Does this mean we make PCs again?
23 September 2011 | 0
Having been less than a year in the job, Leo Apotheker has been replaced by Meg Whitman, a former head of eBay, as CEO of HP.
After making some interesting, indeed some might say bold, decisions about the direction of the company, Apotheker’s time at the helm also saw a sharp drop in share price as investors were not entirely convinced by the new direction.
Apotheker, who formerly headed German software giant SAP (again though, for less than a year), was convinced that HP needed to become a software focused company and so set about divesting the PC business, the Personal Systems Group (PSG)-that also meant that the recently acquired Palm business, encompassing tablets and smart phones, including the operating system webOS.
When the announcement was made, it seemed as if the usual round of suitors would appear and some deal would be done, but as one by one the various names mentioned fell away, it seemed that HP was unclear as to exactly what it would do with the PSG, whether it would be sold or spun off. However, as even the most casual market observer will now be able to tell you, markets don’t like uncertainty, and so the share price fell.
The PSG announcement came at around the same time as a major acquisition by HP, the UK company Autonomy. Headed by an Irish born boffin, the company is at the forefront of data analysis that would certainly be a central plank of any Big Data push by HP. However, HP paid a staggering €8.66 billion for Autonomy, which was regarded as something of a premium. I think you can guess what happened to the share price!
So, where does that leave HP now? Well Whitman is regarded as the person who brought eBay from the level of online flea market to a global force and so is of undoubted ability. However, HP’s major strength lies in its enterprise business where it offers a full range of services from servers and switch gear, storage, operating systems business applications and professional services. This is a deeply conservative section of the market and while it relies on new technology, it is not the kind of market that will jump on any emerging bandwagon. Therefore, HP will need to be careful about how it positions itself and how it gets its message across if it is to maintain its goal of becoming a bit more like IBM. But how much of the goal of becoming a major force software was Apotheker’s vision and how much was HP’s? That remains to be seen, but I bet there are quite a few employees of the PSG that will be waking up this morning a little more hopeful for the future than they did last Friday morning. Alas, the same cannot be said for some Palm employees.