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Why HP Should Sell Its PC Business To Save It

Posted by ryuzaki0 on from the anywhere-but-here dept.

packetrat writes "Hewlett Packard may not be in danger as a company, but its future in the PC business is in doubt, thanks to former CEO Leo Apotheker's maneuvers to turn HP into IBM. This article at Ars says Meg Whitman should go ahead and sell off the PC business — mostly because HP's management is so inept, it would likely do better without them. Agilent seems to be doing okay since it was spun off in 1999, but HP may have spun off its soul in the process."

26 of 221 comments (clear)

  1. To maximize shareholder value... by RocketRabbit · · Score: 4, Interesting

    They should just concentrate on the one really profitable thing they do - making ink.

    Or they should just sell off their assets, and then pay the shareholders off.

    1. Re:To maximize shareholder value... by Rhodri+Mawr · · Score: 2

      The phrase you were looking for was "I couldn't care less..." not "I could care less..."

    2. Re:To maximize shareholder value... by Man+On+Pink+Corner · · Score: 3, Funny

      Hopefully, as much as anyone hates Apple, they'll be the only american company left that knows how to build a PC.

      Relevant

    3. Re:To maximize shareholder value... by lucm · · Score: 2

      > they are worth 10 times HP even though they move 10 times less PCs

      You talk about crunching numbers but maybe your calculator is broken. Apple market cap may be 10x bigger but it does not mean the company is "worth" 10x more. It just means that people are comfortable paying a lot of money for stock that has a book per share value of 20% (compared to +70% for HP).

      If you want to use "market cap" and "value" as synonyms, basically you can only talk about Berkshire-Hathaway (Warren Buffet) because it's the only company that steadily trade at its real value.

      --
      lucm, indeed.
    4. Re:To maximize shareholder value... by hairyfeet · · Score: 2

      You wanna know what is sad? They have what I consider the perfect "housewife PC" and have NO DAMNED CLUE on how to market the thing!

      It is a sweet little AMD Brazos E-350 based all in one PC. Its thin, light, sleek, built in Wireless G, DVD burner, 6 USB ports along with gigabit ethernet...it is a damned sweet little Internet box built into a nice 1600x900 20 inch screen. Tigerdirect has been selling them for like $300 and after playing with a couple of them i picked up for customers? They are PERFECT for your average mom type! The Radeon 6310 is just the right size for Farmville and all those other Zynga games as well as DVD watching, its is quiet as a churchmouse, thin enough you can set that baby up anywhere, for the modern wireless family this is the most perfect "mom PC" I've seen.

      So are the marketing it? nope last HP ads I've seen are all pushing that Dr Dre sound system bullshit. Protip: Guys that actually give a fuck about sound DON'T USE ONBOARD LAPTOP CRAP they use USB or Firewire based offboard units. And the guys that listen to Dr Dre don't strike me as the $1000 laptop types.

      So I have to agree that TFA nails it...HP is too far gone to right the ship without a REAL CEO that can kick ass and take names. it is common knowledge that Jobs was a tyrant and didn't take no shit when it came to his vision, and THAT is what they need, someone who'll tell the board to STFU and focus on marketing really sweet products like those Brazos mom PCs.

      Frankly I don't know which one is worse to watch, HP trying to commit Hari Kari or watching MSFT try their damnedest to torpedo the company with one REALLY stupid fucking idea after another, like killing playsforsure, Zune, Kin, and the "step in front of a bus" Darwin award for their totally dumbshit idea of putting "Windows" on ARM and calling it Windows? Didn't they learn anything from New Coke? I swear it is like all these CEOs have lost their damned minds.

      --
      ACs don't waste your time replying, your posts are never seen by me.
    5. Re:To maximize shareholder value... by Doctor+Memory · · Score: 2

      That might work for the Best Buy crowd, but don't forget that HP's real target market is the business sector. There, you really do need separate sub-brands (can't have secretaries using the same machines as the sales guys, y'know!) Dell does a decent job with this (e.g. their "Vostro", "Latitude" and "Precision" lines).

      --
      Just junk food for thought...
  2. HP Didn't Spin Off Its Soul by 14erCleaner · · Score: 5, Insightful

    It's soul was eaten by Carly.

    --
    Have you read my blog lately?
    1. Re:HP Didn't Spin Off Its Soul by inviolet · · Score: 5, Insightful

      It's soul was eaten by Carly.

      Some will consider you flippant or flamebait, but I think you've spoke more truth than you'll get credit for. The leader's personality percolates and pervades through an organization, driving out (directly and indirectly) those not orthogonal to it. HP had a different personality after her tenure than it did before.

      --
      FATMOUSE + YOU = FATMOUSE
    2. Re:HP Didn't Spin Off Its Soul by LWATCDR · · Score: 2

      Someone should write a paper or a book about the destruction of American business by the MBA.
      Really is it logical that a computer companies top person isn't an EE?
      Is it logical that a software companies top person isn't a programmer?
      Is it logical that a car companies top person isn't a automotive engineer?

      At some point we have let the clerical staff take over the nation.

      --
      See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
    3. Re:HP Didn't Spin Off Its Soul by inviolet · · Score: 5, Interesting

      Someone should write a paper or a book about the destruction of American business by the MBA.

      My brother could contribute to the project. He was a pedigreed professor of finance who could teach anywhere he chose. After a few years he was offered tenure. He realized then that his job had become the mass-production of MBAs, very very few of whom were at all receptive to the most crucial idea he tried to impart to them: you should make money, not merely get money.

      Seeing then that the fruit of his labors were ruining our society, he quit to start over becoming a EE. I admire him for that.

      --
      FATMOUSE + YOU = FATMOUSE
    4. Re:HP Didn't Spin Off Its Soul by JaredOfEuropa · · Score: 4, Informative

      That book exists: "Managers, not MBAs", by Henry Mintzberg. Well worth a read... and rather than a baseless rant, it's a well-argued book written by someone in the know.

      --
      If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
    5. Re:HP Didn't Spin Off Its Soul by uniquename72 · · Score: 4, Interesting

      Someone should write a paper or a book about the destruction of American business by the MBA.

      I'd read this book, and hope one of the case studies would be about Border Books, a fantastic company of the '80s and early '90s. Then the creators and early executives left and the whole board was taken over by MBAs who had never worked in a bookstore, had no idea why Borders was superior to (or even different from) Barnes & Noble, and didn't understand anything about how the internet was changing retail.

      Then the company died.

  3. Who cares and why? by couchslug · · Score: 2

    Good HP is long dead.

    New HP deserves death.

    None of this is news.

    --
    "This post is an artistic work of fiction and falsehood. Only a fool would take anything posted here as fact."
    1. Re:Who cares and why? by MozeeToby · · Score: 2

      It's like someone who got blasted with a couple Sieverts worth of radiation all at once. They're sick for a while, then everything seems to get better for a while, but everyone knows it won't be long until their hemorrhaging out every orifice and on the way to being dead. Seriously though, when did the exposure occur? What, if anything, was the event that signaled HP's eventual demise as the company we know today? I think most of us agree that it's going to happen, I'm just curious what the point of no return was.

    2. Re:Who cares and why? by syousef · · Score: 2

      New HP deserves death.

      As an HP employee, I guess I should er, thanks I guess?

      No seriously, why does "New HP" deserve to die? We still do some pretty cool things.

      Crippling inkjets and holding the ink to ransom is not cool dude. Die, you evil turkeys! Die!!!

      --
      These posts express my own personal views, not those of my employer
    3. Re:Who cares and why? by jd · · Score: 2

      I'm not certain on that. HP produced a pluggable hierarchical scheduler for Linux and a clustering patch. Neither were adopted. Neither were even that widely used. If there's more than a dozen Slashdot readers who even knew these products existed, I'd be amazed.

      I'm not saying the contributions were poor. Quite the opposite. I liked their scheduler patch. It was absolutely wonderful if you wanted to do any kind of research into the dynamics of that part of kernel operations. The potential for teaching OS theory was obvious. It also meant you could tweak the dynamics to suit the workloads.

      What I am saying is that if HP produced a whole bunch of patches almost nobody knew existed, almost nobody is going to miss them not being there.

      --
      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)
    4. Re:Who cares and why? by Chrisje · · Score: 2

      Eh,

      I don't get that. Now you're glorifying things without looking at past failures and current successes.

      Firstly, HP's NetServer products, for those that remember, were a complete failure when compared to Compaq's ProLiant Servers, and after the merge we rightfully went with that line of servers. If you then look at the current C-class blade product line and the attached Flexfabric stuff, you'll have to agree that it is, in your words, exquisitely engineered stuff.

      You're going on about a printer, but if you then look at what a printer used to cost versus what you buy now for a couple of dollars, yes, the ink is expensive in comparison, but that's only because the device doesn't cost you anything anymore. The same can be said for lasers. In the 80's, the average private person couldn't afford a laser printer for the home, whereas now I can buy color laser for the same price a consumer inkjet with no frills cost me in 1993.

      Now HP's line of ProCurve Switches were hot shit back in the day, but they never went anywhere commercially. So we had very well-engineered network infrastructure for sale that never went anywhere for the longest time. Same goes for Storage devices (Marathon, anyone?).

      Having said all that, the market and economy of scale have changed. For all players in the market. You don't solder together a PC in your garage anymore. You move millions of products all over the globe at a breakneck pace and with 4 hr response on breakdowns, sometimes even 6 hr to fix contracts.

      With those constraints in mind, I don't think HP is doing that badly.

  4. HP's management seems confused by msobkow · · Score: 2

    If you still have to ask the question of what to do with the PC business despite being the market leader globally in PC sales, then get out now and sell the division to someone who cares.

    Yeah, if the global market leader isn't sure about the business, then they really should sell it to someone who actually cares about the business and will grow it. Indecisive waffling is not good for any business.

    HP hardware is not what it used to be anyhow. Noisiest freakn' servers on the planet. You'd swear they go out of their way to find extra-noisy turbo-whine fans for their rack mount hardware.

    --
    I do not fail; I succeed at finding out what does not work.
  5. Didnt work out well for IBM's products by sethstorm · · Score: 4, Interesting

    After IBM PCD was sold off to Lenovo, the quality has decreased.

    Their well-known Thinkpad product line transitioned from a no compromise option to a lesser product. First, the high-quality Flexview displays went. Next was any non-widescreen display, followed by the split into the current models seen today. In trying to globalize a US brand, they killed what made the Thinkpads unique - being able to pay a good amount of money, and get a no-nonsense, no-compromise product.

    As for HP:
    The damage at HP was done during Fiorina's time. You want to blame anyone, you pin it on her. Not Hurd, or Apotheker.

    Engineering a product for the Third World and then simply changing the product manuals/power plugs for the First World always results in an inferior product. Selling it off to an interest in the Third World guarantees this outcome.

    --
    Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
    1. Re:Didnt work out well for IBM's products by subreality · · Score: 2

      You burn the recovery DVD from the recovery partition. If you blew it away, you can buy the physical media for a few bucks. The exact part number depends on the exact version and language you need: Linky.

      ... And I know this because Lenovo has the same part number lookup system that they inherited from IBM, so it only took me a minute to find. They're pretty good about documenting this stuff. If the tech support monkey couldn't find it you either couldn't express your request in English or you started shouting "fuck lenovo I'm buying a mac" on the phone and they gave up trying to help you.

      I say all this as someone who's pretty familiar with the insides of ThinkPads, Latitudes, Evo N (HP/Compaq before the Probooks and Elitebooks), and MacBooks:

      ThinkPads are still about as good as it comes for a solid corporate laptop. Aside from being sturdy, they're serviceable. Just as an example: when you need to fix something, get a copy of the Hardware Maintenance Manual, and you'll get detailed procedures on how to do it, and all the part numbers for replacements.

      Have fun with that MacBook. Apple won't tell you how to open it. People make howtos and then don't label them with which exact models it applies to. When you eventually find one, good luck prying the stupid case open without damaging it... those clips are a bitch, you'll bend the trim, and it'll never go back together quite right. And you'll have to do that every time you want to change any part, be it the hard drive (not in a sled), the LCD (screws that can't be removed without unbolting the hinges from inside the main body), unjam the DVD (ah, slot-loaders), or repair the lid-latch.

      Apple doesn't patronize their users.

      Yeah... Keep telling yourself that while you're waiting at the Genius Bar after you've realized those things are too much of a pain to fix it yourself and you'd rather pay the temple a couple hundred bucks to do it for you.

    2. Re:Didnt work out well for IBM's products by yarbo · · Score: 2

      The clit mouse? http://xkcd.com/243/

  6. perfect match by tverbeek · · Score: 4, Funny

    HP and Netflix really ought to merge. After spinning off the PC division.

    --
    http://alternatives.rzero.com/
  7. It's not that they lack vision by symbolset · · Score: 4, Insightful

    In the PC space there is no road to real innovation. Operating margins are 5 percent at best, in a good year. You cannot differentiate with your prime products because another company owns the entire user experience. One failed product and you've left the shareholders with no profits at all. And if you experiment with new ways of doing things like Android on ARM Microsoft is going to pull your co-marketing dollars and leave you with no profits at all and no hope of getting any. The path is really just not there.

    Apple did it, but look how: they built their own brand and earned a brand premium through differentiation and outstanding design. With those premiums they invested in innovation without being sucked into the trap of surrendering the user experience. With each new thing they could charge more and better premiums until they could reach escape velocity with an ecosystem that's uniquely theirs.

    No PC OEM can pull that off without letting go of those no-margin PC revenues. No doubt it's a tough sell to the shareholders and the board. But it's the right thing to do. Ultimately HP cut the chains it or we'll get our innovation from new players like Samsung, HTC and so on rather than traditional PC OEMs. We've seen the future, and it ain't this.

    --
    Help stamp out iliturcy.
    1. Re:It's not that they lack vision by plover · · Score: 2

      HP used to innovate. Not that their engineers are even allowed to today, but once upon a time they were creative.

      If they haven't driven every competent person from their payroll already, there might still be some people who could come up with ideas that would improve their products. If not, they could try exclusively licensing some creative patents that are already out there, in hopes of building up some market differentiators. Projectors built into laptop screens. Trackpads that don't suck. Specialty embedded systems like car computers that use your home's wifi in your garage to sync your contacts and music, because $(deity) knows Microsoft's SYNC is filled with fail. Silent computing solutions. There are tons of places where HP could step up and create a market for themselves.

      The thing is they're still big enough to be a leader in innovation, but I don't think HP will let itself innovate anymore. I think they've "managed risk" to the point where they instruct their employees how to wipe their asses to avoid contaminating the toilet paper dispensers. The best thing that could happen to them is a complete house cleaning, starting with the top and scouring down to every middle manager who begins a sentence with "we need to define a process to..."

      --
      John
  8. Agilent is not exactly a beacon... by Moof123 · · Score: 2

    I'd hardly say that Agilent is a good example to raise. They are seriously mismanaged, and simply are tied to a business with a much longer product cycle. It has taken more years for them to reach the same level of apparent rot, but only because instruments have a 10-20 product life, while computers have a 0.5-1 year product life. Agilent has had to resort to re-badging their PXI instruments from their rivals (i.e. they buy their PXI 26.5 GHz spectrum analyzer from Phase Matrix, who is now owned by National Instruments). The place has driven off or laid off most of its key talent. Agilent is a festering hulk, it it just not quite as bad as HP is.

  9. Memristors? by msobkow · · Score: 2

    I wonder if HP has dreams of patent riches from Memristors?

    http://www.theregister.co.uk/2011/10/10/memristor_in_18_months/

    Interesting technology, that.

    --
    I do not fail; I succeed at finding out what does not work.