Hewlett Packard: The Giant on the Brink of Extinction?
On Aug 19, 2011 the big news broke! (Quoted from HP Press Resources) The company decided to discontinue operations for webOS devices, specifically the TouchPad (yet to be launched) and webOS phones. HP will continue to explore options to optimize the value of webOS software going forward.
Technology Media Giant Tech Crunch felt that this news will come as a huge punch to the gut for webOS diehard fans, many of whom have stood by the product for years — first in hopes that Palm would eventually launch a device worthy of the rather fantastic operating system, and later in hopes that HP’s acquisition of Palm would be the spark to the fire that just never seemed to light.
Indeed, HP is facing the most turbulent time of its existence. But such irrational and harsh decisions will damage the company’s brand. Acquisition of Palm for $1.2 billion was just last year. The company investing (now I feel it was wasted) a year to build smartphones and tablets. It also spent millions of dollars in marketing and pushing the products out and today it has decided to shut down! Is it a shortsighted approach or a decision that will make the future of the company is yet to be seen.
In a frantic attempt to explain the chaos surrounding HP’s direction Leo Apotheker has said, “There is indeed a lot of news, so let me put it in perspective. Today is about transforming HP for the future.”
The company has apparently lowered the outlook for next quarter. “I’m taking ownership for these decisions. I feel your pain,” said Apotheker.
But amidst the chaos there’s some strong news coming in. HP has decided to acquire enterprise infrastructure software company Autonomy for $10.2 billion in cash. The Europe-based software giant with a market capitalization of nearly US$ 7 billion will give HP the required impetus and a global footprint. It will also be one of HP’s largest acquisition deal so far. The company also bought 3PAR ($2.35 billion) and ArcSight ($1.5 billion) last year.
Autonomy, which recently bought assets from Iron Mountain, can give HP a great boost in the software business where IBM has left it far behind.
Apotheker in his statement said, “Autonomy presents an opportunity to accelerate our strategic vision to decisively and profitably lead a large and growing space…Together with Autonomy, we plan to reinvent how both unstructured and structured data is processed, analyzed, optimized, automated and protected.”
Some of the decisions which HP took in the past haven’t brought any good news. After the infamous exit of Mark Hurd and with him a whole lot of top executives, the company has been in a literal mess as far as its brand image is concerned.
These decisions can cause serious damage to company’s reputation among its stakeholders – from customers to retailers to channels.
Although Apotheker in his statement has emphasized that the company is focusing on what needs to be fixed, and what needs to be shut down, and what needs to be separated, I strongly feel that company is not far from being extinct.