HP sets record straight about PSG futures
September 8, 2011
After HP installed a new head of communications, the company dished out plain-talk emails today that described "HP's bold new direction. The facts." This vendor which is either a large part of migrated 3000 customer operations, or a candidate for those who haven't moved, pushed its own story about leaving the PC business. The vendor calls it "the new PSG--whatever form that may be." HP has innovated with a full-page ad in major newspapers to stem the talk of a Hewlett-Packard computing decline.
HP says it prefers to spin off a $41 billion business -- which would be one of the biggest spinoffs in business history -- because business computing has become its business focus. "HP is implementing a plan to fundamentally transform the company to better focus on its strategic priorities: cloud solutions and software for the enterprise, commercial and government markets," it said in its emails.
HP also invoked the "ecosystem" word while it described the future of an operating system, never a good sign based on the MPE experience 10 years ago. The vendor said that despite killing the future of TouchPads, the tablet's webOS never looked better.
The webOS ecosystem is stronger than ever. We received an overwhelming response from consumers to the recent price reductions for the HP TouchPad. Many of our retail partners and online stores sold out of the devices within hours. More than 90 percent of purchasers are new to webOS and we are excited about the increasingly growing webOS community.
Even though no one can buy a TouchPad at the moment, "Application downloads are hitting record highs, which further reinforces that customers are enjoying access to content they want and need." Customers are backing away from their wants and needs of HP's PCs, according to industry reports. One columnist noted that "Confusion is never a good business strategy." Thus, today's emails.
If that's correct, a lot of HP's enterprise customers should be trying to calculate the rate of trending away from NonStop, VMS and HP-UX servers. All of these operate with Itanium chips, and all without significant growth anymore. (In another troubling sign of growth, the company's stock price remains in the $23 price range where it fell after the PSG spinoff news was announced -- three weeks ago.)
No matter what PCs the company spins away -- it said it would decide by the end of this year -- HP won't be spinning out its ProLiants, so profitable and leading in their space for blade servers. Windows and Linux users sometimes choose these servers to replace 3000s in a migration. HP is still signing up new ProLiant customers. Just this week it announced up to $800 savings on ProLiant AMD servers, including the latest G7 BL465c BladeServer. (Details on those sale prices were yielding a 404 Not Found error today, however.)
HP's CEO Leo is a software guy, but his idea of software isn't an OS, it's Autonomy -- the UK firm that managed to sell $850 million of SaaS last year. One dollar in three of Autonomy Sales comes from Software as a Service. But that yearly Autonomy business posts fewer sales than those stalled NonStop, VMS and HP-UX businesses record in half as many months. Analysts on the briefing call wanted to know what magic HP will manage to spin an $850-million company into a business big enough to replace its profitable hardware lines.
HP's leading message about the future of PSG is that "Our preferred course is to spin off our PC business into a separate company, creating a more agile organization to help us better anticipate change and quickly respond to customers." HP did promise Agility IT just back in June, during its HP Discover conference. At the time, there was no mention of any spinoff needed to enable that agility.