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A Simple Explanation for Why HP Abandoned Palm

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Re: A Simple Explanation for Why HP Abandoned Palm

#41

Post by blinkingled »

acangiano wrote: post #22

I think his interpretation of the facts is very plausible. Sadly, Larry Ellison was absolutely right when he said, at the time of Hurd's scandal, "the HP Board just made the worst personnel decision since the idiots on the Apple Board fired Steve Jobs many years ago." Good CEOs who can revamp stagnant companies are hard to come by, particularly in the consumer space. Hurd was that CEO, Apotheker is not. And getting o…

Firing Hurd was the right thing to do - I will argue that they were late. Hurd was seen as aligning with Oracle and making decisions that did not conflict with Oracle. EDS, conveniently missed Sun acquisition, consumer focus in lieu of enterprise paints a consistent picture. There is a reason Hurd now works at Oracle and Larry did not like him getting fired. Besides show me what he did apart from cost cutting.

Apotheker comes from Oracle's competitor SAP. To that effect he isn't shy of focusing on interests that happen to conflict with Oracle's. To that end, what Gruber is saying is right - the board always wanted more Enterprise focus and that required going against Oracle. That's what Apotheker is doing.

As for missed opportunities - it does not matter. HP just does not have the DNA to do great in the already saturated PC and phone/tablets market. Not having to deal with that means they can focus their resources and capital where they are well oiled to do great. It only mattered if HP managed to get a CEO that can change its DNA - Neither Hurd nor Apotheker were into that. If they could have found a great consumer focused CEO with proven and relevant record, then it would have been worthwhile to risk competing in consumer space when it meant losing focus on Enterprise. Otherwise its just not really smart.

And they are still not giving up on webOS. But the only catches here are they don't yet know what to do with webOS and the Oracle/Itanium problem. With PSG off their bottom line they could now afford to ignore webOS until they find the right thing for it and focus their hardware resources to sell more proliants and fix the Itanium problem. That's the idea.

Re: A Simple Explanation for Why HP Abandoned Palm

#42

Post by _delirium »

skrebbel wrote: post #21
masklinn wrote: post #14

Earlier quoted context omitted.

> What HP needs now is focus and that is what Apotheker is doing. Yes and no. Focusing would be to reduce the surface of the corporation to its core business, basically what Jobs did when he got back to Apple. What Apotheker is doing is to change HP's business altogether.

> What Apotheker is doing is to change HP's business altogether. No he isn't, he's reducing its scope to the most profitable and future-proof business units. HP is one of the world's biggest enterprise software business. Yes, also before they bought Autonomy. They just also make PCs and printers and the likes, which makes consumers not know any better than "HP is a PC and printer maker".

I'm not sure I'd relegate PCs+printers to just the "also make" category; they make up about half HP's revenue, and almost 2/3 of its profits.

Re: A Simple Explanation for Why HP Abandoned Palm

#45

Post by bugsy »

I don't see what the big advantage is of CEOs few have heard of being dragged in to nuke existing companies and rebuild them in the image of the old company he used to work at. Why not just nuke the company out of spite (or alternatively sell off all assets and give to charity if not spiteful) and have the CEO stay at the old place and keep doing the same thing. Same outcome but not as painfully dragged out.

Obviously if you keep doing multi billion dollar acquisitions, and then trash it all and fire everyone a couple years later when you switch CEOS, and then when things get even worse, fire that CEO with a golden parachute and bring it his cousin to do it all again, pretty soon your company headquarters are going to be an abandoned grassy field.

Talk about burn rate!

Re: A Simple Explanation for Why HP Abandoned Palm

#46

Post by nivertech »

raganwald wrote: post #17
ars wrote: post #6

Earlier quoted context omitted.

At a good enough price I'm sure they would have found a buyer. They got zero dollars for it now, so any sale prices seems better than what they did. And if patents were the problem they could have required a cross licensing agreement with any buyer as a condition of sale.

INAA, but in many cases you do better to shutter something and write it down than to sell it for a pittance. Let’s say it’s bleeding money. Keeping the lights on while you find a buyer costs money, and buyers are no fools: If you can’t find two buyers to bid against each other, the one buyer you find has you over a barrel: Every day they delay in negotiations with you costs you money, so you are under tremendous pres…

It's the same as some VCs will prefer to shutdown a startup, instead of selling it for a low price.

If they will sell it and it turned to be success with new owners - others will think this VC is dumb. If he shut it down - no chances to look dumb ;)

Re: A Simple Explanation for Why HP Abandoned Palm

#47

Post by allertonm »

bradleyland wrote: post #25
allertonm wrote: post #24

Earlier quoted context omitted.

I tend to agree with anigbrowl. While there are some overlapping products, those things are a tiny fraction of what SAP sells and far from their core business (I used to work for SAP Business Objects.)

If looked at closely enough, no two businesses are alike. The question is, what's relevant to the discussion? In the scope of comparing consumer products vs business consulting, we can paint with broad enough strokes to call SAP and Autonomy "similar" businesses.

Perhaps so, but in this case you don't have to look too closely.

Autonomy & SAP have similar customers, true. But the suggestion in Gruber's post is that the purchase of Autonomy is a substitute for a purchase of SAP. Which is a bit like saying the purchase of a front drivers side door mirror is a substitute for the purchase of a car.

(Downvotes too, jeez.)

Re: A Simple Explanation for Why HP Abandoned Palm

#48

Post by cwilson »

acangiano wrote: post #22

I think his interpretation of the facts is very plausible. Sadly, Larry Ellison was absolutely right when he said, at the time of Hurd's scandal, "the HP Board just made the worst personnel decision since the idiots on the Apple Board fired Steve Jobs many years ago." Good CEOs who can revamp stagnant companies are hard to come by, particularly in the consumer space. Hurd was that CEO, Apotheker is not. And getting o…

"And getting out of the consumer space, at a time when there are several paradigm shifts going on, means missing huge opportunities."

For HP, at this time, I'm not sure I agree. Why? It's as simple as Apple is in that market as well and nothing HP (or anyone really) has done has stopped or caught up with their momentum.

In fact I think it's smart for them to transition to the enterprise world entirely. We don't hear about it often on HackerNews or Techcrunch, but that market is massive and HP has been acquiring companies within it for years. They likely make more money in the enterprise market (security specifically) than in the PC business. Hell, they just bought a company called Autonomy for 10 billion dollars. What do they do? Enterprise search and information management.

Re: A Simple Explanation for Why HP Abandoned Palm

#50

Post by nknight »

chollida1 wrote: post #29
cletus wrote: post #3

I tend to agree with the basic reasoning but there's one thing I don't understand. Why cancel the TouchPad? Why not just spin that out with the hardware business to Compaq (which is the idea, yes?)? It seems they've devalued that unit by killing WebOS. All PC makers are on razor thin margins... apart from Apple. A post from yesterday [1] painted an interesting picture where Dell, through a series of seemingly rationa…

> Why not just spin that out with the hardware business to Compaq (which is the idea, yes?)? It seems they've devalued that unit by killing WebOS. I'd imagine one of the biggest reasons is patents. If they spin out the business they have to sell the patents. If they're going into a new market where they don't traditionally have alot of expertise their only chance of not getting sued into oblivion is to be able to cro…

What? Why would they have to sell the patents? Keep the patents, license them to the spin-off, no?
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