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8/16/2012
11:59 AM
Josh Greenbaum
Josh Greenbaum
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Can HP Remake Itself Before It's Too Late?

When a company's most recent success is a good Olympic slogan, it's a sad day, but such is the current state of HP. The once mighty force has become a fragmented mess.

There is some good news: HP Software--which in retrospect might be happy it was kept separate from Autonomy--is building out a strong cloud management capability, and the systems business has some impressive products and might be getting an infusion of good karma from the HP/Oracle lawsuit ruling. The printing division has more than a few cool products and innovations up its sleeve, and HP's latest ad campaign had someone holding what looked like a new HP Slate tablet, hopefully targeting the pending Windows 8 launch.

But the problem that bedeviled Apotheker and would have still weighed on him even if he had not been fired last year, remains: There's no cross-company strategy, no way of talking to the market about how the whole is greater than the sum of the parts, no synergistic product set that taps into the company's ability to provide a mix of services, hardware, and software that, taken together, provide that value-added positioning that would remake Hewlett-Packard's tarnished brand.

Instead, HP remains the company that Apotheker's predecessor, Mark Hurd, was able to run to the short-term satisfaction of investors and the detriment of anyone--employees, partners, customers--interested in long-term value: A company that in reality is a federation of completely separate entities, rarely working in unison, hopefully not too often at loggerheads, unable to cross-sell, and stuck in a corporate version of the Peter Principle having risen to its level of incompetence and unable to go any further.

Not that HP isn't trying, at least on the branding side. Its new "Make It Matter" spot, shown during the Olympics, is the culmination of a year-long effort that is targeted as much at the outside world of customers and partners as it is at the employees who, for good and bad, are apparently running for the exits in unexpected numbers. In that spot, the message is clear--the power of technology to help people work, achieve their dreams, learn, create, and change the world is HP's birthright, and that's what matters. Mixed into the visuals are the many ways in which the company already makes those aspirations come true, and it shows a cool side of HP that most people have no idea exists. In short, it's a well-done piece worthy of the aspirations of a once-great company.

But the question remains: Is it too late to make those aspirations a reality? Can HP really matter to the market again? My sense today is that it might be too late, at least for the federated HP that aspires to be like IBM in 2012 but looks more like IBM in 1993, on the ropes and losing relevance and market share. In order for HP to be what it aspires to be would require not just a great pan-HP strategy but the rapid and flawless execution of that strategy, and that's where I'm a little pessimistic.

It's hard to turn around a company whose employee base is so massively demoralized, where the silo mentality is so ingrained that acquired employees continue to use email addresses ending in eds.com and palm.com years after their companies were acquired, and where the third CEO in three years has yet to do more than triage a company that's seriously in danger of succumbing to its wounds.

What Whitman needs to do, in my opinion, is emulate Steve Ballmer: sign on to a strategic vision--the cloud, in Microsoft's case--and then move everyone in the company, many kicking and screaming, toward that vision. Put a slogan in the mix and make everyone in the company use it as a tag line and repeat it until it actually starts to sink in. ("We're all in" became the de rigeur sign-off for Microsoft email messages.) And then tell Wall Street and the likes of Vanity Fair to stuff it, ride out the criticism, and start moving product strategy forward.

And while there are those that think that Ballmer laid an egg with his new approach (and I'm emphatically not one of them), even his detractors will have to admit that Microsoft as a company has a vision and is engaged in it, the employees are excited, and there are some seriously interesting bets on the table that could, and will, IMO, turn Microsoft around: Azure, Windows 8, Kinect, to name a few.

Going the Microsoft route is hardly a guarantee for success, in part because it takes years (Microsoft has been at its new vision for at least five years, and probably needs one more year to really make it solid), and in part because coming up with a truly momentous vision is harder than just about anything else in the technology industry. And it's even harder still when triage continues to be job number one two years after Hurd left.

In the end, vision will be the test of Whitman's tenure, if she makes it past the one-year mark. And my sense is that her vision won't include every one of the business units that make up HP today, mostly because it's hard to envision how to bring together a dying PC industry, an increasingly commoditized printer and server business, a chronically underperforming services business, and a software division that doesn't actually own most of the company's software assets, and forge a great, new strategy that the whole company can march toward.

It's clear HP is trying with its cloud strategy, and there might still be something to do with business analytics that's meaningful, but these are initiatives that would have been visionary if they'd started under Hurd's tenure. Today they look too much like me-too, catch-up strategies.

Fixing all of HP is just too hard. Even if the CEO was named Meg Wonder Woman, I wouldn't bet on her being able to bring so many struggling lines of business together and make them matter. Something will have to go away in order for HP to live on, and I would expect that a year from now HP will have been significantly downsized if, indeed, it's going to continue to matter at all.

Some things are just too big for their own good, and HP today might be just one of those things.

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wht
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wht,
User Rank: Strategist
8/23/2012 | 7:53:05 PM
re: Can HP Remake Itself Before It's Too Late?
You should have gone online to HP.com. Not sure what stores you looked at, but I often find laptops in the $500 range at Staples, including more than one HP model. If you bought from Dell, you likely paid more than you would have at Staples or Office Max.
Andrew Hornback
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Andrew Hornback,
User Rank: Apprentice
8/23/2012 | 1:24:09 AM
re: Can HP Remake Itself Before It's Too Late?
To be quite honest... when HP announced that they were going to kill off the Palm, I could already smell the decomposition happening. As a former Hockey Puck, er, Palm Pre owner, I have no love for the organization, for how Palm turned their back on their customers and then HP followed suit. The attempted relaunch and total backfire of webOS was icing on that cake.

When HP announced that they were going to try to take themselves down the path that IBM did a number of years ago - focus on services, sell off the laptop/desktop divisions - I thought that maybe they were on the right track. That misfire has really led me to stay away from HP - both in my professional and personal lives.

HP needs to regain an identity as opposed to this nebulous cloud of technology. Interestingly enough, I see Dell following the same path with all of their recent purchases. These giants need to determine where they're going, or they're going to implode from their own gravity.

Andrew Hornback
InformationWeek Contributor
AustinIT
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AustinIT,
User Rank: Apprentice
8/21/2012 | 5:37:18 PM
re: Can HP Remake Itself Before It's Too Late?
You know things have got to be bad when even the likes of Carl Icahn haven't shown any interest in picking their bones.
pintaricn
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pintaricn,
User Rank: Apprentice
8/21/2012 | 2:24:49 PM
re: Can HP Remake Itself Before It's Too Late?
Great post.
ANON1237925156805
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ANON1237925156805,
User Rank: Apprentice
8/20/2012 | 7:03:49 PM
re: Can HP Remake Itself Before It's Too Late?
The mismanagement of HP goes back over a decade and starts with the board of directors. They have swung from asleep at the wheel-letting charismatic CEO's go their own way-to hypervigilant-setting arbitrary and unrealistic deadlines for CEO's to achieve the impossible.

It's the job of a company's board to counterbalance the short-term thinking that results from focusing too hard on immediate shareholder value. Board members are are in effect the custodians of the long term health of a company. That means that they must require CEO's to articulate an overall vision that extends out into the future and to drive all business decisions, whether it be acquisitions or changes in direction, based on whether they fit into the big picture.

HPs board has quite simply failed at this. They rubber stamped the purchases of Compaq and EDS though both were questioned by experts in the industry and neither fit into a coherent and specific narrative about where HP was headed. They did nothing to ensure that these companies were properly integrated into HP.

Once jolted upright and forced to restructure, they brought In Leo Apotheker and asked him to fix the mess in 9 months or else. The message was "We're watching closely now." Apotheker's flip flopping wasn't helpful but frankly the problems were too deep-seated by then for him to have succeeded in so short a time with such a limited mandate.

Now we read that Ms. Whitman is also on a ticking clock. We don't read that she's been asked to start by saying hey, HP, what are your natural abilities, what do you want to be when you grow up and what do you need to major in to make that happen? We read that she's been asked to fix it. Fix what, how, why?

There's brilliance yet in the organization and some residual motivation in areas of historical excellence. But since none of it is directed at a goal, the energy dissipates faster than it can be generated. Add to this the fact that Mr. Hurd completely destroyed the employees' confidence that they would be treated justly and with respect. Hence the brain drain just when experts are most needed.

It's not easy to find any cause for optimism here and that's heartbreaking. Barring a miracle, we can only hope that the components of HP that are best of breed don't go under with the sinking ship.
skandakatla
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skandakatla,
User Rank: Apprentice
8/18/2012 | 6:15:08 PM
re: Can HP Remake Itself Before It's Too Late?
Let us wait for the good days for HP.
jsmith891
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jsmith891,
User Rank: Apprentice
8/18/2012 | 5:07:49 PM
re: Can HP Remake Itself Before It's Too Late?
A company that sells printers which need $40plus ink cartridges after printing five pictures is a company not interested in my business. The kiss is not worth the screwing.
dchasselshp5
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dchasselshp5,
User Rank: Apprentice
8/18/2012 | 12:58:24 PM
re: Can HP Remake Itself Before It's Too Late?
HP have been like many large "IT" vendors been victim of the "deal junkie" syndrome and now face the consequences of poor strategy to integrate branding. This was an eat or be eaten world driven by short term demands from stock markets. Buying mature companies might look good with revenues but in reality they were buying old technologies. Maybe HP will be "lucky" and tackle this as others disguise the problem. Interesting to see Progress Software face reality and unload their "distractions" to their core business and downsizing just as HP will have to do?

There is another angle that may be the saving of HP. enterprise software is long overdue for change and it will be a step change that may leave incumbents in same position as HP in having to face write offs? What is this change? It will see business software become commoditised where custom solutions can be built where core code does not change no code generation or compiling. This has now arrived with a few having spent many years on R&D. Independent analyst Naomi Bloom sums it up here http://infullbloom.us/?p=3222.
G«£Writing less code to achieve great business applications was my focus in that 1984 article, and it remains so today. Being able to do this is critical if weG«÷re going to realize the full potential of information technologyG«•
G«£G«™.how those models can become applications without any code being written or even generatedG«•.
G«£If IG«÷m right, youG«÷ll want to be on the agile, models-driven, definitional development side of the moat thus createdG«™..G«•
In a subsequent tweet author said G«£It really matters how your vendors build their software, not just what they buildG«• and Michael Krigsman a leading analyst tweeted referring to the article G«£Pointing to the technical foundation of futureG«•.

HP may just have an advantage over others for this as they recognise solutions will drive all sales as you say hardware is commoditised. Maybe the stock markets should take stock on how technology companies grow in the new era of smart buyers who will be encouraged to be so by independent analysts by understanding what exactly it is they are buying into for their business software?
IT Outsourcing Professional
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IT Outsourcing Professional,
User Rank: Apprentice
8/17/2012 | 9:05:03 PM
re: Can HP Remake Itself Before It's Too Late?
CEO's from Ms. Fiorina up to including the Apotheker operated the company in a manner that promoted little or no synergy between business units.

During a recent Outsourcing account review the customer remarked that they could order laptops and servers faster than HP Enterprise Services staff using online options.

The same customer (along time customer from EDS days) also remarked that the HP software solutions had fewer capabilities than the former EDS solutions. They also claimed that HP software came with an immediate remediation plan, unlike competitor's software that came with an implementation plan.
EVVJSK
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EVVJSK,
User Rank: Apprentice
8/17/2012 | 5:31:28 PM
re: Can HP Remake Itself Before It's Too Late?
Recently, I went to look for a laptop for my niece for college.
I was looking in the $550 range. HP didn't have anything to offer on that range at local electronics outlets so I went online to Dell. Have to be competitive.
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