Hewlett-Packard buys software company to transform cloud computing looking for elephants to dance

Hewlett-Packard, the world's biggest PC maker, recently announced that it had reached a deal of 6.7 billion pounds (about $10.4 billion trillion) to buy autonomy, a British software company. Autonomyceo Mack Linch will take the lead position in HP's software department. Earlier, HP's board sacked the company's CEO, Lee Ai, and appointed Whitman as the new CEO. ' This is the end of big mergers and acquisitions and will no longer look for any big acquisitions, ' Ms. Whitman said. "We have to integrate autonomy to make this case work," he said. ”

HP's recent moves suggest that its development strategy will shift from hardware to software to Internet services. From the acquisition of Autonomy, Hewlett-Packard's aim is to cloud the market. While the Internet and communications giants are eyeing the cloud market, HP has the full End-to-end hardware component, its biggest advantage. Of course, if you want to change the competitive landscape in the cloud market in the short term, HP faces many problems.

Reluctantly hardware business

The recent blockbuster news about HP is continuing. In August this year, former CEO Leo Apotheker announced a series of transformational reforms, including the acquisition of Autonomy. While the software sector is on the rise, HP reluctantly is also making profitable hardware, with the world's largest PC maker announcing the shutdown of its Palm Web OS Tablet and smartphone division and considering selling or stripping its PC business. Since then, Lee Ai, who announced the decision, sadly resigned, and ebay's former CEO, Walt Whitman, was in office, during which the Hewlett-Packard Board said it had no intention of splitting the PC business. New CEO Walt Whitman said recently that the company plans to decide whether to split the PC division before the end of October.

HP reluctantly is also making a profit on the hardware business, a strategic change that has shocked many people. Hewlett-Packard, the world's largest PC maker, has abandoned its PC business plan, and "reluctantly" is one of the core reasons why HP is abandoning its PC business. From the first quarter of 2010 to the third quarter of the company's earnings can be found, its PC business profit margin does not increase the operation of the current situation, especially compared to the profit margin doubled the software business, this is particularly obvious, this has to arouse internal reflection of HP, stripping also logically became the PC department "doomed" results.

Turning to Internet services is a trend

Hewlett-Packard was the first company to do electronic equipment, is hardware products company. It is not difficult to understand the success of the printer and PC field later. Especially in the Hurd era, the hardware products to achieve the ultimate, large-scale, layoffs, compression costs, cut off research and development institutions. At the time of Hurd's departure, HP's research and development investments were only 3% per cent of revenue, far below other IT companies, not to mention innovative internet companies.

From hardware, to software, to Internet services, is not a personal will for the transfer of the enterprise transformation trend. Today, the Giants in all fields are in transition. Hewlett-Packard wants to complete the transition from hardware manufacturers to software providers like IBM, to achieve "elephant dancing".

IBM brought PCs into the mainstream market in 1981. For years, IBM executives have argued that PCs are just a strategic business to pull sales of other hardware, software and services. IBM CEO Palmisano in 2005 mercilessly cut down the PC business, the funds and management resources for other businesses. IBM and Hewlett-Packard were equal in strength before IBM decided to sell its PC business and invest heavily in software and services. IBM is now twice times more profitable than HP, and IBM has a market capitalisation of $198 billion, almost four times times the value of HP's $52 billion trillion.

Targeting the cloud computing market

The HP takeover of British company Autonomy is not a simple acquisition, a company focused on data search, analysis and management, focusing on the management of unstructured data. The advent of the cloud computing era means massive amounts of data, in which there is a lot of unstructured data, and it is clear that in order to effectively manage massive amounts of data, it is natural for companies like autonomy to participate. Autonomy solutions can create synergies between HP's portfolio of products, like lubricants and catalysts, and enhance HP's business in data analysis, cloud, industry capabilities, and workflow management. This will provide key assets for HP's information management and data analysis, and strengthen HP's cloud computing program. Obviously, acquiring autonomy means HP is going to "turn around and cloud".

The current cloud market is like a piece of cake placed in the oven, under the people's enthusiastic attention, steady expansion, big. According to statistics, the global cloud services market size has reached 44.3 billion U.S. dollars, a total of 19 million public cloud users worldwide, 80% of the world's 500 users are using or planning to use cloud services. Companies, including IBM, Microsoft, Oracle and Amazon, have also stripped away from other branches, concentrating their firepower on cloud computing. As an IT-led enterprise, HP, "Up cloud" is obviously a matter of sooner or later.

The cloud market is huge, but there is no denying that competition is becoming more intense. After ten years in IBM, suddenly want to follow the direction of IBM's development, to HP caused by great turbulence. The current industry trend has been very clear, IBM's transformation has been successful, Oracle has also been preliminarily formed, leaving Hewlett-Packard less time. This is the transformation that HP faces--not just for genetic modification, but for a short period of time to get a foothold in the industry.

If you compare HP's cloud strategy with other companies such as IBM, Microsoft, Oracle, Amazon, it has its own advantages. HP's strength is that it provides complete end-to-end hardware components, from PCs, thin clients, workstations to x86 servers, UNIX servers, non-stop mainframe to network, storage and so on, the industry does not have a manufacturer to contend with, this is HP's core genes, It is also the core cornerstone of its future cloud computing.

But if you want to change the competition in the cloud market in the short term, HP also faces many problems, on the one hand, it comes from HP itself, it has to face a series of follow-up work after the PC split of its main business; On the other hand, HP will face pressure from quarterly earnings in the short term. For a company that intends to make strategic transition, whether to overcome these problems is a matter of success or failure in transition.

(Responsible editor: The good of the Legacy)