What's left?
To quote a TV Magician,
'Not a lot'
They really need to look at their so called consulting biz. More like 'insulting' if you ask me.
Anon because I have to suffer HP everyday and that is bad enough
Hewlett-Packard is considering selling or spinning out its weak business units but warned investors that any deals may not go smoothly. The troubled tech titan stated in its latest paperwork filed to US financial regulator the SEC: “We continue to evaluate the potential disposition of assets and businesses that may no longer …
Can't see it going down very well with the shareholders if she does a u turn, and tries to flog PSG. Not only will that likely crystallise another large write-down, but it becomes evidence that HP have another luckless CEO who simply can't control the behemoth.
Nobody before her has made PSG sing, so her choices appear to be to keep it, continue taking the salary whilst letting PSG destroy corporate worth, or to flog it at a loss and find herself in what will undoubtedly be a very well upholstered lifeboat.
How about a merger between Dell and HP's similarly under-performing PC making businesses? US managers are firm believers that two losers make one winner, and the obvious new name would reflect the customer service that both have latterly provided.
to observe that companies who dump exec with a deep understanding of the business and the technologies that keep them in business eventually hollow themselves out to the detriment of shareholders, their employees and the wider society that supports them.
In this case it seems bang on.
HP has lurched from CEO to CEO and the board has just 'wafted' them forwards. Working at HP I met both Fiorina and Hurd on a number of occasions. They were both impressive figures - Fiorina mainly on the glitz (her 'problems' with her previous employers not having come to light), and Hurd on the numbers. Unfortunately that was it - Fiorina did the glitz without looking at the bottom line, and Hurd did HIS bottom line (I think you will see that amongst other things, cash flow was important to his annual buns) without considering the long term.
Now both were very flawed, but the board (by that time HP-less (family) I think) must take its share of the blame, but they were all too busy ramming dollars into their bank accounts. Good internal candidates who had really made something of their divisions were ignored in favour of the outsider.
Well the chickens have come home to roost. The board screwed up an the outsiders demonstrated neither ability (outside their narrow range) nor a concern for the companies future. Combined with the aquisition of Compaq (OK - HP got a little something special from what was left of DEC) and EADS (wide boys far more interested in their sales than delivery - as many upcoming law suites and commercial losses will demonstrate), things went from bad to wurst - and not a good sausage either.
Breaking up the company must be the inevitable result. PSG - well, lose the PC business and let the printing guys (sill a jewel in the crown) get on with it. Enterprise systems and associated specialities, such as HPC, likewise. Services - well, EDS were dying on their feet, I see no reason why theyshould be subsidised by the better parts of the company - cut em loose.
I comment from a point of some loss (booo hoo)., When I joined HP, I exchanged IP for stock. Most of that 'vested' a short while back (I had already dumped what I could). I have now dumped the rest - a lesson learnt, I really thought HP had it in them when I agreed to the arrangement - more fule me - that's greed for you :-(
>.HIS bottom line (I think you will see that amongst other things, cash flow was important to his annual buns) without considering the long term.<
Now we see the violence (problem) inherent in the system.
All the bosses of all these crap companies have bonus schemes linked to short term gains. Screw the company but make a decent bottom line for a couple of years and then move on and do it to some other poor company.
Their bonuses / pensions should be linked to long term performance.
I think Meg is on a dollar a year + bonus so hunkering down on the salary ain't gonna happen.
Sorry, but it's a bit of a leap from "we're looking at the performance of some units" to "HP to sell Autonomy or their PC bizz!" Surely they wouldn't have trashed Autonomy's rep with the ongoing accountancy scandal if they intended to flog it off? Also, doesn't a slew of their new storage software use Autonomy software buried inside? And the PC bizz is a doorstop that keeps account doors open for hp to push other products into customer accounts with a bigger discount.
Personally, if I was guessing where the axe might swing, the likeliest victims would be the hp tablet/phone team inside PSG, if any of them are left. There are also some other software teams besides Autonomy that might be up for the chop before the Autonomy team. Remember, on revenue, hp is still one of the largest software companies in the World, it's not all just porinters and PCs, despite what the trolls would have you believe.
"It's a bit of a leap...to HP sell PSG", the problem has been that PSG has been going down hill for a few years now, and there's doesn't seem to be a way out for a loss making division that is part of a corporate dinosaur. Even Dell haven't managed to resurrect decent profits in their original core business of PC assembly, I suspect because the barriers to entry in the PC assembly market are too low, and the value added too low. Nothing HP can do to change that. There's no business equivalent to high margin niches like Alienware (they could try it: "New from HP: Allenware, for Allens in accounting everywhere").
It seems defeatist to say that HP have to exit personal systems, but there's lots of other sectors that are either dominated by small businesses (eg plumbing), or where big players do exist but struggle to get good sustainable margins because of low barriers to entry (distribution logistics). Assembling computers appears to be comparable to the latter, with a continuous slow churn of growing boutique PC builders who eventually grow to size they can't sustain, and disappear, replaced by a new fast growing maker. I suppose the problem is that the market wants pre-assembled and fully warranted systems, but it is unwilling to pay a sustainable price (true for most retail and business buyers). If Meg can turn PSG round I'll take my hat off to her, but she'll be achieving something very rare indeed if she does.
"Personally, if I was guessing where the axe might swing, the likeliest victims would be the hp tablet/phone team inside PSG, if any of them are left"
But again, Meg's said that these are new products that HP will need to develop. Whilst I don't think that's a good idea, Meg's dilemma is now one of her own making, whether she goes ahead with doomed "me too" mobile computing devices, or whether she tells the markets something different to that which she told them last September. Admittedly she backtracked and said it wouldn't be any time in 2013, but even so, it's a problem.
".....for a loss making division...." Ah, I see what your problem is, you confused hp's PC biz with IBM's dead one. HP still makes a profit out of PCs, not a loss. Whilst they may be at threat from Lenovo overtaking them on market share, hp are still making more profit on their PC biz than Lenovo as shown here:
(http://www.zdnet.com/lenovo-set-to-take-top-pc-maker-crown-but-at-what-cost-7000000956/)
The bit that is really funny is that the Lenovo threat IS the old IBM PC biz that IBM gave up on when being thrashed by hp and Dell. Which just goes to show Lenovo must have better management than IBM.
My IBM rep laughs every time he discusses how important the PC business was to IBM's server business. Supposedly it was a $1B loss every year so when they sold it they automatically became a $1B more profitable company.
I am sure HP would dump it in a heart beat if they could get an Asian company to pay a reasonable rate. It's a dying business as this year everything Santa brought was from apple and didnt have a keyboard.
HP, now microsoft, can intel save itself? Windows 8 really sucks.
"My IBM rep laughs every time he discusses how important the PC business was....." I'm thinking your IBM rep is laughing at you, regardless of what he tells you! Oh, by the way, did you notice that big, successful PC biz that Lenovo built out of the failed IBM PC biz? Lenovo stepped up and did what IBM management couldn't, so I suppose IBM's server biz customers better hope more IBM lines get sold to Lenovo.
I think it had more to do with consumer market vs. business market. HP is trying to do both and given their $29B market cap vs. IBM's $221B market cap you have to admit the sky is falling over at HP. I did pick up a few thousand shares of HP right after they announced the $8B write off. Sure sounded like the stock hit bottom with no where to go but up. So far up 30%. Except for my expensive ink printer and my touchsmart PC I don't like their gear.
e99
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"Oh, by the way, did you notice that big, successful PC biz that Lenovo built out of the failed IBM PC biz? Lenovo stepped up and did what IBM management couldn't, so I suppose IBM's server biz customers better hope more IBM lines get sold to Lenovo."
Fundamentally different business models. It is probably true that Lenovo is better at using Chinese labor and rapid assembly to mass distribute low cost PCs than IBM was, but I don't think that is a loss for IBM. IBM is a technology company. Their expertise is not in low cost assembly and distribution. IBM makes high IP value add, low volume products. HP is primarily an electronics distribution company. They make low IP value add products and sell them at high volumes. Lenovo is not an expert in technology, but they are good, or so it seems, at low cost electronics assembly and distribution.
You could make the same argument about Daimler Benz (Mercedes) spinning off Chrysler after Chrysler unraveled under Daimler's management. Because Chrysler turned themselves around after they split with Daimler Benz, does that mean you want your SL600 made by Chrysler?
".....Fundamentally different business models....." Not as far detached as you would decant to pretend, and showing a marked degree of inflexibility if they cannot accommodate both within such a large organisation. After all, it was inflexibility and the inability to adapt to changing markets that killed Sun, and IBM retreating into the shrinking markets it is comfortable in, whilst profitable now, does not bode well in the long term.
You also ignore that IBM is retreating from commodity servers to proprietary kit like Power and mainframes, shrinking markets. IBM can only squeeze so much out of it's golden gooses before the World moves on from goose to something new, and IBM seems unable to create anything to move on with. IBM is not winning the software war by a long shot. The original IBM answer was to convert to being a services company, but that is the biggest commodity market of all.
"if you put HP in your comments instead of IBM....." But, unlike IBM, which quit the PC market and is gradually quitting the x64 server market, hp is standing Its ground and fighting for market and profits. It's not like hp was the first company to make printers, or the first to make PCs, but it is still in those markets and making money. The analysts make grumble that it does not make enough profit, but then they only care about the short term. They applaud IBM's retreats as they give good short term profits, but with those markets shrinking where does IBM expect to make the money in the long run? Not software - being beaten in the top end by SAP and Oracle and the lower end by Microsoft. Services is becoming more and more commoditized, even Dell are doing it. Power is being eaten from below by a combination of x64, Windows and Linux. Is IBM marking out some pioneering leap into ARM servers? No. Is IBM charting a groundbreaking new line of mobile communications devices or technology? Definitely not. Is IBM involved in a new OS that is sweeping away competitors like Android? No, IBM does nothing but big and clunky. The memristor tech from hp is going to market before IBM's pale competitor is even out of the lab. Name one market that IBM dominates and the only answer is mainframe and that has been in overall decline for years. Then think of one emerging technology that even has a mention of IBM - not one. Come on , Alli, admit it, unless they can find a patent for FUD, still there largest product, IBM has no certain future.
".....and not view you as a ostrich with your head in the sand." Darling, I don't put much weight in the opinion of cheerleaders.
"After all, it was inflexibility and the inability to adapt to changing markets that killed Sun, and IBM retreating into the shrinking markets it is comfortable in, whilst profitable now, does not bode well in the long term."
That makes no sense. IBM has acquired about 30 software companies in the past few years. They bought Netezza, XIV and Texas Memory Systems on the systems side. All successful acquisitions and new growth areas. It seems that they are doing what they always have done: moved out of industries which have become commoditized and low tech where lowest cost is the only factor that matters. IBM used to make awesome typewriters and punch card tabulators too. They transitioned, or "retreated" as you would put it, out of those businesses to become the largest and most successful integrated systems company in the world. PCs and print/ink are looking a lot like punch card tabulators and typewriters.
"...... Netezza, XIV and Texas Memory Systems......" Yes, Netezza is just such a household name, every company I work at has dozens of their data warehouse appliances - not! Netezza was a panic buy in response to hp putting together the hardware for Snoreacle's Exadata device, when all the analysts were assuring us we'd all be buying appliances by the thousands. That didn't happen.
".....XIV....." Storage, a market that is rapidly being commoditized, and XIV is pretty low-end in the storage arena, so liable to being commoditized sooner.
"....Texas Memory Systems...." Really? Yet another panic buy, this time of a flash producer that was falling rapidly behind the curve? Sure, I liked the old RamSAN devices a few years back, but now they're seriously left behind. 3PAR's so much a better purchase than all three of those put together.
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I completely f*$king despair. A brand new(ish) CEO and she doesn't appear to have an original thought in her head. The only thing she can come up with are regurgitated ideas that the previous CEO got kicked out for. Give me f*$king strength.
Here's an idea for you Meg - make me redundant and get me out of this madhouse.
AC for obvious reasons.
Being ex of HP I find hard to believe anyone expected any better. The track record of CEO appointments would lead to only one outcome.
Sad thing is that we are seeing the end of what was an outstanding technology company and it looks like a death of a thousand cuts, or sell-offs anyway.
Do you work for the same HP that I do? Everyone I know rates Meg higher than either of the previous 1 and a half CEO's. You read an article in the equivalent of The Sun for the IT community and you assume that Meg is itching to reverse the decision she reversed about selling off PSG.
If you don't like it so much, why don't you grow a pair and leave. It's people like you that are the problem, not necessarily the leadership!
I hate to keep on kicking this dead horse, but, the stupidity of the typical business school types is blatantly on display at HP.
The typical business school mentality deals with the short term, never the long term. Increased profits NOW!!!!!!!! WHY?, probably because, you (the Crummy Executive Officer) will not be around in 3 to 5 years when the shit hits the fan. But the long term employees, (that being those that you don't send packing because of misguided cost cutting) will have to clean up the shit you left behind.
IIRC, the correct term for this type of manglement is "sea-gull management". (The urban dictionary's #1 definition calls it like it is: http://www.urbandictionary.com/define.php?term=Seagull%20Management)
There comes a time, when you have cut the costs so far down to the bone, there ain't shit left. Kill R&D, and you don't have any new products left, kill morale by cutting people, and you end up with a people business that has "lost its soul". You end up with a company that is fucked up. IMHO, HP is fucked up.
It isn't just manglement that is to blame here, because you have a BoD that rubber stamps whatever shitty plan their current CEO has concocted to increase shareholder value. Didn't Leo """sell""" Autonomy as a way to increase shareholder value?
If HP's claims about Autonomy are to be believed, then Leo the A-hole pissed away a considerable amount of shareholder value, and the BoD was just as complicit in it in overpaying for a dubious acquisition. Isn't this the same (or nearly the same BoD) that allowed Hurd to """leave"""? Isn't this the same (or nearly the same BoD) that brought Carly on board??
I thank $DEITY that I don't own any HP stock, because I would sure as shit have ditched that stock a long time ago.
Simply put, the BoD is fucked up.
HP seniorsenile manglement is fucked up.
And they collectively are making sure that, in the end, HP gets fucked up.
$DEITY, I feel sorry for HP employees, and I can understand why some of them chose to jump ship. If you can avoid being chained to the HP Titanic as it goes down, you might actually survive its sinking. In another post, I mentioned about HP's crowing about its cutting 17,000+ jobs, and losing some key IT people.
(You can read about that item here: http://www.computerworld.com/s/article/9235168/HP_cuts_workforce_by_5_looks_to_probe_GM_hires) {Sorry el Reg, but your story didn't cover HP's crowing about job cuts and probing the turncoat motivated to leave IT employees, otherwise, I would have linked to one of your pieces.}
Jesus Christ, what the fuck do you expect when you treat employees like ass-wipes, use once, and discard? Do you honestly expect any loyalty when people see their jobs disappearing, and the seniorsenile manglement getting all of the perks? No wonder why this company is heading for the bottom of the ocean! The only shit manglement gives to its people is the shit it (manglement) lets trickle down (or flies off the fan blades) to them.
It is clear that the good-ole-boy executive circle is infected with this kind of MBA (mainly brainless asshole), and executives who screw up, end up with a nice golden parachute; often finding themselves on boards of other companies. So, I ask this, if you own stock in a company, and find that, say Carly, or Mark or Leo, or similarly other brain dead damagement types are on its board; do you really trust their judgment? I know I wouldn't.
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