Thoughts on HP leaving PC business? It's insane!!

[urchin]

I read the news about CEO Leo Apotheker and his lame brained plans to have HP exit the PC and related hardware business. I think it is insane. HP came into being based on hardware creations and it has what made the company a success.

I don't doubt that they need to streamline the business and eliminate duplications and possibly the lowest level products to increase profitability. Also they need to increase the level of durability and quality that they had back from the late 90s to early 00s. But overall I'd say they offer very good quality products at a good value with good support.

Even IF the PC business is not hugely profitable it is what gives the company high visibility to the pubilc and that is a very beneficial thing when it comes to other parts of their operations.


It seems like the BoD keep destoying the company ...first you have the disaster Carly Fiona, then Mark Herd, now this assinine software guy, Apotheker, running a hardware company.
He might just be the tipping point that murders the company .


I'd bet that Bill Hewlett and Dave Packard are rolling in their graves just about now!

 

[glum]

I look forward to the sale on HP PCs...

 

[JHZR2]

Why? Everyone loves to say that the parts in all computers are identical. If that is the case, the Chinese cheapo is going to make a machine at the best price point... Why try to compete? HP is going to sell the profitable sales and support.

 

[Bluestream]

PC business is low profit; better for the shareholders that the company move on and let some other sucker build the boxes

 

[urchin]

Originally Posted By: urchin
Even IF the PC business is not hugely profitable it is what gives the company high visibility to the pubilc and that is a very beneficial thing when it comes to other parts of their operations.




You must not have read this comment. Sometimes there is value in continuing a legacy part of a business that cannot be valued strictly in dollars.



Then again I don't think there are many companies left in the US that give one [censored] about what made them successful . This usually kills them in the end. Just another form of greed and short term gains at the expense of EVERRYTHING ELSE!

 

[javacontour]

I don't think HP is leaving the enterprise computer market, just the desktop/handheld market.

They are looking to be more like IBM. More about services, less about the hardware.

 

[urchin]

The question is does the market NEED two IBMs? Plus IBM has always been more equally involved with hardware and software development. This isn't so true with HP.

I have to be honest, I hope they fire this Apotheker guy and his team.

I'm not against HP focusing on other parts of their business but the way he is going about this is probably going to kill the company.

 

[simple_gifts]

HP owns EDS; the money is in services, not commodity PCs; Anyway it is the post PC world in the consumer market; PCs are relegated to the office desk only IMHO

 

[wallyuwl]

Originally Posted By: urchin


Even IF the PC business is not hugely profitable it is what gives the company high visibility to the pubilc and that is a very beneficial thing when it comes to other parts of their operations.




This.

As long as you aren't losing money on what has been your core business, you keep it. It will lead people to check out other parts of your business when they need those services. Out of sight, out of mind.

 

[dparm]

LOL so what are they going to do instead?

 

[urchin]

Originally Posted By: dparm
LOL so what are they going to do instead?



They're going to be a "cloud" company!

 

[Brons2]

They should have kept Hurd, he was doing a good job. He deserved a slap on the wrist, not to be fired.

 

[javacontour]

I have read it. You don't need to sell the PC in order to get the service business.

IBM and EDS both are/were some of Sun's biggest customers. IBM was a big proponent of Java. IBM GS provides services to customers who want to host in their data centers.

I have customers who don't open a case with Sun/Oracle, but open their cases with IBM. In fact, we serviced the HP gear until IBM contracted with HP to service the HP gear. Both HP and IBM bid for the overall service contract for ALL equipment in this customer's data center, and IBM won the contract. Instead of having HP service the HP gear, they hired us (Sun) and a few smaller vendors for some of the even older gear to service the HP equipment for this customer.

So services such as data center management, project management, development, etc are where the money is.

Selling the complete solution is where the money is. You can let someone else race to the bottom for the commodity PC hardware sales.

In fact, if a company like HP won an IT services contract, they might pick some vendor on their list to actually deliver and maintain desktops, taking a fee off the top for "managing" that part of the contract, without all the hassle of actually touching any of the hardware.

The company has one vendor to deal with, HP or IBM, and they can be about the business of their business. IT often is a huge distraction for companies, which is why services and the notion of "cloud computing" is so appealing. If you don't have to own a data center to accomplish your IT tasks, you can use the resources saved in IT costs on your core business.

Originally Posted By: urchin
Originally Posted By: urchin
Even IF the PC business is not hugely profitable it is what gives the company high visibility to the pubilc and that is a very beneficial thing when it comes to other parts of their operations.




You must not have read this comment. Sometimes there is value in continuing a legacy part of a business that cannot be valued strictly in dollars.



Then again I don't think there are many companies left in the US that give one [censored] about what made them successful . This usually kills them in the end. Just another form of greed and short term gains at the expense of EVERRYTHING ELSE!

 

[greenaccord02]

Originally Posted By: urchin
Originally Posted By: dparm
LOL so what are they going to do instead?



They're going to be a "cloud" company!

You should see the servers and blade enclosures they make. Also, their new modular design for enterprise workstations is really outstanding. It'll be a smart move for them. There's no money in the PC market.

 

[PandaBear]

HP's problem is in the upper management, that they cannot make up their mind on what direction to do. They spun off Agilent and bought Compaq, and now they are spinning off the PC and throw away Palm, there's really nothing left to sustain such a huge company and layoff will soon follow. They want to be a software company but their software aren't that great. I think in the end they are going to be sold to another software company that want to be a vertical solution provider, like SAP, or merge with another software company like salesforce.

Or they can sell themselves to the Indians like Infosys.

 

[urchin]

Originally Posted By: greenaccord02
There's no money in the PC market.



Now is see the problem...many of you totally missed or don't want to listen to what I was saying earlier.....\

Even IF there isn't much profit in the legacy PC business for HP is it what the world at large knows them for. It makes them VISIBLE to the world and visibility is WORTH MONEY in the long term. It draws potential business customers into considering other services and products they offer since it is a instantly recognizable brand.


This seems to be a huge issue with so many companies today they simply refuse to consider anything that isn't short term gains. Especially seems to be an issue with US companies!


I think a lot of this is due to the business education offered at the top universities.

Also the rise of the MBA has been the death of many companies.

 

[greenaccord02]

Urchin, do you actually do much business in this sector?

HP is and will continue to be a recognizable brand among the people who count. They want to focus on the backend, and that's what they're already known for now. We don't spend $700 on a desktop or $1000 on a laptop and an extra $100 on support. We spend 15K on a server, $500K on some blades or $3,000,000 on a refresh of our workstations. That's where the money is. PCs are for the little guys and for companies like Dell who have built a system for churning them out. That was never HP's forte, and they were only wasting money sticking with it.

 

[dparm]

I've always been a fan of the Proliant servers over Poweredge [censored]. And yes, I used the word [censored] because that's what the Poweredge series really is.

Also, their business-class notebooks have been top-notch. Our company went with Dell a few years ago and I was very disappointed.

 

[Nick R]

All I can say is good. I see more fairly new HP laptops come back with dead motherboards, failed powercords, screens, and overheating problems than any other brand by a huge margin, even Dell. I want to see ASUS, Lenovo, and Samsung gian more of a foothold in the marketplace.

 

[OVERKILL]

I think it is a good move. Their consumer products are garbage. Have been for a long time. They should focus on their server/enterprise stuff, which is much better. And service in that sector.