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Image representing Hewlett-Packard as depicted…Image via CrunchBase
Ten years ago almost to the day, Hewlett-Packard bought Compaq Computer for $25 Billion and in so doing re-arranged the personal computer industry. All H-P had to do was to get its corporate pinstripe, manage by walk around background to meld with the freewheeling Houston, Texas company that created the idea of the portable computer. Now, if all the reports are correct, here we are ten years later with H-P exiting the personal computer business. Sometimes things just don’t work out the way the powerpoint slides say they will. Oh yeah, and they are ending Web OS also. The computer, as the H-P ads said, might be personal again but H-P is ready to end that relationship.
Remember that IBM did much the same thing when it sold its personal computer business to Lenovo. That sale, much disparaged at the time, allowed IBM to concentrate on services and software and has paid off handsomely.
The same thinking of software and service seems to be uppermost in Leo Apotheker’s mind as in addition to being ready to exit the PC business, he is willing to put $10.3 Billion down to buy Autonomy — the British based company that is sort of a Google for the enterprise. It is also a kingpin in the emerging big data business intelligence space — which by the way is where IBM is also headed.
For now, H-P seems to be content to keep its server and networking business which it should as, somewhat like IBM again, this is a strong business that can be closely tied to enterprise software and services. And it also gives H-P the opportunity to make the most of the EDS aquisition which seems to have existed at a strange arm’s length relation to the rest of H-P. I don’t think Leo wants to touch the printer business which might be the highest margin (remember those refills) in the high tech business.
So, what does it all mean? H-P has been a conglomerate that sometimes worked and sometimes faltered. Now, Leo is focusing H-P and getting ready to leave the non-essential pieces. Here’s the problem: IBM has this business well developed. Cloud computing and mobile is re-arranging the enterprise software and services space. H-P has to get rid of the non-essentials at the same time it is getting ready to offer software and services to the next generation of enterprise software.
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