HP – What’s your strategy? Steve Balmer’s Burning Platform

August 18, 2011

in Strategy Formulation

I’m bewildered and I’m not. I’m disappointed, and yet not somehow that surprised….  and that’s I presume much how the market will suck up the implosion of HP.

As a customer — individual customer of HP I don’t hold much water in the announcements today to buy Autonomy and then potentially spin off the Personal Services Business. However this announcement may not have quite the effect of the Elop announcement on Nokia and their products – still it will be something close. Dell which had little to cheer about yesterday can hope and now worry further. I’ll ask you later what will Microsoft do?

As a customer of the HP brand I’ve owned printers, computers, calculators and probably other things too. Although they’ve lost my household in the last four years… and perhaps that’s partly why the announcement today. Still I’m sad. Here was an inventive company who like Kodak failed time and time again to find a more agile footing. The personal services business may be worth nothing without the HP brand. So perhaps HP will find solitude and respect in its new hands off unstructured Autonomy.

I’m incredulous really! So, PC’s HP style are low margin. Well yes – but did they have to be? In all the shenanigans across the market, Apple share up, Google buying Motorola, Nokia being milked by Microsoft, etc. There’s a group of traditional tech companies, Dell, HP, Lenovo, Nokia, RIM, Motorola, Microsoft, that appear to be failing increasingly quickly. Most of this traces back to an idea of who they serve.

HP will now be a services company. They won’t serve me although their services may impact on me in some way. Yet I can’t help feeling that all these companies have the wrong strategy. Running to the laggards, the slow-pokes, the dinosaurs. Yes turning inwards to the enterprise is potentially dangerous. Whether the new service platform works or not the real genie is the mobile phone and device. HP just gave up. They aren’t going to be in my pocket. And there’s part of the rub. I decide what I want in my pocket. Increasingly the enterprise has to adapt and fast at an accelerating rate.

These companies have forgotten a deep and basic truth. “Empowerment works” The first IBM PC was empowering….. I then took many PC’s / laptops into the businesses I worked for. That ole HP calculator was empowering. MS Office was empowering. The iPhone is / was more empowering that the Nokia N95 that preceded it;  which was too complicated to push everywhere just like the first IBM PC was. Business is about people. When I hear about strategy that sinks to tracking, manipulating, capturing, servicing I get a sick feeling in my gut. Yes companies have made money off information assets. In fact that’s been the most successful “support” model for a long time. I say support for one must learn and adapt. P&G is awesome when it comes to basic consumer products. They have more data than many companies and they use it. They have also never forgotten that it is me and you that ultimately buys.

Rant sort of over….there are a collection of issues here that are emerging in and across the tech industry. The biggy remains “empowerment”. If you want to disrupt the market that’s what matters.

Right now I see copy-copy strategies or at least the analysis thereof. It’s time to stop looking at the market and products through Apple tinted lenses. The whole PC/Mobile/Carrier/Google/Bandwidth model is shaky. HP bails… Motorola gives up (did years ago), Nokia does Microsoft’s bidding. So what’s the mess here? Yep we are in a post PC world. Android remains inferior (doesn’t mean it always will be). Microsoft is about to be left out of it all…..

Fact is Steven Elop wrote a burning bridge platform that was as much Microsoft as Nokia back in February. Maybe Steve Balmer can now just produce a reprint. HP can sell the PC business for lack of returns. That lack of returns is across Microsoft customers. HP just announced the death of the PC as they see it. It’s also a vote of no-confidence in Microsoft. And now perhaps Microsoft has two potential purchases in its short term future. HP’s PC division and Nokia’s Smartphone handset division.

HP to Pay $10.3B for Autonomy, May Spin Off PCs – Bloomberg

Hewlett-Packard Co. (HPQ) is planning a sweeping overhaul of its businesses, agreeing to buy Autonomy Corp. for $10.3 billion and weighing a breakup that would unravel the much-debated Compaq Computer Corp. purchase.

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  • Tony Vitale

    There is a perfect candidate to buy HPs computer busines and that is Microsoft
    Yeap, that’s right Microsoft, now before you say I am crazy
    slow down and think a minute. Imagine that Microsoft purchased HP as a way for them to keep the windows platform relevant. Let’s say Microsoft completely reverses their stategy and stealing another page out of Apples playbook. They design and build ( they have some very talented hardware designers already) a quality PC the way it is supposed to be built showcasing the best of their technology , displaying them in their own Microsoft stores and vertically intergrating them with phone, music, gaming just like Apple. Microsoft could simplify HPs line and take advantage of HPs extensive retail channel to place a high quality machine in the publics hands and go face to face with Apple in advertising. Microsoft could also build a build a powerful high end machine for enterprise businesses to compete there with Oracle/Sun utilizing service and support. When they are ready to move into Windows 8 they are in a position to transition large corporations into that new platform instead of risking loss of those customers to Oracle or Apple.

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