Analyst events are strange things, and Hewlett-Packard's coming-out affair featuring CEO Leo Apotheker was no exception. Imagine having your vision edited by lawyers and you can begin to understand the challenge. The attorneys insist that the audience be read a boilerplate disclaimer, which warns about forward-looking statements. Imagine that: A vision that may include forward-looking statements. (For more on Apotheker, see "Is There Enough Software To Knit HP's Strategy Together?")

Because of the lawyerly oversight, CEOs follow some other basic rules:

>> Rationalize the assets your company has. HP didn't buy Palm under Apotheker's watch, nor was he around for most of the acquisitions that contribute to HP's core businesses, but he still had to weave a story that made it sound like one company should make printers, phones, tablets, PCs, servers, a weird array of storage devices, some management products, some security products, and almost no software, including an operating system almost no one uses. That's a tall order, and Apotheker did a relatively good job of it. His vision is that HP is the cloud company that can do everything from store your data to analyze it, all in an environment that's secure and familiar to most enterprises.

>> Slide in a clear and present need for a new business or two. Preferably, these are businesses the company isn't in today but will need to be in soon. For HP those new lines are platform as a service, data warehousing, analytics, and, for consumers and businesses alike, an app store. That last one will probably play Sears to Apple's Bloomingdale's, but it's a new business announced, so that box gets checked.

>> Rationalize what your business does and talk about some cool new things your business is going to do. But with this kind of storytelling, it's easy for a CEO to reach beyond his grasp, and Apotheker didn't disappoint. He said HP wants to put WebOS on 100 million devices per year. Given that HP is the No. 1 maker of PCs, that goal might seem reasonable. But compatibility is what brought HP to the pinnacle of a business with terrible margins, so pushing a proprietary operating system that has a tiny user and developer base is going to take substantial investment and cut into those margins. Claim all the "operating efficiency" you want, but Apple with iOS and Google with Android have spent some big cash to get where they are, and the folks in Redmond aren't going down without a fight (all appearances to the contrary notwithstanding). If HP wants WebOS to be big, it had better be ready to spend to make it big.

My bet is that'll never happen. While HP has a nice piece of the consumer market and a nicer piece of the enterprise market, the former will show less loyalty than the latter. If HP's end user devices seem expensive, proprietary, or lacking features, consumers will be just as happy to buy from a competitor.

HP understands only the hardware part of the consumer market. Consider photo sharing. Just because someone buys an HP printer or camera doesn't mean he'll prefer HP's proprietary photo-sharing service over Flickr or Facebook. That same thinking will probably doom the company's operating system and app store plans. HP's store will start out a distant fourth behind Android, Apple, and Microsoft. HP would have been better to partner with Google on Android and continue to do what it knows best: great hardware.

Art Wittmann is director of InformationWeek Analytics, a portfolio of decision-support tools and analyst reports. You can write to him at [email protected].

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InformationWeek: March 28, 2011 Issue

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