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HP Plans To Cut Product Lines; Company Turnaround In 2016

Posted by Soulskill on from the just-what-investors-like-to-hear dept.

dcblogs writes "Hewlett-Packard CEO Meg Whitman told financial analysts today that it will take until 2016 to turn the company around. Surprisingly, Whitman put some of the blame for the company's woes on its IT systems, which she said have hurt its internal operations. To fix its IT problems, Whitman said the company is adopting Salesforce and HR system Workday. The company also plans to cut product lines. It said it makes 2,100 different laser printers alone; it wants to reduce that by half. 'In every business we're going to benefit from focusing on a smaller number of offerings that we can invest in and really make matter,' said Whitman."

22 of 184 comments (clear)

  1. zuh? by bananaquackmoo · · Score: 3, Insightful

    0_o 2100 laser printers? WHY?

    1. Re:zuh? by Lonewolf666 · · Score: 5, Insightful

      I don't get it either. A dozen models for each market segment should provide variety enough, methinks. So
      -a dozen models for the SOHO market
      -a dozen for the bigger ones that may serve as department printers (one per corridor and shared by everyone
      -a dozen for oversize formats, so the CAD guys can print out big schematics
      -a dozen really fast models for high volume printing...
      . ...now I'm at about 50 models and running out of ideas. Maybe I'm a bit of an ignoramus, but I doubt I've just missed 95% of the market :-o

      --
      C - the footgun of programming languages
    2. Re:zuh? by fuzzyfuzzyfungus · · Score: 4, Funny

      Their firmware and driver teams need adequate room in which to explore the wide variety of vexing bugs that you can get away with shipping...

    3. Re:zuh? by P-niiice · · Score: 5, Insightful

      A lot of times, sellers willl request a custom model of a product - like a super-cheap model to draw people into a sale for example. These models usually vary slightly from an existing model (maybe it prints slightly slower or has a different paper tray). apparently HP has let these get out of hand.

    4. Re:zuh? by vlm · · Score: 4, Interesting

      10 middlemen retailers all with a policy "we will pricematch any competitors price for the identical model". Well, if walmart is the only retailer on the planet who sells model 13513.2362 then I guess they'll never have to pricematch, will they?

      Also add some B+W only models, some multifunction models...

      --
      "Science flies us to the moon. Religion flies us into buildings." - Victor Stenger
    5. Re:zuh? by SuperMooCow · · Score: 4, Funny

      PC LOAD LETTER? What the fuck does that mean?

    6. Re:zuh? by jimicus · · Score: 4, Insightful

      Let us take a fictional model as an example. We'll call it the laser jet 200.

      We have:
      Laser jet 200: plain printer.
      Laser jet 200n: exactly the same as the 200 but with inbuilt networking. Only it's sold as a separate model, which means you need to find space in the warehouse for two almost identical pritnters.
      Laser jet 200dn: exactly the same as the 200n but comes with the optional duplex unit pre-fitted. Three almost identical printers in the warehouse.
      Laser jet 200dtn: as dn but with the optional extra paper tray in the box. Four almos identical printers in the warehouse. By now, inventory's a pig. What if you suddenly find nobody wants the dtn model but the dn model sells like hot cakes? You have a warehouse full of printers that nobody wants and the aggravating thing is each printer is 5 minutes work away from being turned into one everybody wants.
      Laser jet 200 MFP: printer is identical to the 200 but a scanner is bolted on top to make it a multi function unit.
      Laser jet 200 MFP(f): Now they've fitted a modem to give it fax capabilities.
      Laser jet 200 MFP(f) Special Edition: A 200 dtn with scanner unit and modem fitted at the factory.

      Repeat for a printer aimed at small workgroups, larger workgroups and big departments. Repeat again for colour printers aimed at groups of varying size.

    7. Re:zuh? by jimicus · · Score: 3, Interesting

      WTF were they thinking?

      This sort of mess doesn't happen as a result of careful planning. It happens as a result of shortsighted knee-jerk management decisions. Those management decisions probably work out OK in a strong economy, particularly if you are able to predict how many of each model you'll sell.

      The problem arises when you face a downturn. You've got an entire chain from building through to distribution devised around this idea of shipping 2,000 different printers (with, let's say 50 basic printers and 40 variants on each one). Which means your driver team is put together based on that assumption, your factories are tooled up based on that assumption, your warehouse processes are based around that assumption and your management team is built around that assumption.

      It'd make far more sense to have maybe 10 or 15 basic printers and a whole lot of optional extras - which is precisely what everyone else in the industry does. But in order to get your processes down to that level, you need to drastically cut staff, warehouse space, re-engineer your factories (or pay your contract manufacturers to do so) - and in so doing, an awful lot of middle managers who have been merrily building up their own little empire will push back. They won't do so obviously - well, some might but they can be dealt with very easily - they'll do so insidiously. Terrified for their own job, they'll do everything in their power to avoid making any change that might ultimately mean their team (and hence their empire) is no longer needed.

      You really need someone at the top who has the strength to push through this sort of mess and sort it all out - you can't trust the entire business to work with you to achieve it because in so many people's case, it goes against their best interests. Even then it's famously difficult to get right - there is a damn good reason why people who've succeeded in turning around massive companies are greatly respected, and it's nothing to do with their enormous salary.

  2. HP doesn't need a long-term vision by MrEricSir · · Score: 4, Insightful

    They need a short term one, specifically one that doesn't involve switching CEOs every year.

    If you don't have stability at the top, you have zero ability to execute a long term goal.

    --
    There's no -1 for "I don't get it."
  3. Oh, that's encouraging... by fuzzyfuzzyfungus · · Score: 3, Insightful

    Wasn't their bold plan for not sucking supposed to be offering 'enterprise' IT consulting? And now they admit that their own organization couldn't change its own asses toner cartridge with both hands and a map?

    1. Re:Oh, that's encouraging... by Sez+Zero · · Score: 4, Insightful

      My thoughts exactly. The headline should have read "IT Company Has Bad IT; But Don't Worry, CEO Says It Will All Be Fine In A Few Years"

  4. Computers are Dead by fm6 · · Score: 4, Interesting

    Pretty much everybody who needs a PC already has one, and will go as long as 10 years between replacements. Servers are still big business, but nowadays data centers want to buy cheap white boxes, since any reliability issues are handled by cloud software. So name brand computers are dead.

    When I worked for Sun's hardware division, I believed that the company could turn itself around by firing all the sales idiots who thought x86 systems were a passing fad. (Which earned my emity because I worked on some fancy x86 systems that were easily the best on the market.) Now that I've been out working on cloud systems for 3 years, it's become obvious that the brand of computer an app is running on matters as little as the specific processor. Commodification of everything is the new normal.

    1. Re:Computers are Dead by tom229 · · Score: 3, Insightful

      I have no idea how this has been voted up. The statements in this post are pure fantasy. First off, on what planet to people keep their PCs for 10 years? It's more like 3... at the most; for both home and business. And on the business side you're much better off sticking with a vendor like HP both for their warranties and the ease of deploying their OEM images over the network.

      Secondly, white boxes are all fine and dandy for large data centers but you're leaving out a pretty big section of the pie there. "The cloud" isn't the blanket solution for everything yet. Virtually all small and medium sized offices run internal windows domains, most still find reasons to need exchange, have internal MDM software, and alot of industries still require older server/client software. Im also seeing more of a desire to have high availability systems which is creating demand for SAN storage.

      Computers aren't dead, "the cloud" (aka. web services) is nothing new, and tablets don't replace anything.

      --
      If it ain't broke, don't fix it.
    2. Re:Computers are Dead by slew · · Score: 4, Interesting

      Nonsense, the variant of processor can matter, but software must be written to take advantage of it...

      The amount of software that is written to take specific advantage of a processor architecture is going down in this era of the cloud. Unless the thing you are doing is so trivial that it doesn't matter, or vast that you can fill your own datacenter with it 24-7, odds are today your software will (eventually) want to run on a cloud platform (e.g, like Amazon AWS/EC2). In a cloud environment, you don't own the computer, you rent a virtual computer. The cheapest rentals will likely be the most commoditized platforms. Specialized software which need specific variants of processors is not only is less cost effective to develop, but also to execute.

      FWIW, As for the other arguments, x86 is mostly dead in the cloud world. Everyone is x86-64-AVX That means in addition to the 16 standard integer registers there are 16 256-bit SIMD registers in the IAS which are quite competitive with Sparc (0+7g+8i+8o register window). Besides, today processors have many more physical registers and do top-of-stack caching so ISA registers don'tt mean as much as it used to mean (e.g, the sandy bridge i7 architecture has 160 integer registers available for renaming).

      Also, all those arguments about magic instructions are mostly not relavent anymore. Everyone pretty much has the similar stuff. For example, the latest rabbit out of the Sparc bag have been a dedicated security co-processor (given that many of their servers are web-host front-ends, maybe a co-processor that does AES/DES/RSA is a reasonable thing), although not clear that it's net any better than say an i7 with x86-AES-NI acceleration instructions + a highly optmized AVX RSA implementation unless all that's all your server is doing is RSA (usually there's some other code running).

    3. Re:Computers are Dead by fm6 · · Score: 3, Interesting

      Maybe I got voted up because people can see for themselves that all this is happening. Maybe the people you know buy new computers every few years and maintain their own in-office networks — but that's not the trend, not by a long shot. There's resistance to moving away from these things, but the fact remains that they cost a shitload to maintain. And what do businesses worry about these days? Cost. Then they worry some more about cost. And then if they have some spare time they worry about cost.

      When you say that the cloud is nothing new, you're assuming that "cloud" is just marketspeak for "servers". Wrong. It's about SaaS and other technologies that make access to applications a kind of commodity. Saying "this is nothing new" is like somebody in 1981 saying "PCs are nothing new, we've had computers for more than 30 years." What's new here is not the basic technology, but the economics and infrastructure that makes that technology more available.

      Which is why HP (as mentioned in the article) is trying to save money by shifting to cloud-based CRM and HR instead of continuing to run their own servers. Ironic, really.

      BTW, you mention the need to run an Exchange server? Every office I ever worked in that had its own Exchange server had major problems because the damn thing is hard to administer. If I had been there as an IT guy, I would have insisted that they go to an Exchange provider and let them worry about that shit. Cloud, cloud, cloud.

  5. Saleforce? Hah by realmolo · · Score: 5, Insightful

    When a company starts thinking that Salesforce (or any CRM, or any single piece of software) is going to save them, that means they are DOOMED.

    The fact that HP doesn't know this says a lot about how clueless they really are about IT, software, *and* business needs in general.

  6. 2,100 different laser printers by NikeHerc · · Score: 5, Funny

    640 printers is enough for anybody.

    --
    Circle the wagons and fire inward. Entropy increases without bounds.
  7. HP in permanent decline by twasserman · · Score: 5, Insightful
    For the past 10 years or so, going back to Her Worship (Fiorina), HP has been cutting staff. Total layoffs through Hurd, Apotheker, and Meg are now up to 100K. HP has decimated its R&D capabilities, to the extent that they are essentially incapable of creating innovative products, which partly explains their 2100 printers. Too many of the people who are left are lifers who know how to keep their jobs. Anyone who is capable of finding a job elsewhere has done so.

    If you are looking for a job, HP is a company without an interesting mobile strategy and a cloud strategy focused predominantly on IT services - not very attractive for entrepreneurial types, who have many other excellent opportunities.

    Finally, the 100K HP departees are not likely to purchase HP products or to recommend them in their new settings. That's a very large pool of people who are going to advocate for competing products.

    So the turnaround projected for 2016 is unlikely to happen, but it's a pretty fair bet than Meg Whitman won't be around HP when that day arrives.

    1. Re:HP in permanent decline by TBB303 · · Score: 4, Insightful

      An ex HP contractor here. I had a good 3.5 years at HP, and even though I got a lot of crap here on Slashdot last time I commented on HP related news regarding how ugly the way they terminated my contract in the end was, I haven't been suggesting everybody I know to avoid HP products like plague; x86 ProLiants are still pretty good hardware, I've always preferred HP displays both at work and at home, and as long as you avoid their consumer models, you'll get yourself a pretty good laptop from them. Those products I can definitely recommend still. However, the company was working against itself already during the time I spent there. Managers were mainly concerned in staying out of the way as long as their performance indicators seemed fine, and while us higher level Unix support folks were seemingly given free hands in solving the customers' problems, that freedom was an illusion, as I learned a couple of years after leaving and hearing all the stuff said about my working methods (example: using SSH tunneling via an SSH proxy dedicated for this purpose by the company) by people incompetent to make such judgements. And that's where I see HP's biggest problem - during the years of growth, so much incompetence has found its way in in that the company has been forced to lay off A LOT of people. Unfortunately for HP, the same incompetence has prevented the company from telling the difference between competent and incompetent workforce. Layoffs are a simple numbers game for them. I feel pride for the way I improved the support process during my stay and how I was part of a highly skilled team, each member with his own strengths that made the team greater than the sum of its parts; I still remember my teammates with warmth. But HP had already grown too big to be efficient by the time I worked there, and this resulted in an organisation that doesn't know where it should and wants to go; and excluding Whitman (of whom I have no experience), the recent CEO's and high level politics definitely haven't made me optimistic about the future of HP.

  8. Doomed by squidflakes · · Score: 4, Insightful

    Its been said, but I'll reiterate.

    Salesforce is not an IT tool, it is a Customer Management tool. The whole point of using Salesforce is to make your sales and customer service people more efficient so you can do more with what you have or do the same with fewer people.

    Workday is the same thing, only it replaces any internal HR databases with its own SaaS solution in order to allow your HR people to manage more people, or in order to manage the same number of people with fewer HR people.

    At the end of the day, both of these projects are about outsourcing internal functions, possibly to save money, possibly because Dave Duffield and Marc Benioff the CEOs of Workday and Salesforce respectively were big contributors to Meg's failed gubernatorial campaign.

    I'm cynical, especially when it comes to the continued flushing of HP down the toilet.

  9. Having just gone through a Salesforce effort... by LaRoach · · Score: 4, Informative

    ...all I can say is sell your HP stock! They're doomed.

  10. Re:fewer = better? by guttentag · · Score: 3, Informative

    One of the first things Steve Jobs did upon his return to Apple in the 90s was kill off all the random, overlapping, redundant, confusing product lines... Which each cost money to develop, produce, support and market. He drew a cross on the whiteboard and wrote "pro laptop" in one corner, "consumer laptop" in another, pro desktop and consumer desktop in the others. And that was their strategy. The point was to FOCUS a company that had lost its way, and HP certainly looks like a company that has lost its way.