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HP CEO Meg Whitman outlines recovery plans

Cloud software, mobile printing and Indian phablets
Fri Feb 21 2014, 12:07
An HP logo

ENTERPRISE VENDOR HP has revealed its plans for financial recovery by 2017.

Despite having posted better than expected quarterly financial results, the company still has yet to completely recover from its 2011 collapse. During the company's earnings call on Thursday, HP CEO Meg Whitman was asked to outline the shape of the next three years for the company's business units.

For mobile computing, Whitman said that she didn't see much future in the US market as long as distribution is governed by carriers, however referred to exploratory work in the phablet field within the Indian sub-continent. Overall the key would be "maintaining or strengthening our commercial relations". This might not be going to plan where Microsoft is concerned, after the company recently started promoting Windows 7 over Windows 8.

One example of this might be in the printing sector. "When you teach people to print from their mobile device, they do," she said, sounding like Kevin Costner in Field of Dreams. HP already includes a printing plug-in with certain Samsung smartphones, and this kind of relationship might be the way forward, along with competitive pricing. Ms Whitman believes that this will allow HP to succeed even in a shrinking PC market.

Whitmand said the enterprise market will be based on migration of customers' existing bricks and mortar data centres to the cloud. This sounds like a robust proposition, but with tough competition in the cloud market, along with the fact that this migration will only happen once, it is difficult to anticipate how long this strategy will keep the enterprise division afloat.

The ailing software business is also going to see changes, with a cloud based leasing model coming to the fore. This is not a big growth area for HP, but Whitman believes that moving to the cloud could change matters. Meanwhile, she said that her attitude is, "I'd rather make the transition with a $4bn business than with something larger." Scalability is seemingly key.

However, questions of culpability have been raised over HP's acquisition of Autonomy, whose finances have been called into question, and that might distract HP from executing its software plans.

Finally, for the services division, which has dragged the company down in recent years, the key is automation to cut costs with the remaining staff, and employ what she described as "early career workers". That is, make it cheap as possible to run without eliminating it completely.

The whole process reads like a blueprint for almost any of the enterprise information technology companies that have survived the PC era. However, although there is much here to encourage investors about the next few years, HP still does not seem to have a comprehensive plan set out for the future and its plans for the next few years don't seem to reflect the long term aspirations for a company with its feet still firmly planted among the old guard of the IT industry. µ


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