After a rocky start to his tenure as CEO, Leo Apotheker takes the stage in San Francisco to lay out his vision for HP.
We are live blogging during HP's press and analyst meeting. Our feed will begin at 1 p.m. PST/4 p.m. EST. You may need to re-fresh this page to see the up-to-the-second posts as they come in.
What To Expect From Apotheker
Today's Hewlett-Packard press and analyst meeting is likely to bring few surprises from new CEO Leo Apotheker. He's been making the rounds with the business press, laying out the basics of his vision for HP. In those articles, he has presented himself as the antithesis of former CEO Mark Hurd, saying that HP has cut spending enough already and that the company needs to return to its R&D roots and empower employees to take more initiative.
Apotheker's widely expected to spend time on how HP will improve its revenue from software and services. HP pales in comparison with IBM and Oracle in those areas, and most analysts see those sectors as ripe for profit growth Despite acquiring EDS in 2008, HP has nowhere near the cache of IBM in services. And when it comes to software, especially applications, it isn't in the same league as Oracle, a former partner turned blood rival following Oracle's acquisition of Sun and its naming of Hurd as a company president.
As it grows its business consulting business, it must also expand its software catalog. Acquisitions going back to Opsware and continuing through MercuryMY ADD, ArcSite, and Fortify show that HP is intent on building a strong infrastructure software base. While we don't expect to hear about new acquisitions, Apotheker will likely point out areas where HP will seek them. Recent acquisitions in the storage market (Lefthand Networks in 2008 and 3Par in 2010) are likely to be followed up with purchases of data management and data analysis vendors. HP's acquisition of Vertica last month was a step in that direction.
The Palm acquisition last year brought the company WebOS. Apotheker has already said he wants to ship the operating system with every end user device it makes - including PCs. That'll spell a lot of potential users for WebOS, but HP still has to make the platform attractive enough to use, and that means a strong app collection and developer community.
Reporting so far indicates that HP is intent on keeping its PC business. The question then becomes how HP will use its leadership in that low-margin market to create something of unique value. Apple is the obvious comparison here, and despite the fact that HP has never been the definer of cool and hip that Apple is, HP does have a unique position with its lead in PCs and printers and strong ability to enter other markets like phones and tablets.
Rationalizing all of HP's strategy and its past and future acquisitions will be a tough task for a two-hour presentation. But with HP coming off a bad quarterly earnings report and a lukewarm overall business, its new top boss will have to be at the top of his game today.
1:34 p.m. PST: Digitization is largely appealing to industries like health care and insurance.
1:35 p.m. PST: Analytics -- HP doesn't need to own a big transactional oriented products. Partner for that and focus on analtyics for structured and particularly unstructured data.
1:36 p.m. PST: Here comes the demo -- Martin Fink(???) talks about Vertica acquisition.
1:36 p.m. PST: "Only Vertica has the ability to load big data and analyze it at the same time."
1:37 p.m. PST: Others are dealing with retrofitted architectures.
1:39 p.m. PST: HP brings its HP converged infrastructure to Vertica to supposedly make a limitlessly scalable "big data" analysis system.
1:40 p.m. PST: Big data analysis brings the "context" that Apotheker has been talking about.
1:41 p.m. PST: Demo shows 192 cores analyzing data (blue lines popping up and down).
1:43 p.m. PST: Lots of explanation for the demo -- it basically shows how a car rental company can set rates on the fly based on large data analysis.
1:44 p.m. PST: Bottom line, there will be a Vertica appliance to compete with Exadata and other such offerings.
Back to Apotheker: HP is 5th largest IT security company in the world.
1:45 p.m. PST: Seek to integrate security and management portfolio.
1:47 p.m. PST: One size doesn't fit all. HP will package it's services and software to appeal to various markets.
1:48 p.m. PST: The packaging of services and hardware is something that Cisco has done a lot of with EMC and VMWare.
1:49 p.m. PST: Turns the conversation back to shareholder return -- it's an analyst meeting after all.
1:50 p.m. PST: The story he's told so far speaks to growth and HP's view on evolving markets. He hasn't specifically said much about how all this affects margins.
1:51 p.m. PST: The cloud he describes has some serious "value add", but there's no indication yet that buyers want that sort of value from their cloud systems.
1:52 p.m. PST: Back to the original tag line: Seamless, secure, context aware experiences. Seamless = webOS, Secure = its recent security acquisitions, and context aware = Vertica.
1:53 p.m. PST: As such, the presentation did more to explain a rationalization of current recent acquisitions than it did to point to where new acquisitions will be made.
1:54 p.m. PST: The WebOS focus is a brave one. If it doesn't work, it leaves HP with a huge low margin business that can't be leveraged into something more important.
1:57 p.m. PST: Security is relatively new focus for HP. Its purchases have been best of breed in nature, but those products have been extremely expensive to purchase and use. HP will have to bring those products down market to meet its vision.
2:00 p.m. PST: In terms of connectivity, it's game on with Cisco. The 3Com acquisition was more important than most realize as it includes some high end offerings in its H3C line that compete well with Cisco. Doesn't hurt that H3C is china based.
2:02 p.m. PST: HP's CFO Cathie Lesjak is trying to explain how margins will increase. Takes a swipe at Cisco -- says competitors are getting into low margin businesses like servers and desperately protecting high margin businesses like networking.
2:06 p.m. PST: All in all, it's going to be a tough road for HP to increase margins in servers and PCs. WebOS needs to catch on big for HP to bring value added anything to these devices. So far the app and developer count just doesn't support that happening. It was unfortunate that Apotheker didn't mention anything about recruiting new developers.
2:08 p.m. PST: Throughout the event, HP has used the image of an infant and austronaut split down the middle. They never explained it, and it's just spooky. That's it from the Yerba Buena Theater in SF.
THE PRESS CONFERENCE:
2:29 p.m. PST: Speaking of security -- He stresses that WebOS has security baked in. And that because of that, HP has the most secure stack. From device and OS, through to networking and servers.
HP's infrasture was not affected by the earth quake in japan. All HP employees are safe. Able to continue business as usual.
2:32 p.m. PST: HP had said it would partner Microsoft to create an Azure appliance
2:33 p.m. PST: Wouldn't commit to using Azure for HP's cloud offering, but stresses that platform as a service is a key offering for HP.
2:34 p.m. PST: Asked if HP was playing catch up to IBM in cloud computing. Apotheker disagrees with the premise of the question. Same for analytics
plans to deliver analytics as a service
2:35 p.m. PST:
and says no one is currently delivering a truly scalable system
2:36 p.m. PST: Says most of cloud infrastructure in the world already runs on HP - unfortunately doesn't give specifics on who he means
2:38 p.m. PST: Apotheker just said WebOS is "awesome AND cool", a true californian he is.
2:40 p.m. PST: Speaking to Oracle relationship -- says it's all about coopetion. Says HP will do whatever it has to do to keep joint Oracle and HP customers happy.
2:42 p.m. PST: Speaking HP's security offerings: point security systems won't cut it. need end to end security. Make one wonder if he wants to buy Symantec or just get users off Windows.
2:45 p.m. PST: Defending his strategy rollout - says its the first time anyone's tied all of HPs businesses together into a unified strategy. While that may be true, it's pretty loose coupling.
2:46 p.m. PST: Platform as a service seems to be the new major push for HP. Previous to today, they hadn't said they'd be in that business. Of course we have no details on what that service will look like.
2:50 p.m. PST:
Sees HPs ability to offer cloud services at scale as the key differentiator. World wide offerings and complete stacks.
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