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HP Spinning Off WebOS and Exiting Hardware Business
A number of readers submitted rumors about some announcements HP was set to make today. Now, the announcements have actually happened, and the news looks grim. For starters, they are exiting the tablet and phone market and repositioning webOS for use in appliances and vehicles. While confirming they are in talks to acquire Autonomy, they also announced they are considering exiting the PC hardware business entirely in order to focus on their software business.
www.hp.com/investor/2011q3webcast
Help stamp out iliturcy.
Judging by the amount of bloat-ware that's been coming with HP computers for the past several years, it would seem they've been practicing for this very moment.
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"According to one source who has seen internal HP reports, Best Buy has taken delivery of 270,000 TouchPads and has so far managed to sell only 25,000, or less than 10 percent of the units in its inventory."
http://allthingsd.com/20110816/ouchpad-best-buy-sitting-on-a-pile-of-unsold-hp-tablets/
Looking at their WebOS powered tablet at BestBuy next to the iPad2 and android units like the Galaxy Tab, all I can think is WTF, HP?
But thanks for buying my Palm shares.
I hope that HP will somehow weather the turbulence and emerge stronger than ever. This is the company that built Silicon Valley and for decades was the benchmark for tech innovation, and it's so painful to watch them floundering like this. And I'm especially saddened that WebOS never really had a chance to strut it's stuff. I'm a very happy iPad owner, but I have the greatest respect and admiration for what the Palm team accomplished with WebOS's interface, and I was hoping that it would take off and keep Apple on their toes.
I personally blame Carly Fiorina for the travails of a once-proud company.
Works like nothing.... well, just nothing.
What will Russell Brand do now?
"Waste not one watt!" - CZ
HP also reported that it plans to announce that its board of directors has authorized the exploration of strategic alternatives for its Personal Systems Group (PSG). HP will consider a broad range of options that may include, among others, a full or partial separation of PSG from HP through a spin-off or other transaction.
http://www.businesswire.com/news/home/20110818006301/en/HP-Confirms-Discussions-Autonomy-Corporation-plc-Business
Help stamp out iliturcy.
I thought this as well. Why on earth would you stop doing something that, according to TFA, counts as 1/3 of your revenue.
Looks to me like HP would be better off divesting itself of its CEO.
So HP is jettisoning all of the things that made it HP two years ago and just focusing on the stuff they got when they bought Palm? Does this sound like they are trying to blow up the company to anyone else?
I see nowhere in it that they are "considering exiting the PC hardware business."
HP says:
"HP also reported that it plans to announce that its board of directors has authorized the exploration of strategic alternatives for its Personal Systems Group (PSG). HP will consider a broad range of options that may include, among others, a full or partial separation of PSG from HP through a spin-off or other transaction."
http://www.businesswire.com/news/home/20110818006301/en/HP-Confirms-Discussions-Autonomy-Corporation-plc-Business
I'm sorry to see it go, but I'm not at all surprised. I was a release-day Palm Pre buyer (Sprint), and I LOVED WebOS, but Palm really blew it. If there were more apps and the hardware was better (and upgraded more regularly) I would probably have gone with WebOS over Android or iOS, but in the end they left me hanging with no decent upgrade path (the Pre was an okay first-gen device, but really needed a major followup at the one-year mark) and they just didn't attract the app developers (I mean the major developers, the indie devs were fantastic!). End result, I'm now a happy Android user (HTC Evo), but I still miss the great parts of WebOS (Cards, Konami-code to root, etc).
Well, I'll just keep hoping that some of that good stuff makes it to Android eventually. Last I heard that's where most of the WebOS team ended up.....
As for WebOS in vehicles....great, just what I need. People have enough crap that they play with instead of paying attention to the road, now they're going to be swiping through multiple cards on their in-dash systems looking for things while careening down the highway? Wonderful....
Some bring out the best in others, some the worst. Some bring out far more.
Same reason IBM did it. Lenovo is crowing now about a huge bump in profits - something like $100M on $5B, or 2 percent.
Help stamp out iliturcy.
apple makes most of the money in the PC market. HP and dell mostly sell the cheap no profit machines.
the original plan was to sell a variety of models with the low end models being loss leaders for the more expensive ones. but Apple stole the more expensive market and left the loss leader market to dell/hp.
So can I get a TouchPad for $100 now?
I try to think of HP as in the context of 'software business' but my mind stays blank. Am I missing something? I mean, quitting PC hardware for something I can't remember?
I wonder if patents had anything to do with it?
It sounds like its time to fire the CEO. They paid billions just a few months ago for WebOS from Palm and now have nothing to show for it. Either way that was a very expensive bad investment if you blow billions just to dump it a very short time later. If patents were that bad the CEO should have made sure their employees did a risk analysis and investigate this. I mean this is why you pay the employees right? Idiots
http://saveie6.com/
& death of HP-UX?
Just as well, judging by the latest HP laptop I've seen, they weren't very good at it.
[Insert pithy quote here]
It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
That 25,000 sales figure doesn't include customer returns for refunds, which anecdotally have been startlingly high. The TouchPad has been an unmitigated disaster for HP, and apparently Best Buy is extremely unhappy with the situation, demanding that HP take back unsold inventory.
hp hasn't been in the PC hardware business for quite some time. When they realized they could adopt the razor model with their printers they dropped their first core business like a hot potato and never looked back. They have never been a serious PC manufacturer despite all the PC's they managed to sell. I knew when they bought Palm WebOS was doomed just like when they bought Compaq.
"A person is smart. People are dumb, panicky dangerous animals and you know it." - K
Palm provided a hardware and software platform in its PDAs that defined the industry. They were the leaders early on, edging out Apple, Casio, and many others, and they maintained that lead for a very long time. Then they dropped the ball. They stopped innovating, and they failed at multiple attempts to define themselves, all the while other companies came in and took over the market that they had locked in. PalmOS ultimately evolved into WebOS, built up a devoted niche market, and now this.
I am a long-time PalmOS PDA user. I purchased the US Robotics Pilot 1000 the week after it was released, and I've owned many models since then (the Palm Vx being my favorite.) When the iPod Touch came out, I was intrigued, not so much for its capabilities (it actually had far fewer capabilities than PalmOS PDAs) but more because I say Apple rising in popularity due to the iPhone, and the developer and user following was propelling it forward very fast and hard. The iPod Touch 4G blows the doors off any PalmOS PDA I had, and frankly, I haven't looked back.
And yet, I always wonder what would have happened if Palm had taken a step back, re-assessed what it was doing, and charged ahead with innovation.
My mom always said, "Jim, you're 1 in a million." Given the current population, there are 7000 of me. God help us all!
HP has a software business? Besides bloatware on a new HP PC?
Seriously, name 5 software titles HP makes that a random computer user might know.
I really liked my Palm Pre. I would have replaced it if HP had released a comparible replacement, but the Pre 3 still isn't out and I had to get an android phone. My new phone has more apps, a better browser and better hardware, but I still think WebOS's multitasking paradigm was better.
I was really looking forward to the Pre3, I was thinking about moving from my Droid-1 to the Pre3 when it comes out, but I guess now I'll have to hold onto the Droid a little longer and see what comes out of the Google-Motorola deal.
Oh No! I won't be able to get horribly fragile laptops with absolute crap for support anymore. I have an HP laptop that I bought just over two years ago. It has been mailed back to them for service five times before the warranty expired. Three of those times, they entirely failed to fix the problem, cracked the screen, or didn't return the battery. Every time I have to call them up it is a painful experience talking to India. Contrast with my experience with apple: when I had a bad power supply on a two year old laptop, the guy at the apple store got a new one from a wrapped box and swapped it over the counter with absolutely no questions asked. There's a reason apple is running HP out of the harware market. They make better hardware, and they are actually pleasant to deal with when something does go wrong.
FTA: "...exploring a spinoff of its PC business"
That's entirely different. Summary blows.
There are already several companies selling Android tablets. What would HP have to bring to the table, that they don't? At least with WebOS they had an opportunity to do something different and better. My take is that they either should have committed more to WebOS or not bothered with "smartphone" tablet at all.
for the same reason Carly fired almost all of R&D, sold the itanium engineers to Intel, and considered getting out the printer market, despite those sales being the majority of their revenue: greed, short-sightedness, selfishness, and the desire to be seen in the news.
Will the Spinoff cover them?
This move by HP reminds me exactly of IBM's move to sell of their consumer computing line to Lenovo back in 2005. At the time the CEO made the prescient observation that the consumer hardware business is a low-margin, low-profit business, and indeed for IBM, they've made much more money operating as a software and services outfit (aside from their mainframe line and supercomputing hardware).
So this leaves Apple and Dell as the only large computer-hardware companies in the USA.
HP has been one of the worst PC manufacturers in the last 10 years (if not more). I have had a very low view of their PCs since the time they started selling thsose small towers with everything cramped in (about 10 years ago).
Ubuntu is an African word meaning 'I can't configure Debian'
Coulda woulda shoulda. Too late now.
Help stamp out iliturcy.
This is the company that built Silicon Valley and for decades was the benchmark for tech innovation, and it's so painful to watch them floundering like this.
No, that was Agilent, the test and measurement company.
We're talking about HP, the Printer/Business Services/Bottom-barrel PC company. Totally different.
Something is between lines. HP recently bought Palm for a lot of cash, announced new webos&devices and now they are ditching those devices. So why they were so confident on buying palm in the 1st place? Im afraid that the patent fight around mobile/portable devices will scale up a lot in the next few months.
apple makes most of the money in the PC market. HP and dell mostly sell the cheap no profit machines.
Which would you rather have? $100 each from one thousand people, or $1 each from one million people?
General Relativity: Space-time tells matter where to go; Matter tells space-time what shape to be.
You have to work really hard for that PC dollar. In desktop PCs Microsoft makes several times the profit dollars per unit than HP or Lenovo does. Lenovo's crowing about "huge" $100M profits on $5B sales right now- about 2 percent. That's a lot of work and risk for $100M profit to be a good thing. You could blow $100M just by, say, building an initial run of half a million tablets that don't sell.
Help stamp out iliturcy.
I've worked in managed hosting for more than a decade and HP servers have proven themselves over and over again. I see no mention of HP divesting themselves of their servers in TFA - anyone have any insights beyond the "well, its not in the article so its not on the table"?
"In the end, there is simply no weapon more devastating than the truth, delivered in just the right way." - tnk1
So, HP was an instrument company, started with an ingenious application of a light bulb no less. Then they became a computer company sort of by attrition, since they needed machines to control their instruments -- IIRC. Then servers came sort of naturally when they got to dabble with UNIX. Then the core instrument business got spun off as Agilent, pretty much tarring the name of Hewlett and Packard IMHO. Then the PC business gets spun off too. So what remains is servers? What the heck software is HP shipping that hasn't to do with their own hardware? It's becoming more and more of a joke to keep the same name. Their business got nothing to do with Hewlett nor Packard. They're turning in their graves. </rant>
A successful API design takes a mixture of software design and pedagogy.
Revenues != Profits. If the profits are terrible (i.e. they're just breaking even), then it might make sense to give up on that, or sell it to someone else who thinks they can do a better job with it, or is happy with low profits.
It's too bad, however, because even if a division isn't profitable, as long as it's breaking even (or slightly better), that's keeping a lot of people employed, and obviously it's keeping some customers happy too. But big companies want profit ueber alles, so just having good revenues and stability isn't enough for them, so they throw this away in search of something that has giant profits, which they may or may not find.
Interesting theory, except Apple is the market leader when you take into account all of it's PC and tablet sales and Apple has a health profit margin for hardware. I tend to think their profit margins are a bit more sane than 2%. Thin margins are great for consumers up front, assuming you don't get bargain basement parts throughout, but not good for long term business. Given that HP rank the poorest in hardware failures in the above linked PDF, HP is a good example of cutting your margins too thin. Being #1 is great, but unless it's profitable and has market recognition for ROI, it's an empty and valueless statistic.
They were just awarded a huge NASA contract to provide HARDWARE and desktop support (the old Lockheed ODIN contract)... Seems odd. http://www.hp.com/hpinfo/newsroom/press/2011/110428a.html
Since they are replacing all the Dells at NASA with HP (at HP's request when they started the contract) - why would they now be looking to get out of hardware?
I just see the last software designed by palm sinking. All which i have now as a memory is the port of graffiti as an input method for android.
Compaq
> they also announced they are considering exiting the PC hardware business entirely in order to focus on their software business.
Could it be... could this mean... that I will never again have to fix a customer's Pavilion?
Happy days are here again!
The skes above are clear again!
Let's sing a song of cheer again!
Happy days are here agaaaaaainnnnnnnn
But wait... doesn't that mean they'll sell existing stock at heavily discounted prices? Now I'm depressed again...
Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
Break out the champagne!
If it ain't broke, DON'T fix it.
during that same period of time?
At one point in the early days I was hopeful it would actually overtake Android. It was a great OS with some fantastic ideas, and it doesn't deserve the short run it had...
Perhaps Apple should buy the WebOS division for the patents... :-)
"There is more worth loving than we have strength to love." - Brian Jay Stanley
apple makes most of the money in the PC market. HP and dell mostly sell the cheap no profit machines.
Which would you rather have? $100 each from one thousand people, or $1 each from one million people?
In that scenario, or is it better to look at ACTUAL market share? 10.6% is pretty respectable. HP had 24.35% of the market, or say about two and a half times the sales in a quarter. Since Apple's margin is WAY higher (near 50%) and their average selling price is WAY higher, I would imagine the correct question is would you rather have $500 each from 2 million people or $25 each from 5 million people.
Oh wait, it didn't.
Old age and treachery almost always overcome youth and skill.
Which would you rather have? $100 each from one thousand people, or $1 each from one million people?
The former, clearly. Why would you want to have to make 3 orders of magnitude more sales to get only 1 order of magnitude more profit?
They could call the new company... Compaq!
Making fun of dumb people since 2009
that's keeping a lot of people employed
I obviously wasn't intending to talk about anything like this, but hey, you brought it up. :P So this statement you made is one that I see a lot of people making and I think it shows a disconnect between the understanding of what a profit actually means and what jobs are. You probably don't want to hear about it, but it bothers me, so deal.
A profit is far more than just making moneyIt shows that you are creating wealth. One of the fundamental law of economics is that trade creates wealth. By trading, you should end up with more than you gave up. When you can't make a profit, it shows that resources are being improperly allocated. If HP decides they suck at PCs and close down, that doesn't mean those jobs and resources are lost. It means they have to be reallocated. If HP sold 1,000,000 PCs a year, that doesn't mean there are 1,000,000 PCs less going to be purchased. A business staying around that doesn't make a profit is preventing those resources from being used by a company that can make better use of them and create more wealth. This creation of wealth is one of the biggest assets to the advancement of humanity and to encourage the opposite prevents progress from happening. The problem that a lot of people have, of course, is that the wealth ends up in the hands of the top and the elite, but this frustration should not be used to advocate the prevention of wealth creation. This is the result of very different causes.
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I personally blame Carly Fiorina for the travails of a once-proud company.
Good Lord, why?
I see people bitch about Fiorina all the time here, and most of it is unwarranted. She was pretty gruff with her underlings, and obviously wasn't much fun to work for (I guy I know that worked with HP at the time told me that there were literally celebrations in the halls when "Aunt Carly" resigned).
But give credit where credit is due. Much of the success Mark Hurd enjoyed while at HP was a direct result of decisions Fiorina made and didn't stick around long enough to take credit for, i.e. the purchase of Compaq. Everybody, including myself hated it when she did it, but after she was gone, suddenly, what a wise decision it was that HP made. Fiorina, who was the driving force behind the idea, gets no credit for her own brainchild. People just pretend it happend sponteneously or something, and that the merged companies just happened to fall in Mark Hurd's lap.
No, she's not pleasant to work for. Neither was Patton. But in hindsight, looking at the results, she got things done, at AT&T, Lucent, Agilent, and yes, HP. HP made money under Fiorina, and Mark Hurd made even more money, and he basically just carried out her business plan (leverage the larger merged PC business, get heavily into the services sector).
There were valid criticisms of the woman, some of them major... hell, I wouldn't want to work for her... but a lot of people spout crap about her when they really have no idea what they're talking about. Blame her for HP's current mess? She's been gone for years and left the company in good shape. How in the hell is HP's current woes her fault? "I blame Carly" has turned into a silly meme, joing the company of Microsoft conspiracy theories and "BSD is dead".
Life is hard, and the world is cruel
They have software? Well, apart from webos and driver software for their hardware?
These morons bought Compaq a few years ago for more money than the Chinese paid for the IBM PC business. Now they want to shut it down and focus on their software business. Of course, there is no real software business, but lets just ignore that. Bummer, since Toshiba laptops are crap and I don't know where I'm going to be able to buy my next PC laptop. No, I don't want to buy it from the Chinese and I don't want one with the damn post sticking up in the middle of the keyboard.
I'm an American. I love this country and the freedoms that we used to have.
....what RIM stock is selling for today?
* Closed at $25.76
* 52 wk low $21.60
* 52 wk high $70.54
* Market cap: $13.42B
Apple or Google could easily buy RIM with cash on hand.
That's not an exit though.
To what does "that" refer? "a ... partial separation of PSG from HP through a spin-off or other transaction" might not be considered an exit, but would you truly not consider "a full ... separation of PSG from HP through a spin-off or other transaction" not to be an exit?
WebOS is too tainted to rise again after this. It will likely only making a any return on investment by licensing the patents to Google.
Depends on how much is tied up to make it. If you profit margin is 2% and a certificate of deposit is 4%, than it makes sense to put that capital elsewhere. No where does it say how much capital is tied up making that 2%, however.
My first impulse is to say "good riddance." Using only my circle-of-free-tech-support-clients (ie, friends, family and a few women that... yeah, anyway...), in the past 4 or 5 years, they've been even worse than Dell, and that takes some doing...
OTOH, another part of me would like to know WHAT software business after they nuke the already horrid WebOS to go to "appliances and vehicles." Seriously?
Definitely $100 each from 1,000 people. It's less profit overall, but more hassle and more like a better return on investment. Better yet, $100 each from 10,000 people. You forget Apple is not miniscule compared to HP and Dell in PC revenues. It's probably about a third or more of the revenue that Dell and HP get and much greater profits. So yeah, HP would love to be Apple right now.
Some are saying that the Google buy of Motorola Mobility may have been a big factor in the decision to kill WebOS hardware. They can't afford to keep up with that level of investment against the iOS and Android ecosystems' dynamic synergy. Too hard for a third player to bootstrap here. I hope RIM is watching this. It's too late for Nokia to take this turn.
Help stamp out iliturcy.
That was meant to read "more likely a better return on investment".
How will this affect their OpenVMS hardware and software sales?
They did drop 1.2 Billion on Palm and not more than a month after the first attempt at a product launch, they killed it dead. I can appreciate not throwing good money after bad, but it does show they are kinda directionless and could very well completely give up on hardware even 5 months after throwing money at something like that (and 3com for that matter).
That said, I would say HP laptops/desktops will go away, but I doubt they'll leave server business. This is fantastic news for Dell and IBM though. IBM couldn't compete on total contracts and so now HP will be on even ground with them, and now Dell is the only one willing to play the total stack... for now. I would, however, be very concerned if I was in the HP server division. They mentioned explicitly leaving the PC business to focus on services (EDS) and software, but didn't say anything on servers explicitly. They may stay in, but it sounds like perhaps it's not their priority. Apothker did come from the software side, so...
XML is like violence. If it doesn't solve the problem, use more.
The WSJ article, among other news stories, makes it clear that HP is spinning off the PC division, i.e. selling it, not shutting it. Conversely, they aren't spinning off the WebOS/Palm division, they're killing it.
HP has already stolen market share from DELL because they have become so good at making PC's, the fact that they make little/no profit just means they are in a very competitive market. If HP stops making PC's then there will be fewer players in the market and so prices will rise and profits along with it, but that doesn't mean that anyone suddenly got better at making PC's only that the market is distorted by being closer to a monopoly. Remember that for classic economics to work you have to have a commodity product with many suppliers and zero barriers to entry.
There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
Everything about this seems a bit dramatic, misguided and haphazard. I have no doubt they would forfeit such a contract at this point on a weakly supported whim. The buisness leadership clearly thinks hardware=bad, software/services/good, and so expect for HP hardware to get the shaft until finally killed off.
Cisco, Dell and IBM have a lot of reason to celebrate today, regardless of whether the server business is tied up in this.
XML is like violence. If it doesn't solve the problem, use more.
OK, I will bite. If a big company goes under, it surely does not mean that the market contracts. So far we agree. But it does mean that redundancy is reduced. Why is that bad? Well, first of all it means the system is not robust to events like Fukushima. Less players means more concentrated business chain means more vulnerability to disruption. Second, elimination of redundancy means less competition. Which implies higher prices, less quality, and less service. So what we get is not necessarily that resources were mis-allocated. It could just be that temporary sentiment shift places less value on robust supply and overall competition. Markets have often been quite short-sited and this could be a manifestation of that. Finally, one less big company means one less lobbyist. The surviving players can now make sure their voice is not balanced out by another player pulling in their own direction.
Also, I am not sure I buy that trade creates wealth. If I have two people on an otherwise empty island and they are starving to death for lack of food, whether or not they trade their shirts makes no difference to their wealth and might even detract from it if you factor in the calories they expend in trading. Wealth comes from two places and two places only: new natural resource discoveries and improvements in efficiency (i.e. scientific, technological and business process discoveries). Trade can stimulate these two and that is the only way it can help create wealth. Trade can also be detrimental. The most detrimental is trade that leads to bubbles, that is when strong correlation patterns show in the trade.
This is just what IBM did with Lenovo, spin off the PC business to a (most likely) Asian partner. The partner has the headaches but gets to use the HP branding for as long as it makes sense.
Isn't HP the largest PC maker? That's going to be quite the boon for the rest of the manufacturers.
One has to wonder what the metrics and thresholds were for success. Honestly, given the uptake in the past few weeks, WebOS's position has been as positive as could be reasonably expected. Reviews that say WebOS is #2 in function to Android? That's fabulous. So why quit 10 steps out of the gate? If HP was in this for the long haul, they've terribly screwed up tactically. If they were looking for short-term results, they've terribly screwed up in their strategy. Any way you slide this, it's a failure of leadership, not market or technology.
I think not...(*poof*)
Because CEO's are paid bonuses according to how much they expect the company to grow. Shareholders expect the predicted growth to be at least linear if not exponential.
It makes sense to blow off an entire perfectly division in the style of a dark sci-fi movie, because of the belief that those staff could be redeployed somewhere more profitable elsewhere (not factoring in that some staff may make a complete career change, leave the industry, go back to university or take early retirement as a way of saying F.U.) Shareholders would cheer when layoffs were made, because it meant lower overheads for social security payments for at least one quarter.
Some companies expect each division to make at least 10% growth, otherwise staff in the entire division would be redeployed elsewhere. There was a belief that divisions grew like living beings (child - growing rapidly, still findings its way around, teenager - still growing, knows how and where to go, finding its way, adult - slower growth, but self-sufficient, aristocrat - stopped growing, but has influence over other groups). The latter stage was reached after successive hiring freezes and layoffs.
Vintage computer adverts: http://www.vintageadbrowser.com/computers-and-software-ads
There are still plenty of smaller PC Makers out there, Falcon Northwest comes to mind immediately. But in the big name PC World, pickings will get rather slim...
...in bed
I have never had one positive experience with HP. NEVER. From their printers which required insane drivers, the bloatware on their PCs, even the hardware seems like it was way overpriced compared to other big box manufacturers. When I was young and fixed computers in the neighbourhood I had far more problems with HPs than any other. Now the latest HP server we have at work takes minutes just to get past a BIOS screen, and it had a hardware failure in the RAID controller after a month.
Good Riddance!
Of course the downside is the software is something that is most hated about HP, and now they plan to make it their core business :S
I couldn't care less about Fiorina's personality, and frankly it has no bearing on the success of the company. By all accounts Steve Jobs is a complete asshole to work for, the proverbial boss from hell, but investors will forgive anything if he delivers results. Fiorina did not deliver, and the acquisition of Compaq was in my opinion a dramatic strategic mistake. The culture of engineering innovation at HP seemed to go out the window on her watch, and the company became a low-margin mass producer.
I've compared her before with Steve Ballmer of Microsoft. Both come from marketing backgrounds; when both assumed leadership of their respective companies engineers took a distant back seat; and investors rewarded both with flat stock prices in recognition of their inability to innovate and grow the business.
Agilent did not exist before 1999. Before that it was a division of HP, which created all the technology that Agilent now sells. Agilent was spun off from HP in 1999 in order to separate the test and measuring equipment business from the computer and peripherals divisions. Hewlett Packard is the single company most responsible for making Silicon Valley what it is.
Jeebus, did anyone here sign on to this gobbler?
A company spin off is a very, very different thing from simply closing down the PC factories and shredding the plans.
"Exiting the PC hardware business" sounds more like the latter, while if the former was meant, the normal phrasing would be "spinning off the PC Hardware business".
Technically "exiting the PC hardware business" could refer to spinning off a business, but that is not what jumps immediately to mind.
Stylish sheet to fix many problems in Slashdot's D3: https://gist.github.com/801524
I'm a little surprised more /.'ers aren't familiar with HP's software and services division. HP is considered to be one of the "Big 4" of enterprise infrastructure, service, and asset management, along with CA, BMC, and IBM. HP's acquisition of EDS strengthened their professional consulting position, and put them squarely in competition with IBM as their main software/services competitor.
Enterprise software is basically a license to print money. Companies and governments spend inordinate amounts of cash on the Big 4's closed-source software, enterprise license agreements, support contracts, and implementation services. If HP is anything like CA or IBM, they're making the vast majority of their money on enterprise software and services, and very little on PC's and devices. Spinning off or selling their PC / device manufacturing business made sense for IBM, and it makes sense for HP, especially in light of the consumer competition in that space. There simply isn't the same competition in the enterprise space, hence why the Big 4 can charge the inflated prices they do for their software and services.
Being #1 is great, but unless it's profitable and has market recognition for ROI, it's an empty and valueless statistic.
1. Collect Underpants
2. ???
3. Profit!
I thought this as well. Why on earth would you stop doing something that, according to TFA, counts as 1/3 of your revenue.
Because you're not making enough money at it to justify the management headaches.
Advice: on VPS providers
They'll buy the number 3 slot at 3% market share, with a net loss of $4 billion a year - because they dare not give up. Until they just don't have that kind of money to burn any more. Which will be sooner than you would believe possible.
Agree about RIM. I don't see them making a go of it.
How good the Windows Phone thing might be is irrelevant. Microsoft cannot force retail vendors to push the product on an unwilling public, and that's the end of that story. It is technologically impossible for Microsoft to make the thing wonderful enough to make it an aspirational product that the public demands from their retailer.
Help stamp out iliturcy.
A company spin off is a very, very different thing from simply closing down the PC factories and shredding the plans.
But both of them result in Hewlett-Packard no longer manufacturing personal computers, so I, at least, think of both of them as "HP exiting the PC business". Perhaps you don't, and perhaps some others don't, but perhaps some others do, e.g. Larry Dignan or IBM's CTO or the authors of this piece.
Where in the physorg.com link does it say they're going to stop making phones and tablets? It does say they are expanding where webOS can play (which has been talked about for a while), but I didn't see anything about stopping production on TouchPads & whatever they call their phones now. What am I missing?
You're missing the HP press release, which says
Yeah, but why?
Which would you rather have? $100 each from one thousand people, or $1 each from one million people?
If I had to do a similar amount of work for each transaction in both cases, I'll take $100 from 1000 people, please.
Your island example is bad. Shirts are valueless (or of equivalent value) in this context, so trading them doesn't create wealth.
Now if one half of the island had bird nests full of eggs, and the other had water, two people on the respective halves of your island could trade and both would have more wealth because on the bird side, plentiful food is worth LESS than the scant water and on the water side abundant water is worth LESS than the scarce eggs. Then trading is good for both parties, they both have more of what they most value than before. The sum of value across the island is higher, and thus there is more wealth.
If you don't like a resource example, one person could know how to weave hats and build boat hulls and the other could know how to weave nets and sails. Trade creates more wealth. This is extremely basic economic theory.
You are wrong about where wealth comes from. At the end of the day every manufacturing plant turns steel/glass/wire and plastic into a bunch of products worth more than the inputs. That directly creates wealth and it doesn't have anything to do with natural resource discoveries or improvements in efficiency. This is true at the craftsman level as well- working a bunch of reeds into a useful basket directly creates wealth - the basket is worth more than the reeds.
HP has already stolen market share from DELL because they have become so good at making PC's
Actually, HP clawed back some of the marketshare they lost to Dell in the PC business because the nature of the PC business changed dramatically over the past decade. From the mid-'90s until the middle of the last decade PC's were still pretty expensive, generally north of $1,000 a piece here in the US, and you could save a considerable amount of money by customizing your PC to sport only those features you really wanted. You could save even more by going mail order, potentially slashing the amount you paid in taxes and getting fresher inventory than the local CompUSA or Circuit City had in stock.
All of those factors favored Dell, with their customize online, custom build, mail order model. You could save a couple hundred bucks going with Dell and get just what you wanted. Unfortunately for Dell all of those factors have since changed. A decent PC can be had well south of $1,000 today - even laptops are cheaper than that now (and they've grown to dominate the market). Customization doesn't save you hundreds of dollars anymore - you can generally buy your way into a much better class of computer for just $200, complete with whatever features you were seeking and then some. Laptops don't have as many customization options, anyhow. And even the cheapest PCs ship with rich feature sets to begin with. The fact that PCs are so cheap also means there isn't much money to be saved in sales taxes by going mail order. And inventory at the few remaining PC retailers - mostly Staples, Costco and Best Buy - is amazingly fresh compared to the old days because there's so much turnover. Retail distribution favored HP and its enormous distribution network, established for their printers, over Dell's direct to the consumers model.
HP leaving the PC market opens an enormous opportunity for Apple to move into the enterprise space with their post-PC products.
If you read the article you linked, the deal was with HP Enterprise Systems. Today's news is about splitting or selling HP Personal Systems Group.
In the "mobile PC" segment, if you could iPads as PCs, Apple emerges as a clear winner. The CNet article states total PC sales as 19 million for the quarter - the link there says Apple sold a smidge over 10 million iPads in the same period, so Apple could certainly hold its own in an overall "PC" sales ranking.
Man who leaps off cliff jumps to conclusion.
First, about trade. Your example is of a good trade which stimulates usage of resources available and seeking out new ones. Notice that the trade was highly uncorrelated - different parties sold different goods and everything was demand driven. My point was that much of trade is correlated - where people buy inherently worthless or not quite so worthy trinkets because it is a fad (yes, including real estate a few years ago). This does not stimulate anything - yes, stuff is being produced to fulfill demand but demand is artificial and so the entire trade is unsustainable. The things it stimulates are not really needed and dissolve at first market crash. In that respect, trading shirts when the only demand is food is a good metaphor. this is what we were doing a few years back essentially. We need new sources of energy (new food so to speak) but we trade trinkets like houses which do not address the problem and do not stimulate dealing with the problem.
As far as where wealth comes from... Uh, do you know what went into making every single plant that makes stuff? Discoveries of how to make stuff and the natural resources. Nothing else. That is where wealth comes from. If no new discoveries are made, what will happen is that first every product will turn into a commodity with near zero margins, then when resources run out, the product will cease to be made. The plants are just a physical realization of research so you are making my point here. And for sure, plants have little to do with trade. Trade just connects supply and demand, it does not enable supply side and does not guarantee that demand is organic/sustainable. So healthy trade provides positive feedback for wealth creation, it even helps establish what wealth is in many cases but it is not responsible for wealth creation.
I am interested to see who acquires HP's PC business. It will most likely be a Asian company.
HP also said they were going to concentrate on printing, but...
People, including business people, are buying iPads.
They're carrying around iPhones and iPads stuffed to the gills with ebooks, textbooks, manuals, and reams of PDF documents. They're walking around with constant 3G access to the Internet and to corporate intranets. There have apps specifically designed for accessing corporate dashboards and information systems (Roambi). There are Wyse and Citrix apps.
So, given the above, does it strike ANYONE as being a particularly good time to concentrate on PRINTERS???
Any sect, cult, or religion will legislate its creed into law if it acquires the political power to do so.
printers with wifi (or 3G)... yes! ;D sometimes you just can't beat dead tree, and I'd like to be able to print from phone or ipad more easily
but I get where you're going :p
hand held wifi printers for travel etc would be good, but I guess thats not going to give you corporate-service-plan type monies
In fact, Dell is exactly the company that can sell WP 7 or 8, if they can get it on X-Scale. That can be their next X-Scale platform. Too much of acquisitions - Palm bought Be & Handspring, HP bought Palm and now HP wants to spin off Palm - no place for smaller companies anymore.
Thankfully, MIPS as a company is still alive and available to anyone for whom ARM is inadequate. And Oracle still supports UltraSparc. IBM supports Power7 - now into the 7th generation, if not more, and Power is also an openly published architecture, if any chipmaker wants to build other Power microprocessors. One can still build Power based workstations if one wants to. Only causalities were Alpha and PA-RISC. Alpha was dead the day Microsoft pulled NT from it, since they were never the biggest Unix player - those were Sun, HP and IBM. MIPS lost once SGI went under, but still survives thanks to routers and Nintendo: however, their processor is competitive w/ ARM on power consumption, and capable of supporting Android. They also are 64-bit, which ARM ain't, should that be needed by, say, Microsoft for WP 8 & beyond. Since NT did exist previously for MIPS, Microsoft could port Windows 8 or WP 8 to that platform, if they needed a complete solution w/ which to challenge others. In any case, Itanium is not far from swimming w/ the fishes. Then the only platforms left will be ARM, x64, Power (used by X-box), MIPS and Sparc. The first 2 - no questioning their continued success. Both Power & MIPS can find niches in the tablet market, while once Itanium dies, Oracle can position Sparc against IBM for enterprise servers. Essentially, leaving HP irrelevant in this space
At some point, Intel will itself have to drop Itanium, and once it does, HP/UX is dead, unless they resurrect PA-RISC. And OVMS? I never got the point of porting it to Itanium - would have made more sense for HP/Compaq to have kept Alphastations and Alphaservers around for that OS alone. Summary - all 3 of the above are essentially dead!
I don't see how HP can overtake IBM in the SAP arena - IBM is pretty much emperor here as far as hardware goes.
Just as well, judging by the latest HP laptop I've seen, they weren't very good at it. I won't argue your point because you are right. However, HP makes one of the finest laser printers on the market. HP was one of the first hardware companies that worked with Linux OOTB. The firmware was there with it as well. Good to note that Samsung and a couple other printer manufacturers have followed suit, but I'll miss my little 75.00 B&W laser printers that last for years and years.
Windows assumes you are an idiot...Linux demands proof.
Or Westinghouse. Or Kodak.
A profit is far more than just making moneyIt shows that you are creating wealth.
Not true. "Pay us 10% everything or we'll torch your shop in the middle of the night" can be very profitable but creates no wealth. "Oh look, I just grew a banana. I'm feeling charitable, so why don't you have it" is unprofitable but creates wealth. That wealth creation goes hand in hand with profits is an assumption in many theories but it does not always hold in practice.
Can anyone tell me what this thing actually does?? http://www.autonomy.com/content/Products/products-idol-server/index.en.html HP offered to buy this company, which for all appearances, serves a great purpose: Enterpriseyness
Seriously, what the eff do they do? It reads like they invented AI, but I think I would have heard about that. If HP is serious about this company, I think someone at the top is enforcing a new mass hysteria policy.. Either that, or I am just seriously too dumb for this Autonomy company who is clearly the "market leader" as their quote banner says (in what market again??)..
"Itanium" was originally HP's internal replacement for PA-RISC, to leapfrog the next generation of RISC processors in performance. The deal with Intel was intended to split development cost, so the competition couldn't keep up (HP already stopped making expensive fabs, hiring Intel to make PA-RISC). Management changes in both companies led to Itanium being handled by people who didn't understand the original strategy, or the technology, so it was "redesigned to death" until competitors caught up, and it was finally released.
It was a gamble by HP that static program analysis with simpler circuitry would be faster than dynamic analysis, in the same way that simpler RISC outperformed CISC, but it didn't pay off. It turns out that dynamic analysis became such a small percentage of the transistor count that it no longer mattered. RISC processors create their own VLIW instruction bundles (at least the last Alpha and later POWER did), and CISC processors can translate code on the fly internally with almost no speed penalty. I think even the most recent Itaniums ignore the static information and regroup dynamically for better performance.
Still, Itanium is among the top performers for number crunching, and if it had kept to its original plan, probably would have been a leader for at least a few years, which would have been great for HP. As it is, the main accomplishment was strategic - to convince most competitors to stop developing their high end CPUs (Alpha, MIPS).
The fact that bad trades and unstable market bubbles happen doesn't negate the value of trade. People do stupid things sometimes. Sometimes large groups of people do stupid things..
The stimulation for dealing with a problem like a need for new sources of energy is the increase in cost of the old sources. You appear to think it would be better to have a top down directed system where people are told what to produce based on your determination of the relative value, but I think it works better when people make their own decisions based on their perception of value (google "invisible hand") If people want trinkets more than fuel, they should buy trinkets. If you want fuel more than trinkets, spend your money on fuel - that demand will stimulate production.
You are completely ignoring the time and capital investment required to make production facilities. This is known as "barrier to entry" and prevents the rapid commoditization of many products. You are also assuming an asymptotic endpoint of zero-margin production while discounting the wealth that can be accumulated before that endpoint is reached. My wealth point has nothing to do with trade - it was to address your statement
"Wealth comes from two places and two places only: new natural resource discoveries and improvements in efficiency (i.e. scientific, technological and business process discoveries)."
Which totally discounts work, skill and time. Piano tuners don't have any discoveries, or consume natural resources, yet they create wealth by the hour. The service economy runs almost entirely outside of your overly narrow wealth creation definition. Since it is the largest component to the US GDP, I think you've missed something important and should rethink it.
Did I get it right? You are sad that WebOS didn't make it. But it's a happy iPad owner.
For me this is like "To bad he died, oh if I could just hold my finger and not have pulled the trigger..." If you wanted WebOS to have a chance why in hell didn't you bought a TouchPad? You are part of the market that said NO to WebOS so don't be sorry for it.
Here I go breaking my rule not to reply to Anonymous Cowards...
Yes, I am sad that an interesting interface idea didn't get a chance to show off to the general public the talents of the engineering team. What does the fact that I'm happy with my iPad have anything to do with it? Are you such a partisan jackass that you think because I own one it somehow disqualifies me from appreciating the good points of a rival device? By your pathetic rationale Nikon owners should be prohibited from saying good things about Canon cameras.
Are you such a purblind, hidebound fool that you believe that for something to succeed something else must fail? The very concept that other people have differing opinions is obviously a shock to a deep thinker such as yourself.
Are you such a narrow-minded simpleton that you believe that my owning an iPad doomed the TouchPad to irrelevance? HP didn't need my help; they did it themselves when they released a half-baked tablet and expected people to buy them.
For your information I didn't even buy my iPad; it was a gift. For your further information, I received it before the TouchPad was even announced, so it would have taken some sophisticated time-traveling gymnastics to have chosen one instead. For your further consideration, while I appreciate the interface, all reviews I read about the TouchPad stated that it was an unfinished product, and I don't know about you, but I don't have money to waste on a device that I am reasonably certain beforehand will probably disappoint me, just because I like the interface. There are others, but these are the main reasons why I "didn't bought one".
Fucking idiot.
Piano tuners create no wealth. They are much like a stable cell in your body: they do something and consume some resources but they do not contribute to the growth of your body. When you grow from baby to adult, that growth fundamentally comes from the nutrients you ingest (new natural resources) - nothing in your body generates growth without new resources. And conversely, take away new resources and the body wastes away (go see some concentration camp pictures circa WW2). Likewise, society only grows when new resources become available or new ways to use resources are found (kind of like human survival improved after a mutation which allowed people to process lactose and hence drink milk).
You might understand this from a different perspective. How many piano tuners does a society have? Well, there is some market size for that niche. What determines the niche size? Global economy. What determines the size of the global economy? Certainly not the size of the niches otherwise we'd be back to circular reasoning. So what is it? Well, we know many economies that collapsed due to internal contradictions so that can set the size of the economy. But the maximum achievable size is set by resource availability.
Now as far as planned vs market economies - I did not pass judgement on either. Market economies are susceptible to bubbles while centralized economies are susceptible to corruption, poor decision making due to power struggles in the bureaucracy, and hubris of top managers. So no, centralized economies do not look good by comparison. Quit putting words in my mouth. My point was simply that trade is not an inherently good thing.
One more thing: It is possible for human labor to contribute to economic growth but only if the worker was not adequately compensated. So in the extreme case, if you take a grown man and stop feeding him while demanding work then anything he will do until he dies is indeed pure growth of the economy. However, assuming efficient labor market and fair compensation, commodity labor does not create wealth. And the only reason non-commodity labor like research generates wealth is that it is never fairly compensated for (you just cannot fairly compensate the inventor of the wheel with all the resources of stone age economy).
Sure, spinning off a company looks like exiting a market to wall street, but to the consumer it looks like "HP is now known as XYZZY Corp."
In the short term, the only difference consumers will notice is the new name-tag and website.
That is very different from buying a system, and then when you go to get support, you find out that no support is offered anymore, and that the warranties are now honored only by refunding the purchase price. That is also known as exiting a market, and is an entirely different beast.
Stylish sheet to fix many problems in Slashdot's D3: https://gist.github.com/801524
Not to mention the fact that for the most part we've stopped printing photos. Photos now appear instantly on Facebook, are shared on Flickr, and are synced to our phone and tablets.
Any sect, cult, or religion will legislate its creed into law if it acquires the political power to do so.
If HP decides they suck at PCs and close down, that doesn't mean those jobs and resources are lost. It means they have to be reallocated.
This sort of abstract economics bugs me. Yes in theory in a perfect world and a closed system with perfect frictionless economics you might be right. In practice, the system is not closed and not frictionless. When those jobs go they a) may exit the closed system (eg: disappear from the US and appear in China, India or elsewhere) or b) if they do reappear there may be a tremendous cost associated with that (people losing jobs, defaulting on their loans, marriages breaking up, children scarred by trauma of financial hardship ...). There's no fundamental law that guarantees the net positives will outweigh the net negatives of any given event like this that happens. You can have your theory about the general market and how overall it moves humanity forward and also an opinion that an individual transaction is destructive and a net negative and be totally consistent.
If I was that crazy i could just buy an overpriced Sony and flush the other thousand down the crapper.
I'm an American. I love this country and the freedoms that we used to have.