Wherever I go, whatever story I read, Hewlett-Packard (HPQ) always seems to be on the short end of the stick. This weekend, I looked at IBM (IBM), Accenture (ACN) and SAP (SAP), all of which are doing so well, and I have to conclude that they are simply carving up Hewlett-Packard's consulting business.
Then there is the $10 billion acquisition of Autonomy to be able to boost the enterprise consulting business by offering search software. Having seen SAP's search software in action, I have no idea how Autonomy can compete. Must have some clients I guess, but SAP is gunning for what HPQ has left.
We all know that Hewlett Packard raised the white flag when it came to tablets last year, an incredible about-face on a product that it thought was integral to its strategy. We also know that HPQ tried to develop phone infrastructure with the purchase of Palm, something that Mark Hurd said wasn't about trying to build a phone operation and then reversed himself a few weeks later. That seems like a common theme in that culture.
But what's not included in the equation is the iPad. The new iPad 3 seems like a suitable opponent to the personal computer, but that wasn't the case with iPad 1 and iPad 2 seemed only incrementally better than the personal computer. Now I can't think what the laptop, a big HPQ seller, has over the iPad. Maybe some software companies and data companies don't support the Apple world? Otherwise, someone please tell me why, if you were an enterprise buyer, you would stick with HPQ other than some bogus worry about security or because of entrenchment and good service.
The most important point against HPQ is that the information technology world is gravitating toward the companies that have mobile, social and cloud. While Autonomy was supposed to be helping HPQ in the cloud, the company has no mobile or social strategy whatsoever.
Hewlett-Packard's been starved for innovation as even new CEO Meg Whitman, said last week. And the only thing I see dominant in the whole franchise is the printing business. But believe me, given the way HPQ forces people into different models and has so many different cartridge types, any client would be glad to migrate from the HPQ printer arrogance.
None of this would matter if HPQ were a small company. But it's just the opposite. It has $130 billion worth of revenue that can be taken from others and I think that's exactly what is going to happen, especially when you factor in that a scorned Mark Hurd from HPQ can certainly be cherry-picking vulnerable clients who want to migrate from HPQ hardware and software to Oracle's (ORCL) software and Sun Micro's (SUNW) solution. Not to mention EMC's (EMC) solutions and Dell's competition.
HPQ's still profitable. It still has lots of an installed base and it sells a lot of bundled solutions.
But, to me, the questions are how fast will those revenues go down while the company trims its staff and how can it possibly recover from the lapses in spending and research while others forge ahead.
To me, HPQ's going to be a source of funds as a stock and a source of clients for years and years. It will be the gift that keeps on giving both to its competitors and to short sellers everywhere.
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