Coward | more than 2 years ago | (#37240282)

The question is not whether they could have recouped the investment costs. It is, rather, whether they stood to lose more money by continuing down that path, or by cutting their losses and running.

You have to invest money to make money. In the context of WebOS, HP would have had to build up the installed base (probably by selling large numbers of tablets at, or near, cost); entice developers to come on board (possibly by giving away free tablets to developers that released high quality apps for WebOS); and generally make the platform appealing to the general market. Having a good OS, no matter how well polished, reliable, and cohesive it may be, is not enough. Apple is the big game in town. So you have to have a base of applications that, if not as big as Apple's, at least is big enough to give consumers confidence that it'll have what they want.

Could they have made money by going down this path? Possibly. Possibly not. It certainly would have taken time, and likely a lot of money invested over that time; and there's no guarantee that they would have won enough marketshare to make it worthwhile.

By cutting their losses and running, they're saying, "We don't think that we can do well enough here to justify the expense." By saying that, they're guaranteeing that it's true; no matter what might have been - and again, success was not guaranteed, by any stretch - it can't be now. What's important, at least for HP and their stockholders, now is to focus on the remaining businesses and build them up.

As for the PC market, it's now a market with razor thin margins. You need something serious to compete in that space and make decent money, and I can't see any other company treading that ground; Apple dominates there, as well.

For HP, it pretty much was going to be either enterprise, or tablets; the two are so far apart, I find it very difficult to believe that a single company could do both well.

Re:Gave up too quickly (1)

gl4ss (559668) | more than 2 years ago | (#37240290)

you know what's palms biggest success? selling linux os TWICE(developing a linux os thrice) for large amounts of money to someone who makes no use of it. apotheker is seeing the ROI on his sw side and can't think that he should keep doing anything physical, when you can just rent out nerds at ridiculous pricing. the factories are owned by subcontractors already, though? so what they're doing is throwing away a strong consumer brand and consumer support organization. of course he isn't throwing away the sweet pie of ink refills though..

Re:Gave up too quickly (4, Interesting)

Ecuador (740021) | more than 2 years ago | (#37240306)

I was looking at ebay over the weekend and the Touchpad 16GB auctions were all closing at around $250-$270 - and we are talking about 1 auction closing per minute!
So, this means that they could have sold the Touchpad at around $300 (more for the 32GB version) and still sell-out in a few days. This would have been at a loss of R&D, as the cost of making them is astimated at around $315 & $330 for the 16GB and 32GB versions.
Now, after selling out in a few days they would have a big installed WebOS base, so maybe the app store would take off.
But nooo, they HAVE to sell their tablet at least $400, even though they are trying to enter late in a market dominated by Apple. And when they obviously can't do that, they simply give the tablets away and call it quits!
Now THAT is corporate suicide and yet it stands second to Nokia's recent "FU developers - we take back our promises, BTW we are just another windows phone maker now".

Re:Gave up too quickly (1)

Hadlock (143607) | more than 2 years ago | (#37240444)

As far as risk management goes, I think they already wrote off the WebOS as a loss, and sitting on that inventory for more than two months would have been a much worse story for HP and their "lack of vision and leadership" as bloggers frothed at the mouth, writing even more scathing articles about "hp's tablet was so bad it didn't even sell at cost. half their inventory is still unsold". Once the decision to can WebOS was made, unloading the tablets and announcing closing down the department was the smart move from a fiscal and PR viewpoints.
 
Canning WebOS perhaps wasn't the best plan, but by cutting their losses now, they still have an albatross around their neck, but at least they don't have the limp corpse of WebOS tied around their ankle creating turbulence in the media for months and months as they try and move forward.

Re:Gave up too quickly (3, Interesting)

mickwd (196449) | more than 2 years ago | (#37240480)

I'd love to know whether there's something about the tech industry that makes it susceptible to this level of mismanagement, as so many tech companies seem to have been badly mismanaged over the years.

Bill Gates, Steve Jobs and Andy Grove at Intel (and perhaps Lou Gerstner turning around IBM) stand out amongst the rest as inspired CEOs, even if some of their business practises have left a little to be desired at times. But so many other once-dominant-in-their-field companies have just seemed to crash and burn.

Maybe I'm wrong and all other industries suffer from the same level of management problems - it's just that the technology industry is the one I'm most familiar with.

Re:Gave up too quickly (5, Interesting)

Anonymous Coward | more than 2 years ago | (#37240628)

The people you mention were engineers and technologists, not bean counters. I guess that's the difference.

CEO background (4, Insightful)

Kupfernigk (1190345) | more than 2 years ago | (#37240532)

What do you expect? How on Earth did HP come to appoint a CEO from a software-only company that has probably never seen an end user customer in his life? It isn't as if Ford appointed a CEO from Boeing; it is as if they appointed a CEO from a fleet leasing company. The result; a decision announced in haste that was bound to deprecate HP as a brand. Apotheker seems to have forgotten - or did not know - that today's phone buyer may be tomorrow's CIO.

Yes, the could have sold the tablets at a small loss. And, since the Pre 2 phone sells happily in its unlocked state at around $200 in the UK, they could have sold off the Pre 3 for maybe a little more. Legally in the EU they must support the things, so they might as well do it properly. But no...

I happen to like phones with portrait format and keyboards. Some people do. I'm now having to look at the BB Torch 9810 for a next phone. It doesn't look to be as good or as convenient as the Pre 3. OK the screen is smaller that an iPhone's, the processor is slower than on a Samsung. But the actual operation as a phone/messaging device is that much nicer than either. Some people prefer, say, the Prius to an Audi or a BMW. HP just never bothered to find its market and then market to it. Yet if there was a company that could have taken on RIM, it was HP.

Re:Gave up too quickly (-1)

Anonymous Coward | more than 2 years ago | (#37240446)

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Re:Gave up too quickly (0)

Anonymous Coward | more than 2 years ago | (#37240470)

But will it make my megabits run faster? Will my PC come through with flying colors?

Re:Gave up too quickly (0)

Anonymous Coward | more than 2 years ago | (#37240550)

will it clean my pc?

Re:Gave up too quickly (2)

Grizzley9 (1407005) | more than 2 years ago | (#37240456)

HP should come out with a world class ultra lightweight laptop to compete with the MacBook Air, with a touch screen and very long battery life. They should come out with an innovative line of consumer and business PCs with touch screen monitors, tiny form factor similar to Mac Mini, remotely flashable, all the bells and whistles.

So instead of innovating, they should copy Apple. Got it. Seems other companies are in trouble for doing just that and getting trounced. They're not going to make any impact by continuing to play catch up with 2nd rate devices and services. Each of these big companies have a large budget for R&D, adding on obvious things is not the best use of those resources.

Re:Gave up too quickly (0)

Anonymous Coward | more than 2 years ago | (#37240466)

John Gruber (of Apple site Daring Fireball) notes that this happened after Mark Hurd got fired and Leo Apotheker got hired to replace him.

Leo Apotheker previously worked for SAP, an enterprise planning software company.

What do you know, a year after Apotheker takes over, HP announces plans to become an enterprise planning software company.

Re:Gave up too quickly (2)

vlm (69642) | more than 2 years ago | (#37240526)

HP should ...

They should ...

And they should ...

They can't. All the "do-ers" "makers" whatever you want to call them, were downsized years (decades?) ago to boost stock proce. Nothing left. The death of the company is the endgame of that strategy.

They'd have to start over, and try to hire back all the people they fired, at a higher pay rate because once burned twice shy, etc. Frankly your average startup would be a better place to work, so they're going to have severe issues just getting to personnel to even try what you suggest.

Its much more like a "corporate zombie apocalypse", not a "corporate suicide", although both have the same end result and some similar symptoms. What happens to a corporation when most, but not quite all, of the brains are scooped out for short term gain? Look at HP.

Methinks the current board has taken leave of their senses.

The were driven into the dirt a long time ago. The options are rapidly narrowing as the end approaches. In that situation, where failure is almost certain, random thrashing around probably won't help, but then again it appears to be "doing something" and "being proactive" both of which are important for individual resumes for their next job, and who knows, maybe a 1 in a million shot will pay off after all. HP may yet survive, despite its own best efforts. Probably not, but stranger things have happened.

Personally I'd like the test equipment spinoff to buy the trademarked name back. Id like to see a new line of "HP" spectrum analyzers or "HP" scopes. HP had a beyond spectacular reputation for test equipment years ago, I don't know if their recent PC and printer operations and legendary mis-management style have tarnished it beyond value, but it used to be a great name. The test equipment spinoff, eh, who even remembers their name.

Re:Gave up too quickly (1)

AJH16 (940784) | more than 2 years ago | (#37240556)

HP already has a very nice offering in the virtual PC terminal arena which is probably going to be the future direction for a lot of corporate IT.

They're looking to the future. (0)

Anonymous Coward | more than 2 years ago | (#37240158)

Declining stock prices are often a good sign these days. It means that they're not looking to next quarter, but rather years or even decades ahead. This doesn't sit well with Wall Streeters who want to make profit as quickly as possible, but again, that's not a bad thing. The short-sighted approach of many Wall Streeters has really fucked over the American economy.

The hardware market doesn't have a bright future. Even low-end servers today are powerful enough to run tens or hundreds of virtualized servers, each of them running under heavy load. Hardware is only going to get more powerful, and the demand for it will drop off. The whole "cloud computing" fad hasn't helped the demand for hardware, either.

Specialized software is where it's at. That's where true value can be provided. The margins are better, and it's where future-looking companies should be focusing.

Re:They're looking to the future. (1)

Anonymous Coward | more than 2 years ago | (#37240218)

Is that you Mr Apotheker?

Re:They're looking to the future. (1)

gtvr (1702650) | more than 2 years ago | (#37240228)

You're half right. Long term thinking is good and should be rewarded. A company losing 1/2 its value doesn't mean that they are guaranteed any long term success though. Still plenty of servers to be sold.

Re:They're looking to the future. (1)

erroneus (253617) | more than 2 years ago | (#37240380)

I agree that a company losing half its value in the market doesn't mean anything other than what it means at face value. But it would be optimistic and refreshing if HP really were looking to the more distant future and aiming in direction beyond the next quarter.

Re:They're looking to the future. (1)

alen (225700) | more than 2 years ago | (#37240278)

too bad HP has generally crappy software and you can't sell enterprise software like servers. people don't just dump their old product because HP is here now.

Re:They're looking to the future. (4, Insightful)

somersault (912633) | more than 2 years ago | (#37240322)

The whole "cloud computing" fad hasn't helped the demand for hardware, either.

It's amazing how all of these new cloud hosting services are magicking their hardware out of the clouds..

Re:They're looking to the future. (1)

fuzzyfuzzyfungus (1223518) | more than 2 years ago | (#37240448)

The cloud guys certainly do need hardware, and by the truckload; but I suspect that they make comparatively lousy customers:

Your smaller shops tend to have limited bargaining power, and often no choice but to over-provision with respect to their needs(Can't have just one web/file/exchange server because it might fail; but don't have enough load to keep that one over 50% utilization, much less give the backup any exercise unless the primary should happen to go down...)

The(successful) cloud outfits, by contrast, tend to have in-house expertise in management and provisioning tools(so your 'value-add' management crapware isn't a selling point) and fairly tight control over utilization(or they'll be out of business) and some sort of software-level failover scheme in place. So they certainly do need servers, by the rack; but they are unlikely to have any interest in paying more than commodity prices, and are also unlikely to take any upsells to more expensive fault tolerant gear.

They are sort of the server equivalent of supplying house-brand desktops to WalMart: The volume is there; but you won't like the margins, and there are plenty of people who could replace you...

IBM did the same (2)

foniksonik (573572) | more than 2 years ago | (#37240162)

I'm not saying this was a great idea or that the execution was ideal but there is precedent. IBM long known as a hardware company shifted to software and services in a fairly short period of time and seems to be doing quite well at it. If this new CEO has a vision and a strategy behind it HP could end up better off.

I was personally looking forward to more WebOS devices though.

WebOS - Try Samsung (4, Interesting)

QuasiSteve (2042606) | more than 2 years ago | (#37240246)

I was personally looking forward to more WebOS devices though.

Well, reportedly, Samsung is still interested in WebOS. Where before they were interested in licensing it off of HP ( http://www.engadget.com/2011/06/29/hp-confirms-its-in-talks-about-licensing-webos-samsung-tipped/ [engadget.com] ), they may now just grab it outright.. even if only as a precautionary move to the recent Google-buys-Motorola move ( http://www.slashgear.com/samsung-webos-rumors-reignite-amid-ex-hp-pc-vp-grab-29174760/ [slashgear.com] ).

Personally I'm not sure why they'd be doing that. They're going strong with Android - which, while heavily Google-influenced, is under governance of the OHA - while on their lower-end systems they've got their own OS already - Bada.

Though if there's any chance of WebOS going forward, Samsung would be a good place to start. Them or Huawei, perhaps. Not seeing HTC being interested.

Re:IBM did the same (4, Insightful)

fuzzyfuzzyfungus (1223518) | more than 2 years ago | (#37240324)

I am fond of webOS(application base is tiny; but the interface is actually quite well thought out. The "cards" work quite well. Hell, maybe team Google will pick up their smoldering remains at the firesale and polish up the 'chromebooks' with some of the UI touches...)

As for the IBM analogy, though, HP has a hard road ahead of it. IBM has always made hardware; but they've always had a software/support/consulting arm extracting its pound of flesh along with the hardware, from back when their job was to customize the Hollerith card reader for your application up the the present 'enterprise database middleware yadda yadda' stuff. They did ditch their desktop/laptop business, and they will, if asked, sell you some bare servers, dell style, for just cost+warranty; but they have always been a combined hardware/services entity. HP, by contrast, is more of a pure hardware/engineering shop that has been bleeding actual engineering talent for a while now.

Re:IBM did the same (1)

Kjella (173770) | more than 2 years ago | (#37240542)

Yes, in fact it was one of their great failings in the PC market, they were too heavy on selling support contracts, implementation services and the corporate desktop, completely ignoring what happened with the consumer market. That and over-engineered and over-tested solutions built to last 20 years from top-rated components with huge stockpiles of spare parts. They were still in the Big Iron mindset, where people want an exact replacement for whatever setup they've tested and certified. So the support contracts were ripoffs and if you didn't have a contract the spare part prices were ripoffs to make you sign up. And rather than trying to be that lean and mean deliverer of barebone hardware they tried putting the cat back in the bag with MCA, the rest of the industry went with EISA and IBM disappeared out of any real PC significance. But if we're talking failures they screwed themselves far more on software than on hardware...

Re:IBM did the same (1)

vlm (69642) | more than 2 years ago | (#37240592)

HP, by contrast, is more of a pure hardware/engineering shop that has been bleeding actual engineering talent for a while now.

Can't bleed forever, there's practically no one left. General /. public has this idea that HP is still an engineering corp that makes scopes... not so. They can not get out of their predicament by "engineering" solutions because they downsized or spun off all those guys. They have done "eh" at consumer electronics. They can continue their "eh" performance at importing Chinese hardware and marketing it as HP, or they can try something new. The new options do not involve innovation or engineering or consulting, those guys are mostly downsized. Maybe they could take up patent trolling? They could try some more trendy "me tooooo" but they can't even sell a tablet, so I think not.

So what does a company with money, no R+D department, and proven inability to produce commodities, do? Honestly, I donno. Go out of business once the money runs out, dotcom style, I guess.

Re:IBM did the same (0)

Anonymous Coward | more than 2 years ago | (#37240360)

> IBM long known as a hardware company shifted to software and services in a fairly short period of time and seems to be doing quite well at it.

Shifting means scrapping the end-user business. You still can buy workstations, servers, and big-iron machines. They even still develop their own processor.

It doesn't quite relate to what HP seems to plan, especially if you consider, where both come from.

Re:IBM did the same (1)

Attila Dimedici (1036002) | more than 2 years ago | (#37240386)

The difference is that when IBM was a hardware company people bought their hardware for the software and services that came with it. In its heyday as a hardware vendor, the type of software and services that it sold were thought of as part of the hardware. It made the switch from a primarily hardware company to a software and services company when it realized that all of its hardware competitors had gone out of business and all of the companies that it was competing with for business were software and service companies. HP does not, as far as I am aware, have a reputation for business software and services. I am aware that they own EDS, however, EDS has lost quite a bit of its luster under HP stewardship.

Re:IBM did the same (1)

jmauro (32523) | more than 2 years ago | (#37240566)

EDS was fading before HP bought them. They basically got into a multibillion dollar fixed-price contract with the government (NMCI) that they completely underestimated the costs for and wound up losing a fortune. HP acquired them in the death spiral when they were ridiculously cheap.

If anything HP slowed EDS's decline rather than causing them to lose their luster.

Re:IBM did the same (3, Insightful)

Hatta (162192) | more than 2 years ago | (#37240474)

IBM always had good software to support their hardware. HP ships 344mb [hp.com] printer drivers.

The difference... (1)

Junta (36770) | more than 2 years ago | (#37240496)

When IBM shed it's PC division, it was already a somewhat modest chunk of their revenue (less than 10% of their revenue), lost money three years in a row, and represented less than 5% of the PC market. There was some non-trivial impact to IBM's x86 server business, but generally speaking the PC division didn't give IBM good financials and the x86 server business learned to continue without PC division there.

Now let's look at HP. Their PSG represents a good third of their revenue. That division operates with a positive margin (though some feel 5% is insufficient, I think it's healthy enough, particularly compared with negative numbers at the time of the IBM sell). It also represents a very very strong share in the desktop/laptop space (even if people say that market is dead, I don't think it would be 'horse and buggy' dead, it's going to plateau and sit there at worst). Considering how much mindshare they have and how that influences server sales, and how much volume of equipment they push through PSG and what that means to procurement, this poses the significant risk of shooting their server hardware business in the head. The Apotheker leadership says the focus should be on software and services, and while the EDS acquisition has secured services as a strong chunk of services income, their software picture today comprises less than 3% of their total revenue (20% margin may sound nice, but when it's on one tenth the revenue that PSG pulls in, the raw numbers are pretty dismal). So immediately they ditch a third of their revenue, and de-emphasize another 2 thirds of their revenue (servers and printing), and declare an intent to bet the farm on the last third of their revenue.

There was a time when IBM looked more like HP, where hardware was king. When they first chased services and software, they did not ditch their hardware business to do so. They hedged their bets, continuing to take in revenue the way they knew how while growing their business in the ways that looked promising. Only *after* establishing a healthy software and services stream and reputation did they ditch PC division. HP on the other hand is already betting on success that hasn't been proven yet. There is a mindset that 'so long as you make software, you'll get more revenue', but as the person in the article says, not every company can be a successful software company and to assume so is irresponsible.

Re:IBM did the same (1)

whiteboy86 (1930018) | more than 2 years ago | (#37240506)

IBM is retaining some inertia because of old reputation, but that is fading, numbers seam to be stagnant at best, reality is that they are just another IT industry service man, no "big blue" anymore. It is like if Jobs sold Apple hardware division to China, focused on "software solutions" and then contemplated about being a smart exec to cut the low profit margin hardware level stuff.

Re:IBM did the same (1)

mwvdlee (775178) | more than 2 years ago | (#37240608)

IBM is still a hardware company for a large part. They just don't sell consumer-grade devices any more.
Basically IBM sells servers with full vertical integration.

-1 (0)

Anonymous Coward | more than 2 years ago | (#37240172)

'as if Alan Mulally left Boeing to join Ford as CEO, and announced six months later that Ford would be making airplanes

That's exactly what it's like, and it's the smartest thing Ford could possible be doing at the moment. You follow the money.

Re:-1 (1)

Junta (36770) | more than 2 years ago | (#37240574)

Well, assuming there *was* money to be made in airplane sales by a new brand *and* Ford was remotely tooled to produce airplanes, sure, Ford could try to make airplanes with maybe only a hint of investor punishment for spending money on a dubious endeavor. If Ford announced today they were discontinuing car production *right now* because they *think* that one day *in the future* they will be selling airplanes and achieving healthier financials that way instead, that would be batshit crazy, and what HP is talking about doing.

as long as (0)

Anonymous Coward | more than 2 years ago | (#37240174)

As long as they crash and burn I could care less, but if they get a bail out I'm leaving the states. The best part is the C's will walk away with several Mil and all the peasants will lose there shirt.

Wow (0)

Anonymous Coward | more than 2 years ago | (#37240176)

And I thought Carly was bad.

Ford Trimotor (2)

Jafafa Hots (580169) | more than 2 years ago | (#37240182)

n/t

(No this is not a fricken defense of HP, I could give a shit if HP shoots itself in the head.)

Re:Ford Trimotor (2)

asylumx (881307) | more than 2 years ago | (#37240374)

Yup, Ford has made planes before... it wouldn't be THAT surprising if they wanted to break back in to that business. Not to mention, engine manufacturers often make aircraft engines, too...

Re:Ford Trimotor (1)

chill (34294) | more than 2 years ago | (#37240546)

Exactly. Think Rolls Royce and Volvo. Both are big manufacturers of aircraft engines.

Re:Ford Trimotor (0)

Anonymous Coward | more than 2 years ago | (#37240564)

Yeah, that statement is a bit odd. Ford even built boeing aircraft during ww2.

Disgruntled Former Employee? (2)

NoobixCube (1133473) | more than 2 years ago | (#37240184)

Oh yeah? Well my NEXT company is like TOTALLY gonna crush you guys! You'll be living in cardboard boxes by the time I'm through with you! (Commence mad zealous scheme to try and use another company to crush SAP)

Re:Disgruntled Former Employee? (3, Insightful)

somersault (912633) | more than 2 years ago | (#37240348)

How do you know that it wasn't the board that wanted to move in this direction, and so head-hunted the guy from SAP specifically because he had good experience in the software sector?

LOL.. they don't get it... (0)

Anonymous Coward | more than 2 years ago | (#37240200)

Leo Apotheker and Stephen Elop (Nokia) are typical; transition CEO's. They are injected into a company to reshape it by lay-off people or products that do not fit into the merger with the company they worked before or after.

Not everyone does it the Oracle way. They bought Sun and ripped it apart afterwards.

Most companies send a transition CEO to rip a company apart and pay only for what they want.

Sounds unbelievable? Yes, it does :)

Re:LOL.. they don't get it... (1)

Jafafa Hots (580169) | more than 2 years ago | (#37240214)

In my limited experience, CEOs like this are brought in to wax the car before it goes in the sales lot.

HP is looking for a defining product (2)

Opportunist (166417) | more than 2 years ago | (#37240216)

HP used to mean printers in the minds of many people. That time faded. Today, they're at best one of the many printer manufacturers, no longer the ones defining standards and leading the way. Servers/Computers? They sure dropped that ball too. Dell is where people go for ready-made computers today.

So what's left for HP? HP is a company looking for a market, I'd guess. Every time I see something like this, I can't help but wonder whether their costs are just too high to compete with another player in the field and are now looking for a market that they can either corner or where the competition charges even more outrageous prices. And looking at how they try to muscle into the markets of SAP and Oracle, I'd say it's the latter.

Re:HP is looking for a defining product (5, Insightful)

OzPeter (195038) | more than 2 years ago | (#37240272)

HP used to mean printers in the minds of many people. That time faded.

In my mind HP will always be remembered as being the one of the best test equipment manufacturers, followed closely by calculators. A company that was by engineers, for engineers.

Re:HP is looking for a defining product (2)

bhodikhan (894485) | more than 2 years ago | (#37240442)

The best part of HP is their instrumentation business. This was spun off as Agilent. They still stand out in the market and are very competitive. Too bad HP forgot to keep innovating.

Re:HP is looking for a defining product (0)

Anonymous Coward | more than 2 years ago | (#37240276)

HP used to mean printers in the minds of many people.

You young white-snapper, HP used to mean Reverse Polish Notation calculators.

memristors was to be that product (2)

bzipitidoo (647217) | more than 2 years ago | (#37240292)

Or so I thought when I heard HP was mass producing memristors. Memory that was far denser, faster, and longer lived than current flash memory technologies. It was so good, memristor based memory products would also replace DRAM and SRAM, and we'd finally have computers that would not forget everything when the power was cut. Was that just so much talk and vaporware?

Re:HP is looking for a defining product (1)

RogerWilco (99615) | more than 2 years ago | (#37240342)

I think HP as a company has been focussing too much on cost reduction and too little on innovation.

And now they have lost their touch and it will be very hard to regain footing.

Re:HP is looking for a defining product (0)

Anonymous Coward | more than 2 years ago | (#37240400)

Wrong, HP used to mean test equipment, calculators and special build electronics for commerce and defense. They were the best there was at it.
They built a decent computer and their printers were superb.
Enter a guy with an ax to grind and does not care what or who he has to destroy to get his revenge.
HP BOARD! Wake up! This sociopath is going to destroy HP and the monies that you have invested in it. WAKE UP! WAKE UP. You've already lost half the value of the company. WAKE THE #$@% UP! FIRE HIM! WAKE UP! AS A STOCKHOLDER I WANT HIM FIRED RIGHT NOW!
WAKE UP. YOUR HEADING FOR DISASTER WITH MY MONEY. WAKE UP!

Trying to be like Steve? (2)

Jack Kolesar (532605) | more than 2 years ago | (#37240220)

So, I guess this is what happens when you have a CEO with the 100% of the EGO/CONTROL issues as Steve Jobs yet 0% of the VISION. Seems too bad for HP.

HP should be seporated from their belt and laces (1)

sensationull (889870) | more than 2 years ago | (#37240222)

Given HPs current actions they should be put in a padded cell with their laces and belt removed. It's current actions are retarded and their CEO should be thrown out of the corporate jet.

Not _sui_cide - destruction by external party (5, Insightful)

blind biker (1066130) | more than 2 years ago | (#37240226)

It's time we start acknowledging that CEOs of publicly traded companies don't give a shit about the companies they are supposed to lead. They got into positions thanks to buddy networks and golf course chats. These people are supremely capable at social manipulation and lining their own pockets.

Why, is the HP CEO in any way going to feel the sting if he leaves a smoldering corpse of a company behind him? Is he not going to get paid? Scrap that: is he not going to get handsomely paid + bonuses + golden parachute? So why the fuck wouldn't he blow up HP? The guy is getting paid in either case, so why not get on with his psychopathy and have fun with wanton destruction of other people's lives?

Re:Not _sui_cide - destruction by external party (4, Interesting)

dkleinsc (563838) | more than 2 years ago | (#37240336)

To add more evidence to this, consider how well Carly Fiorina has been treated in the press. When she was running for public office, all the press was on how she was a successful businesswoman who knew how to make an organization successful, despite all the evidence that the opposite was true.

Re:Not _sui_cide - destruction by external party (1)

Spinlock_1977 (777598) | more than 2 years ago | (#37240346)

John Stewart had an author on a few weeks ago that claimed a disproportionate percentage of CEOs were sociopaths - i.e. those for whom guilt and conscience have little meaning.

Re:Not _sui_cide - destruction by external party (1)

OzPeter (195038) | more than 2 years ago | (#37240454)

John Stewart had an author on a few weeks ago that claimed a disproportionate percentage of CEOs were sociopaths - i.e. those for whom guilt and conscience have little meaning.

Well if it is your job to direct the company as a whole its best not to be bogged down with how your vision negatively affects Jimmy in the stock room or Mary in the typing pool (and yes I remember when secretaries et al actually typed), otherwise you would end up paralyzed with indecision.

Re:Not _sui_cide - destruction by external party (4, Insightful)

ducomputergeek (595742) | more than 2 years ago | (#37240406)

Say what you will about Apple and Steve Jobs, but at least Jobs gave a damn about the products his company made.

Re:Not _sui_cide - destruction by external party (1)

CaptainLard (1902452) | more than 2 years ago | (#37240426)

I work for a large publicly traded corporation. The priority list goes like this: Shareholders, Customers, Employees. So if they increase the perceived value of the company, they are doing their jobs in looking out for the #1 priority so they do give a shit, just not about anything else. In HP's case I'm guessing someone "ran the numbers" and got x% greater profit margin in corporate software over corporate hardware so the board jumped on it like a college basketball player jumping into his team mates during the home game introductions. Then because they were so smart everyone gave themselves raises and high fives like a college basket ball player high five-ing his team mates during the home game introductions. In summary who cares about HP, how long till midnight madness?

Re:Not _sui_cide - destruction by external party (0)

Anonymous Coward | more than 2 years ago | (#37240520)

It's usually: Executives, Shareholders, Customers, then the rest of the employees.

Re:Not _sui_cide - destruction by external party (0)

Anonymous Coward | more than 2 years ago | (#37240514)

If I had mod points I'd add to your score - this point should be obvious to everyone but it isn't. The "what have you done for me in the last quarter" mentality of most large American companies is killing our country's industries, making fabulously wealthy executives even wealthier and squeezing the life out of the middle class.

Re:Not _sui_cide - destruction by external party (0)

Anonymous Coward | more than 2 years ago | (#37240552)

And who at HP is going to stop him? The Board of Directors? The same board filled with executives that have business ties to the CEO Apotheker? In fact, Apotheker was instrumental in the selection process to get his pals on the board, so he's pretty much free reign in the company. More likely, though, is he'll lower HP's valuation enough to make it tempting target for acquisition, probably in order get at HP's IP holdings. That's where the real wealth of a company lies nowdays.

I want what HP is smoking... (5, Interesting)

fuzzyfuzzyfungus (1223518) | more than 2 years ago | (#37240244)

I've heard that their Big Serious Expensive has its points; but every interaction with HP software that I've had down at the "commodity x86s and their peripherals" level has filled me with an unquenchable desire for bloody vengeance upon every last persons responsible for it.

Their winCE thin clients have had timekeeping bugs in certain models(that engineering kindly verified and then decided not to fix...) Their linux ones have glaring security deficiencies that they wouldn't even acknowledge our bug reports about(Hypothetically, if you were adding a diagnostic page that allowed the user of a 'kiosk' system to use ping to verify connectivity, would you implement it by giving them a freeform text field and then prepending 'ping' to whatever they entered and dumping it straight to the shell without any sanitization? Well, the input "$IP_ADDRESS && xterm" certainly suggests that HP did... For extra credit, the 'kiosk' program was running under a passwordless account on the sudoers list...)

The firmware of their network printers has been a mess for years, and their printer drivers(even for the workgroup networked printers with PCL/Postscript, let's not even talk about the direct-attached inkjet shit) actually seems to be getting worse as time goes on. Servers and workstations are ok, largely by virtue of being more or less stock intel or AMD kit, with drivers provided by people who don't utterly suck.

I know that hardware's margins don't keep the Wall street boys happy; but what sort of insanity could convince HP that they are a software company?

Mulally example not great... (2)

Richard_at_work (517087) | more than 2 years ago | (#37240254)

Considering that Mulally launched one of the most bodged development programs at Boeing, the 787. Not only did this program reach in the direction of considerably technical improvement over current generation products, it did it with a design and build methodology that Boeing had never tried before.

This irresponsible cock up by the board, headed by Mulally, drove the 787 to be over three years late for EIS, with huge problems yet to rectify, and Boeing billions of dollars worse off.

Mulally has a lot of great achievements, but the world would see him completely differently if he had remained at Boeing to see out even the first few years of the 787 debacle. Instead, he bailed early on and now is remembered for the positive work he has done at Ford.

Re:Mulally example not great... (1)

Hadlock (143607) | more than 2 years ago | (#37240494)

Kicking Boeing for being chronically late on delivery and grossly overbudget. Either you're new to the aviation industry, or you didn't grow up in washington state ;) You're forgetting that you're talking about a defense contractor. over half their revenue comes from defense spending [stock-analysis-on.net]. This is completely par for the course. In the 1990's there was a big hubbub about Boeing not even being sure if they were running at a profit or a loss.

Perhaps hardware outsourcing doesn't work (1)

davide marney (231845) | more than 2 years ago | (#37240266)

Maybe they've decided that no US company can win a market where manufacturing is outsourced, which means unless they win the software race, they're out of business eventually anyway.

Re:Perhaps hardware outsourcing doesn't work (0)

Anonymous Coward | more than 2 years ago | (#37240350)

Totally agree. Just look at Apple. They will never be successful. Totally F'ed...

Re:Perhaps hardware outsourcing doesn't work (3, Interesting)

RogerWilco (99615) | more than 2 years ago | (#37240358)

I think it just means that they have no clue how Apple is doing it.

Re:Perhaps hardware outsourcing doesn't work (0)

Anonymous Coward | more than 2 years ago | (#37240398)

That's possible, in which case this move indicates some pretty good foresight on the part of the board, and it may ultimately save the company.

On the other hand, the implementation is absolutely *awful* -- to the point that I'm still seeing HP Touchpad commercials on TV, wasting more money on top of the hardware liquidation they just had. It's like spending money on advertising for a cruise ship that has already sunk. Yeah, they probably had contracts already signed, but when they do things this way it makes them look utterly incompetent.

Nokia did it more efficiently (0)

Anonymous Coward | more than 2 years ago | (#37240274)

It's taken years for HP to get here. If only they had known about Nokia -- all they needed to do was hire a Microsoft exec as their CEO and HP could have destroyed themselves in a matter of months!

RPN calculators (1)

Stephen Chadfield (7971) | more than 2 years ago | (#37240304)

They should focus on RPN calculators. In DayGlo colours to attract the youth market.

Re:RPN calculators (1)

ducomputergeek (595742) | more than 2 years ago | (#37240388)

These days you can download the M48 emulator for iOS, I have it on my iPhone. I still have my HP48G and it still works after close to 20 years, but I rarely have use for most of it's advanced features these days. It's been a while since calculus.

That being said I still love RPN. So I switched the skin to emulate the native iPhone calc only now it has the old HP48 screen and is RPN. Best of both worlds...

Corporate suicide at both ends! (0)

Anonymous Coward | more than 2 years ago | (#37240334)

"'as if Alan Mulally left Boeing to join Ford as CEO, and announced six months later that Ford would be making airplanes.'"

And that Ford would also be "getting out of the car business".

I mean, sheesh, talk about sabotaging your current income base. Sure, commodity hardware isn't exactly lucrative these days, but why be so focused on turning it into a deep revenue hole even before you even have a buyer lined up?

the company's traditional strengths (1)

Cluelessthanzero (1885004) | more than 2 years ago | (#37240366)

HP's traditional strength was getting away with blatantly anti-market practices on the blow-up printers market. They earned fortunes with their good old-fashioned below-production-cost devices and no competition on cartridges tricks. How they could get away with it so long shows how corrupted the US market regulators have become.

Hopefuly more to come (0)

Anonymous Coward | more than 2 years ago | (#37240376)

Oh, isn't there anything we can do to make other corporations follow suit (pun intended)?

How not to pick a CEO (0)

Anonymous Coward | more than 2 years ago | (#37240378)

All those companies are doing the same mistake: They chose CEOs that doesn't come from companies that are really in the same business, and they don't (care to) understand the business of the company they are working, so they steer the company into business they know better and are more comfortable.

3COM all over again (0)

Anonymous Coward | more than 2 years ago | (#37240410)

HP, please ask 3COM how dumping their core business model worked out for them back in 99 or 00. Oh, wait, you can't because they are no longer in business but for their assets which HP purchased. They were the main competetor of Cisco in the switch and router market and they seppuku'ed out with no warning. They realized in a year or so what they had done, but too late, no trust after that. They will regret the decision, if not already.

Ford DID make airplanes (3, Interesting)

scharkalvin (72228) | more than 2 years ago | (#37240422)

"'as if Alan Mulally left Boeing to join Ford as CEO, and announced six months later that Ford would be making airplanes."

You realize that Ford DID make airplanes a long time ago. Not only that but they were GOOD at it.

And how much do these dumb-ass CEOs get paid? (1)

tekrat (242117) | more than 2 years ago | (#37240478)

You know, I could also make stupid, ass-backwards decisions for $millions of dollars per year. Heck, I'll take half of whatever you're paying the current clown. Here's my resume HP, I hope you'll consider that I probably have a better background to run your company because I am actually familiar with your products, unlike you're current CEO, who obviously has decided that being CEO of HP means burning it to the ground and hopefully making a small pile of the ashes to chop up among the primary shareholders.

The prescription for HP (1)

Registered Coward v2 (447531) | more than 2 years ago | (#37240596)

[quote]"If Apple's looking for a seamless transition, advises the NYT's James B. Stewart, it definitely shouldn't look to Hewlett Packard. In the year after HP CEO Mark Hurd was told to hit-the-road-Jack, HP — led by new CEO Leo Apotheker — has embarked on a stunning shift in strategy that has left many baffled and resulted in HP's fall from Wall Street grace (its stock declined 49%). The apparent new focus on going head-to-head with SAP (Apotheker's former employer) and Oracle (Hurd's new employer) in enterprise software while ignoring the company's traditional strengths, said a software exec, is 'as if Alan Mulally left Boeing to join Ford as CEO, and announced six months later that Ford would be making airplanes.' Former HP Director Tom Perkins said, 'I didn't know there was such a thing as corporate suicide, but now we know that there is.'"[/quote]

Only time will tell if Mr. Apotheker's prescription for HP was the right one.

While abandoning low margin stuff makes sense, my guess is the real end game is a merger with one of the big software companies. You hire a software guy and you get a software guy - someone who sees the margins to be made in software vs hardware and are surprised he ditches the hardware business except where there are still decent margins to be made?

It's not surprising - HP tried to move more into non-hardware business when they tried to buy PwC's consulting arm, this is just a continuation of that strategy.

PS Ford actually did build airplanes at one time.

Good riddance (1)

dalias (1978986) | more than 2 years ago | (#37240646)

Does this mean an end to their crapware-filled laptops and $20 printers subsidized by $80/month DRM'd ink refills?

Read the tea leaves (0)

Anonymous Coward | more than 2 years ago | (#37240650)

Didn't they used to make great test/instrument kits? Then that evil bitch took over and ran every good engineer/top exec out of town? They kind of took the Kodak business plan. Get used to this, its the new American way of business. People who have no business running a company are now taking over, esp where affirmative action has pushed people in positions they can't handle. My prediction, HP is dead, you may see the name around but it's dead. The incompetence is to entrenched to get it out now. They are going the way of Kodak and all the rest.

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