Digesting the HP Restructuring/Reinvention/Whatever

Man, talk about a week in which the landscape changes day to day. And talk about a week in which HP decided to cut bait in consumer devices. Perhaps they read my G+ post about them becoming the Studebaker of tech companies (http://goo.gl/HKs2Z) ;-) So, here's the deal. Consumer PCs and those nifty Web OS tablets - gone to someone in China, probably. Picking up Autonomy, the leading enterprise search and content harvesting platform for around $10 billion and reinventing themselves as an enterprise tech company in the image of IBM - about seven years after IBM adopted that strategy.

Putting aside the insanity that is/was HP trying to pick up the pieces after Carly Fiorina's hatchet job on one of the industry's great sources of innovation, let's look at how the pieces fit together. HP has a decent back-office business based on a variety of servers and humdrum but serviceable PCs and monitors for the front office. The servers run a variety of operating systems, including its own flavor of Unix, Linux, Open VMS (DEC lives! Kind of.) and Windows, and many are glued into key enterprise operations, so there's a base of infrastructure into which Autonomy can be integrated fairly efficiently. You might say that they're about to discover a route to the Google Search Appliance - about seven years later, also.

And of course, there are printers, which are still important for business, though even the most blind person can see that they're largely the razor blade handles for ripoff prices on ink and toner sales. Good cash cow, lots of competition but it's the one arena in which you can say that they were innovation leaders who stuck to their guns.

As a survival strategy it's not bad, but it's several years too late, and running into Microsoft's efforts to circle its own wagons in enterprise markets around cloud services and its ubiquitous SharePoint Server software. Autonomy has a lot of good bits in its search toolkit, and with "big data" being the focus of many enterprise IT efforts, having a search company under your wing is likely to position you more effectively. But centered around...what? Blade computers? Linux? Perhaps as an enabler of Microsoft server technologies, but with Microsoft's purchase of the FAST Search and Transfer company several years ago and Powerset more recently, you're up against a pretty established search integration pitch already - not that it's the strongest.

Big Data is HP's best bet in this melee, but I am not sure that Autonomy in and of itself is enough to deliver a compelling argument to most enterprise I.T. execs as a value-add proposition on top of HP's existing components. But then again, short of a pure-cloud strategy, what is these days? Perhaps HP gets to focus on the bits where the most ROI will be over the next several years in enterprise I.T., whilst leaving the parts that Microsoft clings to that are old-school to be picked off by Google's Chrome OS and other cloud enterprise environments that disintermediate SharePoint.

I could rank on HP for being one of many U.S. I.T. companies that held on to pretensions of glory when the Web, China and South Korea were eating their lunch, but that's the past. From a partisan standpoint, the U.S. needs jobs, and therefore companies like HP have to learn how to succeed as quickly as possible. From my perspective, HP's best strategy is to play the Big Data card but also to weaken Microsoft wherever possible. A strong Google alliance based around cloud computing would be an obvious part of that strategy, and should have been much sooner. Motorola will support Google in the short term on Android mobile platforms, so why not get in bed with Google on Chrome OS for enterprise PCs and on harvesting data from Android Developers Toolkit-enabled sensors to feed the Big Data enterprise cloud, using Autonomy to search and organize it all.

Will HP have the guts to go Google? Maybe not. But if they're looking to make some strong waves in enterprise markets, they need to be more than just brand "X" hardware with some legacy software and a search engine. Go with the innovators. Get bold in markets where you're not going to be an afterthought for market share. These first moves for HP are gut-wrenching for many, I am sure, but looking at how IBM reinvented itself, there can be some glory on the other side of the guts. And I'd wager that if they can be the first major U.S. I.T. company to break rank with the Google nay-sayers, they just might steal a march. We'll see. Good luck, guys, remember the garage whom whence you sprung.
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