HP Whitman's modest reform: sticking to cloud computing development strategy

Hewlett-Packard CEO Whitman Sina Technology news Beijing Time September 24 morning, according to people familiar with the matter, HP CEO Whitman (Meg Whitman) will continue to adhere to the existing strategy, will not make drastic adjustments, hoping to help the PC manufacturers to reverse the dilemma. Progressive development people familiar with the situation said Whitman, who was CEO of Hewlett-Packard a year ago, plans to expand its business with new products, including software and tablets for corporate users, as well as a device that integrates storage, computing and networking capabilities. People familiar with the matter said she would meet in San Francisco on October 3 to explain the latest strategy to analysts. HP has seen its revenue decline for 4 consecutive quarters, but to reverse the dilemma, Whitman must convince investors that this incremental strategy is enough to withstand the threats of EMC, Oracle and IBM in the growing cloud market. "Using the cloud as a platform is becoming a big change, and HP has a hard time taking advantage of it." "IBM and Oracle have made the hardware and software mix a key strategy," said applications Consulting, an analyst at the consulting firm Enterprise, Yas Grunbaum (Joshua Greenbaum). "The previous two years, HP experienced a series of management turmoil, competitive pressure has increased, but the acquisition has repeatedly failed." In this context, Whitman's task is to boost investor confidence. She took reins last September from Leo Apotheker, less than 10 months old, and the obvious sign of the latter's tenure was a change of strategy and downward expectations. "They need to restructure the company." Abbissi Ramba Abhey Lamba, analyst at Mizuho Securities, said, "Overall, they have a 80% decline in their business." "HP's shares fell less than 1% per cent in Friday, at $17.59. The unit has fallen 32% per cent since this year. To help clients build cloud computing data centers, Hewlett-Packard is developing a system to integrate servers, storage and network components into one device, people familiar with the matter said. The product will take the Intel processor and use the software provided by companies such as IBM and SAP. This model is based on HP's moonshot system, where users can integrate thousands of computing modules into a single machine to provide network services or analyze data. The internal memo shows that, as part of the plan, the company has set up a department, led by Sala Killer Saar Gillai, vice president of HP's former cloud network. The new department will be responsible for integrating the various products related to cloud computing. Lack of synergy Grunbaum that, while HP has always had software for cloud computing, it is littered with hardware, software and services groups, "without synergy." People familiar with the matter said the latest integrated storage and networking equipment had a starting price of less than 100,000 dollars, the mostHigh up to hundreds of thousands of dollars. In addition, people familiar with the matter said HP was also developing a range of software to help companies deploy HP servers, storage and networking equipment with minimal human resources. The move is aimed at capturing the growing trend in corporate data center spending and getting rid of the image of Low-cost server providers. HP's growth has been constrained as the industry's focus shifts from PCs to mobile devices. At the same time, companies that use the most data centers are starting to build high-performance systems instead of buying off-the-shelf equipment. HP's mergers and acquisitions have also failed to play a role. The company bought EDS and Palm in 2008 and 2010, respectively, for $13.2 billion and $1.2 billion, but has now been writedowns. Autonomy, who spent 10.3 billion of billions of dollars on acquisitions before his departure last year, faces the same risks. Hewlett-Packard said in May this year that autonomy former CEO Mack Linch (Mike Lynch) left after "a big drop in authorized income". According to analysts, Autonomy's income will fall by 1% in the next two years after a 5% decline in revenue this year. Ms Whitman has been tackling the cost of the PC business and plans to lay off 29,000 people by the end of fiscal year 2014 to save $3.5 billion a year. In an interview with the media this August, Whitman said in the tablet market, the company is also emphasizing safety, robustness and business functions to avoid direct competition with Apple's ipad. In addition to the competition from Apple, HP's world's largest PC maker's throne is also likely to give way to Lenovo. HP's global PC market share fell to 14.9% in the second quarter of this year, with Lenovo increasing to 14.7%, according to Gartner, the US market research firm. Because of the tight earnings pressure, Whitman needs to try to win back her share. Ramba, who plans to attend HP's analyst meeting, is confident that she can make sure HP has bottomed out. "It's a protracted war," he said. "In this environment, the situation is unlikely to improve rapidly." (PEI)