Home » Cloud Computing strategy » PCs and cloud clients are not parts of Hewlett-Packard’s strategy anymore

PCs and cloud clients are not parts of Hewlett-Packard’s strategy anymore

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Updates: – HP Names Bill Veghte Chief Strategy Officer [Jan. 17, 2012]

In addition to his new responsibilities, Veghte will continue in his current role as executive vice president of HP Software.

As chief strategy officer, Veghte will be responsible for keeping HP on the cutting edge of innovation. He will work with HP’s senior business and technology leaders to help define the IT industry’s future and make certain HP continues to lead the way. Veghte’s new role reaffirms HP’s commitment to providing customers with the latest platforms, products and services needed for success in a rapidly changing world.

“Every 10 to 15 years, fundamental shifts occur in the IT industry that redefine how technology is delivered,” said Meg Whitman, HP president and chief executive officer. “From mainframes to client/server to the internet, companies that identified the opportunity first and developed the right strategy came out on top. As we move forward, HP intends to stay on top, and I believe Bill has the knowledge and vision to keep us there.”

In addition to helping drive strategy for the company as a whole, Veghte will lead HP’s cloud and webOS open source initiatives.

HP chief aims for software revenue leap: report [Reuters, Dec 1, 2011]

Hewlett-Packard wants to see a jump in revenues from its software business, the company’s chief executive told German newspaper Frankfurter Allgemeine Zeitung.

“I want to double or triple our current revenue in software from the current level of $5 billion,” Chief Executive Meg Whitman said, without giving a timeline.

Whitman, who was appointed in September to replace Leo Apotheker, said the company had not made a decision on the future of its Palm webOS mobile software platform.

“It is complicated,” she was quoted as saying when asked about the future of the unit. “We need a good decision, not a quick one.”

Last month sources told Reuters Hewlett-Packard is looking to sell Palm’s webOS mobile software platform. The deal could fetch hundreds of millions of dollars but less than the $1.2 billion that HP paid last year.

Former eBay CEO Whitman defended the $12 billion acquisition of British software firm Autonomy, which was closed in October.

The deal, which was the centerpiece of a botched strategy shift that cost ex-chief executive Apotheker his job, was “a good acquisition,” Whitman told the paper, in an interview published on Thursday.

“Autonomy has potential and we can turn it into a fast-growing unit,” she said.

HP Reports Fourth Quarter and Full Year 2011 Results [Nov 21, 2011]

Fourth fiscal quarter 2011 business group results

  • Services revenue of $9.3 billion grew 2% year over year with a 12.8% operating margin. Technology Services and Application Services revenue grew 3% and 2%, respectively, while IT Outsourcing revenue grew 1% and Business Process Outsourcing revenue declined 2%.
  • Enterprise Servers, Storage and Networking (ESSN) revenue declined 4% year over year with a 13.0% operating margin. Networking revenue was up 5%, Industry Standard Servers revenue was down 4%, Business Critical Systems revenue was down 23%, and Storage revenue was up 4%.
  • HP Software revenue grew 28% year over year with a 27.7% operating margin. HP Software revenue was driven by revenue growth in licenses and services of 33% and 36%, respectively.
  • Personal Systems Group (PSG) revenue declined 2% year over year with a 5.7% operating margin. Commercial client revenue grew 5%, and Consumer client revenue declined 9%. Total units were up 2% with 5% growth in desktop units and 1% growth in notebook units.
  • Imaging and Printing Group (IPG) revenue declined 10% year over year with a 12.8% operating margin. Commercial revenue was up 4% year over year with commercial printer hardware units up 5%. Consumer printer hardware revenue was down 8% year over year with an 8% decline in units.
  • Financial Services revenue grew 18% year over year driven by double-digit growth in both lease volume and portfolio assets. The business delivered a 10.3% operating margin.

HP Software Division (Wikipedia)
HP Appoints Bill Veghte to Lead HP Software and Solutions Business [May 5, 2010]

Veghte will lead the $3.6 billion business unit, which includes a number of industry-leading offerings:

  • IT Management: helps clients improve efficiency and optimize investments with a broad range of management software that spans technology infrastructure, services and operations;
  • Information Management: transforms information for better business insight by automating the search, management and retention of information across an enterprise;
  • Business Intelligence: helps clients gain competitive advantage and create new business opportunities with solutions that connect intelligence across an enterprise; and
  • Communications and Media: enables service providers to transform their communications service portfolios and achieve operational excellence.

Veghte joins HP from Microsoft, where he most recently served as senior vice president for the $15 billion Windows business and where he was instrumental in the delivery and launch of Windows® 7.

Autonomy Unveils Next-Generation Information Platform Built for “Human Information” Era [Nov 29, 2011]

Autonomy IDOL 10 Delivers Real-Time Contextual Understanding of Structured and Unstructured Data

 Autonomy, an HP Company, today announced a groundbreaking information platform, Autonomy IDOL 10, designed to help organizations understand and process 100 percent of enterprise information in real time.

IDOL 10 provides a single processing layer that enables organizations to extract meaning and act on all forms of information, including audio, video, social media, email and web content, as well as structured data such as customer transaction logs and machine-based sensor data.

The platform combines Autonomy’s infrastructure software for automatically processing and understanding unstructured data with the high-performance real-time analytics engine for extreme structured data from Vertica, an HP Company.
[The Vertica Analytics Platform is a data warehouse software for storing and analyzing structured data, or data that has been stored in a relational database.]

From the start of the IT industry until today, humans have had to adapt information to fit the machine, and data was organized into rows and columns, a process which relied on people understanding and manually classifying data. Computers could not understand the complexity of human interactions.

However, people do not speak in zeroes and ones, but have complex language and idioms, send photographs and videos, and communicate via social media – all of which traditional databases cannot process. The challenge for the modern enterprise is to understand and extract the value from this rich sea of Human Information, which accounts for 85 percent of all corporate data, including emails, audio, video, social networking, blogs, call-center conversations, closed circuit TV footage, and more.

Today, the combination of Vertica’s high-speed analytics platform with Autonomy’s IDOL technology marks a fundamental shift in our ability to process this volume of data. We are at an historical moment when it is the “I” in Information technology that is changing. Autonomy provides solutions that understand the full spectrum of enterprise information, both human and structured information, and recognize the relationships that exist within it.
[Autonomy’s IDOL (Intelligent Data Operating Layer) server can index unstructured data within an enterprise, providing users with a search-based interface.]

By enabling computers to understand the shades of grey in the world, rather than simply the black and white found in databases, Autonomy Information Management allows businesses to automate key processes and improve an organization’s efficiency.

For far too long, organizations have confined structured data to relational databases and unstructured data to simplistic keyword matching technologies,” said Mike Lynch, executive vice president, Information Management, HP. “IDOL 10 brings these worlds together, allowing organizations to automatically process, understand, and act on 100 percent of their data, in real-time. The results will be dramatic, as businesses can develop entirely new applications that explore the richness and color of Human Information that live in unstructured, semi-structured, and structured forms.”

Platform built for the Human Information Era – IDOL 10 features:

  • A single processing layer for forming a conceptual, contextual and real-time understanding of all forms of data, both inside and outside an enterprise.
  • A combination of Autonomy’s infrastructure software for automatically processing and understanding unstructured data with Vertica’s high-performance real-time analytics engine for extreme structured data.
  • Unique pattern-matching technologies, powered by an analytics engine based on statistical algorithms that recognize distance in ideas as well as concepts and context in real time.
  • Five new solution sets – HP Big Data Solutions, HP Social Media Solutions, HP Risk Management Solutions, HP Cloud Solutions and HP Mobility Solutions.
  • “Manage-in-place” technology, which forms an index of all forms of data, allowing information to reside in its original location. This eliminates the need for making copies of data, reducing storage hardware costs and removing the need for risky and inefficient transfers of data.
  • NoSQL interface that provides a single processing layer to perform cross-channel analytics that understands both structured and unstructured data.
  • The Vertica Analytics Platform, which includes enhanced native in-database analytics, including new capabilities for geospatial, event-series pattern matching, event-series joins, and advanced aggregate statistical and regression analytics.
  • Vertica’s real-time analytics for real-world applications delivers performance enhancements throughout the Vertica Analytics Platform in areas such as subqueries, database statistics, life cycle management, query optimization, data re-segmentation and join filtering.
  • Enhanced elasticity features that enable dynamic expansion and contraction of clusters more than 20 times faster in every deployment scenario – cloud, virtual and physical – allowing users to quickly create additional capacity as needed.

HP Information Optimization is a core component of an Instant-On Enterprise. In a world of continuous connectivity, the Instant-On Enterprise embeds technology in everything it does to serve customers, employees, partners and citizens with whatever they need, instantly.


IDOL 10 is scheduled to be available worldwide on Dec. 1, 2011.Please visit http://idol.autonomy.com/to learn more about Autonomy IDOL 10.About Autonomy

Autonomy Corporation, an HP Company, is a global leader in software that processes human information, or unstructured data, including social media, email, video, audio, text, web pages and more, enabling companies to leverage their data assets.About HP

HP creates new possibilities for technology to have a meaningful impact on people, businesses, governments and society. The world’s largest technology company, HP brings together a portfolio that spans printing, personal computing, software, services and IT infrastructure to solve customer problems. More information about HP (NYSE: HPQ) is available at http://www.hp.com/.

Michael Lynch [Nov 14, 2011]
Executive Vice President, Information Management
Founder and Chief Executive Officer, Autonomy
Hewlett-Packard Company

Michael Lynch is executive vice president of Information Management at HP and founder and chief executive officer of Autonomy, an HP subsidiary. He oversees engineering, sales and marketing associated with HP’s Information Management portfolio including Vertica and Autonomy. He is also a member of the company’s executive council.

Under Lynch, Autonomy became the pioneering leader in analyzing unstructured, or human-friendly, information from which companies can extract meaning from all data in whatever format it is in, whether email, voicemail, social media, text messages or web pages.

HP Completes Acquisition of Vertica Systems, Inc. [March 22, 2011]

The acquisition, initially announced in February, will provide customers with a powerful solution for managing big data, especially when considering the volume and types of data generated by businesses in today’s information economy. Vertica’s real-time analytics platform has the ability to concurrently load and analyze data, allowing customers to turn information into insight and a competitive advantage at the speed of business.

The close of the deal builds on HP’s strategic focus on cloud and connectivity, and will enhance the company’s capabilities for information optimization by adding sophisticated, real-time business analytics for large and complex sets of data in physical, virtual and cloud environments.

HP to Keep PC Division [HP press release, Oct 27, 2011]

Continued combination of HP and its Personal Systems Group expected to deliver greater customer and shareholder value

HP today announced that it has completed its evaluation of strategic alternatives for its Personal Systems Group (PSG) and has decided the unit will remain part of the company.“HP objectively evaluated the strategic, financial and operational impact of spinning off PSG. It’s clear after our analysis that keeping PSG within HP is right for customers and partners, right for shareholders, and right for employees,” said Meg Whitman, HP president and chief executive officer. “HP is committed to PSG, and together we are stronger.”

The strategic review involved subject matter experts from across the businesses and functions. The data-driven evaluation revealed the depth of the integration that has occurred across key operations such as supply chain, IT and procurement. It also detailed the significant extent to which PSG contributes to HP’s solutions portfolio and overall brand value. Finally, it also showed that the cost to recreate these in a standalone company outweighed any benefits of separation.

The outcome of this exercise reaffirms HP’s model and the value for its customers and shareholders. PSG is a key component of HP’s strategy to deliver higher value, lasting relationships with consumers, small- and medium-sized businesses and enterprise customers. The HP board of directors is confident that PSG can drive profitable growth as part of the larger entity and accelerate solutions from other parts of HP’s business.

PSG has a history of innovation and technological leadership as well as an established record of industry-leading profitability. It is the No. 1 manufacturer of personal computers in the world with revenues totaling $40.7 billion for fiscal year 2010.

“As part of HP, PSG will continue to give customers and partners the advantages of product innovation and global scale across the industry’s broadest portfolio of PCs, workstations and more,” said Todd Bradley, executive vice president, Personal Systems Group, HP. “We intend to make the leading PC business in the world even better.”

More information is available at www.hp.com/investor/PSG-Decision.

HPQ – Hewlett Packard Co PSG Decision – Conference Call [Oct 17, 2011]

Bill Shope – Goldman Sachs – Analyst
Okay, great.Thanks, guys. In light of this decision, can you give us an update on how you’re thinking about your tablet market strategy, both near term and longer term?

Todd Bradley – Hewlett Packard Co. – EVP, Personal Systems Group

Well Bill, this is Todd. That thinking hasn’t changed.We’re continuing to focus on a Microsoft-based– the tablet that we have and the ones that will develop on Windows 8. I think from a webOS perspective, that’s kind of the next piece of work to complete. I know Meg and I are working, Meg, the whole team of Meg, Cathie, myself, Jon Rubinstein working very, very hard and as quickly as we can to make the right decisions about that product.

Meg Whitman – Hewlett Packard Co. – President and CEO

Let me just add, I think we need to be in the tablet business, and we are certainly going to be there with Windows 8. And so we’re going to make another run at this business. And we’re going to make a decision about the long-term future of webOS within HP over the next couple of months. And as soon as we make that decision, we’ll let you know on that. Because many people have said to me, well isn’t the webOS decision just completely tied to PSG? The answer to that is actually no. webOS is, has obviously use in the PSG business, but also in other businesses that we have. So it’s actually– we have to make a more holistic decision around webOS, which coming to a town near you soon, I hope.

Kulbinder Garcha – Credit Suisse – Analyst

… My question for Todd is just on the tablet strategy, Todd, what makes you confident that having been [left] this and what led to the tablet market, and certainly by engaging with Windows now with the lead of both Apple and Android, what can make you competitive in that market quickly? Especially given you referenced kind of growth for the overall PSG business going forward, I assume tablets will be part of that at some point. …

Todd Bradley – Hewlett Packard Co. – EVP, Personal Systems Group

I’ll start with the tablets.We’re at the beginning stages of a new segment in personal computing. I hardly think a couple months into it that I would clarify us as being too late. I think the work we’re doing with Microsoft is extraordinarily compelling. And frankly, I think the work we’re doing in other categories like the Ultra-Mobile space, will be very, very competitive. It’s a competitive business. It moves very, very quickly, and one we have lots of strength it.

HP: Spinning PC Unit off Would Have Cost Billions [Oct 28, 2011]

The cost of spinning off the unit would have amounted to US$1.5 billion in one-time costs and additional payments at later dates, said Tony Prophet, senior vice president of operations at HP’s Personal Systems Group (PSG) unit, which deals in PCs, smartphones and tablets.

The company had close to 100 people — executives, customers and legal advisors — working to evaluate whether to retain or spin-off the PC division, Prophet said. Other factors in the decision to retain the unit were customers’ wishes and the component purchasing power provided by the PC unit, said Prophet.

Some HP enterprise customers previously expressed dissatisfaction with the company’s decision to sell or spin-off PSG, saying they wanted to buy products from a single entity instead of going to multiple organizations for software and hardware purchases. Analysts have said that the PC business helped HP acquire hardware at cheaper rates, and that it also provided strong distribution and logistics capabilities, which were key for the printer and enterprise hardware businesses.

A lot of due diligence went into deciding to retain the PC unit, and there’s no turning back, Prophet said.

The PSG unit was valued at around $8 billion by an analyst in August when strategic alternatives were being explored. The high price made it tough sell in a down market in which other PC makers were struggling.

Looking ahead, Prophet said HP’s future PC and tablet strategy revolves around Microsoft’s upcoming Windows 8 OS. Microsoft has not announced a release date for the OS, but a top Intel executive earlier this month said the OS would be released next year.

“Obviously the major trends and the most important transition point will be Windows,” HP’s Prophet said. “We intend and are working to be a leader with Windows 8.”

HP will release a Windows 8 tablet in the future, and also ultrabooks with the OS. Ultrabooks are being promoted by Intel as a new category of thin-and-light PCs with tablet-like features.

HP’s Whitman Says She’ll Keep Strategies Begun by Apotheker [Bloomberg, Sept 23, 2011]

Hewlett-Packard Co. Chief Executive Officer Meg Whitman plans to stick by strategies set in motion by her predecessor, Leo Apotheker, betting that investors prefer steady leadership to another unsettling change of course.

Whitman, in her first interview as Hewlett-Packard’s CEO, said the company stands by plans to acquire U.K. software marker Autonomy Corp. for $10.3 billion. The company also will continue to explore whether to sell or spin off the personal-computer division, she said. Those moves were announced on Aug. 18.

“It does not signal a change in the strategy,” Whitman said yesterday of her appointment. “We are behind the actions that were taken on Aug. 18. We are firmly committed to Autonomy.”

Whitman is hewing to those plans to avoid alienating shareholders who were fed up with the about-faces that characterized Apotheker’s reign. Still, Hewlett-Packard is overpaying for Autonomy and it shouldn’t have announced a possible PC unit sale without a concrete plan in place, said Chris Whitmore, an analyst at Deutsche Bank AG.

“We’re going to get more of the same from a Meg Whitman- led HP as we did from a Leo-led HP,” said Whitmore, who is based in San Francisco and has a “sell” rating on Hewlett- Packard. “The board isn’t going to change the strategy and is going to continue down this path, which frankly was the fear.”

Shares Fall

Hewlett-Packard’s shares fell 48 cents, or 2.1 percent, to $22.32 at 4 p.m. on the New York Stock Exchange, hitting the lowest price since May 2005. The stock had jumped 6.7 percent on Sept. 21 after Bloomberg reported that Apotheker would be ousted, evidence that shareholders were relieved to see his tenure end.

Apotheker, CEO for less than 11 months, was ousted yesterday after cutting sales forecasts three times and making strategy shifts that blindsided investors. Palo Alto, California-based Hewlett-Packard also said Chairman Ray Lane will become executive chairman.

Whitman’s challenge will be boosting revenue while assuaging the investors whose dismay fueled a 47 percent plunge in Hewlett-Packard stock under Apotheker. She said the company will decide the outcome of the PC business as soon as possible.

“We’ll make a decision as fast as we possibly can,” she said in the interview. “We understand uncertainty doesn’t help the business, doesn’t help customers, doesn’t help shareholders.”


Her experience at consumer-oriented companies such as EBay Inc., Procter & Gamble Co. and Hasbro Inc. may leave her ill- equipped to run Hewlett-Packard’s business-computing divisions, said Shaw Wu, an analyst at Sterne, Agee & Leach Inc. in San Francisco.

“She’s going to be heavily scrutinized,” said Wu, who has a “neutral” rating on the shares. “She doesn’t have the background to turn around HP.”

An estimated 25 percent of Hewlett-Packard’s sales come from consumers, Wu said. “What about the other 75 percent?”

Whitman defended her record at the helm of EBay.

“I have run a large company — not obviously as large as HP, but I have run a very large company,” she said. “While I don’t have years of experience in an enterprise business, I bought a lot of software. I was one of the largest enterprise customers in Silicon Valley.”

Disparate Groups

“That’s like saying, ‘I’ve bought an iPhone, so I can run Apple Inc.” said Whitmore at Deutsche Bank.

Whitman will need to take Hewlett-Packard’s disparate operating groups — including data-center computing gear, technology services, printers, and software — and get them working as a team, Lane said in the interview. He also lauded Whitman’s ability to communicate company strategy.

“The market’s a little confused because we’re in so many different businesses,” he said. “This is 90 percent about leadership, communications and operating execution.”

Lane, who considered becoming the CEO himself, said Hewlett-Packard executives weren’t working well under Apotheker. To explain why the board picked an outsider, Lane said on a conference call that internal managers “were not ready” to become CEO.

Whitman, 55, is credited with helping build EBay into the world’s largest Internet auctioneer, with a market value of about $40 billion. She took the company public and built an online storefront that helped thousands of small businesses peddle their wares. Yet in her final years at EBay, she couldn’t reverse a slowdown in sales growth and overpaid for Skype Technologies SA after a bidding war with Google Inc. and Yahoo! Inc. EBay later wrote down Skype’s value.

Pressure on Apotheker

Whitman joined Hewlett-Packard’s board in January after a failed bid to become California’s governor last year. Before EBay, Whitman worked as an executive at the toy company Hasbro, the floral service FTD Inc., footwear maker Stride Rite Corp. and Walt Disney Co.

Hewlett-Packard had revenue of more than $126 billion in the past fiscal year, almost 14 times the size of EBay’s sales.

“It’s not clear to me that someone who spent 30 years in the consumer space is the right person for an enterprise technology company,” said Dana Stalder, a partner at venture- capital firm Matrix Partners in Palo Alto. Stalder worked under Whitman for seven years at EBay.

Pressure on Apotheker intensified when in August he announced the overhaul that included the Autonomy deal and possible spinoff. He also killed off the company’s WebOS tablets and smartphones, five months after vowing to put the operating system on a full range of the company’s computers.

Hewlett-Packard Forecasts

Hewlett-Packard Chief Financial Officer Cathie Lesjak, who served as interim CEO before Apotheker, said yesterday on a conference call that the company was no longer confident in its fourth-quarter sales guidance. Hewlett-Packard is sticking by its profit forecast, she said.

The company said in August that fourth-quarter revenue would be $32.1 billion to $32.5 billion, with earnings of $1.12 to $1.16 a share, excluding some costs. According to Bloomberg data, analysts are predicting sales of $32.2 billion and profit of $1.14 for the period.

The board weighed whether to oust Apotheker for six to eight weeks, Lane said in the interview.

Apotheker stands to receive cash severance of at least $7.2 million, a figure that could be higher if his annual bonus was set above the minimum $2.4 million laid out in the employment agreement. Including his $1.1 million in salary received for the first year, along with a $4 million cash signing bonus and a $4.6 million relocation payment, Apotheker will have earned about $34.7 million in cash and stock for less than a year’s work.

‘Investors Wound Up’

“Not bad for a short-term job, unless you’re a HP shareholder,” said Brian Foley, a compensation consultant in White Plains, New York. “This is yet another ex-CEO of Hewlett- Packard who does very well despite the circumstances.”

Apotheker joined Hewlett-Packard after Mark Hurd departed as CEO amid a scandal over a personal relationship with a company contractor. Hurd now is a co-president at Oracle.

A steady hand may be just what Hewlett-Packard needs, said Jayson Noland, an analyst at Robert W. Baird & Co. in San Francisco. He has a “neutral” rating on the stock.

The board is directionally behind the plan Apotheker’s put in place,” Noland said. “It’s just the execution of that plan that has investors wound up.

Ray Lane Must Go at HP [Forbes, Sept 23, 2011]

Ray Lane is making the media rounds this morning, defending his decision as the Chairman of the HP (HPQ) board for firing Leo Apotheker after 11 months and hiring Meg Whitman. He did the same last night.

He never thanked Leo. He never apologized to investors or HP employees on behalf of the board for never meeting with Leo before hiring him. He made a string of ridiculous set of statements about how this board wasn’t responsible for all the botched decisions it has made over the last decade.

Lane’s answers are maddening and meant to distract the press and investors from a simple fact: Ray Lane has utterly failed in his role as Chairman of HP and needs to leave immediately.

According to an HP director who spoke to the NY Times yesterday (anonymously — what a coward!), this board was so “tired” after the in-fighting over letting go Mark Hurd that they couldn’t find time in their busy schedule to meet Leo in person before hiring him. Then, the board kept Leo in hiding for the first 4 months of his 11 months tenure — remember that? It was because they didn’t want him to get served by Oracle in a lawsuit against SAP (SAP). Then, maybe they wait another 3 months (because you should at least give a guy a quarter to show himself after you hire him and pay his $35 million for 11 months of work). Then, you get the knives out for him.

The moment an analyst hinted at that last night, Ray Lane became defensive. He declared this board wasn’t the board involved in pre-texting and it didn’t pick Leo.

Wait. It didn’t pick Leo? Which HP board did then?

A board of directors really has two jobs: hire the CEO and fire the CEO. Who hired Leo, Ray?

HP Chairman Ray Lane: A profile in courage [Dan Lyons, Sept 22, 2011]

HP board chairman Ray Lane is lashing out at critics who are pinning the blame for HP’s mess on the board of directors, who are described in this New York Times article as the “worst board in the history of business.”

Now HP’s directors are getting heat for making the incredible blunder of hiring Leo Apotheker as CEO and firing him after 11 months.

Ray says that’s not his fault, nor is it the fault of his fellow directors. “This board did not select Leo,” he says.

Lane points out that eight of the 14 current board members, including Ray Lane himself, were not involved in selecting Apotheker.

That’s true. Several of the new board members did not choose Apotheker — Apotheker chose them.

Ray Lane fails to mention that five of the new board members were selected by Apotheker (or at least with his input): Pat Russo, Dominique Senequier, Gary Reiner, Meg Whitman and Shumeet Banerji. And several of those people had long ties to Apotheker, as Bloomberg reported at the time.

But more chilling than that is the fact that Lane and Apotheker are old friends. Lane, in fact, joined HP to serve as Apotheker’s consigliere.

Lane and Apotheker have known each other for two decades. Lane joined HP at the same time that Apotheker did, in part because he wanted to work with Apotheker, according to the Wall Street Journal.

In fact their appointments were announced in the same HP press release.

In that press release, Lane said: “I am excited to join the Board of this pioneering company, and look forward to working closely with Léo – and the rest of the Board and senior management team – as they capitalize on the changes taking place across the industry. I have known and admired Léo for almost 20 years. He is ideally suited to build on HP’s strong foundation, leverage its many assets and keep the company at the forefront of innovation.”

Soon after that, Lane spoke to the San Jose Mercury News about his “close working relationship with Apotheker, whom he has known since Lane hired Apotheker as an Oracle consultant in the 1990s.”

But how things have changed. Now that Apotheker is out, Ray Lane says he wasn’t one of the guys who hired him, so the world should stop giving him shit about it.

In fact, Ray Lane now says Leo wasn’t very well qualified at all. Speaking to Kara Swisher at AllThingsD tonight, Lane said: “Leo was very wise about figuring out what HP needed to do to add value. But he did not have more important tools we needed, including operational excellence, people skills and communications skills.”

Furthermore, Lane tells AllThingsD that he’s been talking to Meg Whitman about taking over since last February — only three months after he and Apotheker joined HP, hand in hand.

Ray Lane says he approached Whitman because “she had the kind of leadership that HP needed and was lacking under ousted CEO Leo Apotheker,” Kara Swisher reports.

So, wait. In November 2010 Ray Lane joined HP for the chance to work alongside his old friend Leo Apotheker, whom he called “ideally suited” to be CEO. But by February 2011, Ray Lane was already plotting behind his back to get rid of him.

And now Ray Lane — loyal friend, and man of integrity — is angry at critics who question the judgment of the HP board of directors and suggest these folks are perhaps not the best and brightest in the business world.

This after they’ve just hired a new CEO from among their own ranks without conducting a job search because they didn’t think it was necessary and anyway time’s a-wasting and they need to fill that CEO job right away because this is, after all, the world’s largest technology company, one that does nearly $130 billion a year in revenue, and so why not just pick a CEO from whoever’s sitting in the room with you?

Of course, according to Ray Lane, Meg Whitman is an amazing talent who is ideally suited to run HP and has all the qualifications for the job and Ray Lane just totally thinks the world of her. Today.

Two thoughts:

1. Watch your back, Meg Whitman.

2. Stay classy, Ray Lane.

End of updates

HP Reports Third Quarter 2011 Results and Initiates Company Transformation [Aug 18, 2011]

HP unveiled the details of a plan to accelerate the strategy introduced in March. The plan introduced today will:

  • Move HP into higher value, higher margin growth categories
  • Sharpen HP’s focus on its strategic priorities of cloud, solutions and software with an emphasis on enterprise, commercial and government markets
  • Increase investment in innovation to drive differentiation

As part of the transformation, HP announced that its board of directors has authorized the exploration of strategic alternatives for the company’s Personal Systems Group. HP will consider a broad range of options that may include, among others, a full or partial separation of PSG from HP through a spin-off or other transaction. (See accompanying press release.)

HP will discontinue operations for webOS devices, specifically the TouchPad and webOS phones. The devices have not met internal milestones and financial targets. HP will continue to explore options to optimize the value of webOS software going forward.

Taiwan panel makers face challenges over HP’s PC spin-off plan [Aug 22, 2011]

Hewlett-Packard’s (HP) LCD panel suppliers and contract manufacturers are bracing for changes to their partnerships with the US client in the wake of its plan to separate its PC business, according to industry sources.

The extent of changes remains uncertain at this point, but many Taiwan companies could be seriously hit if HP sells the PC business to Samsung Electronics, the sources said. Rumors have been circulated since first-quarter 2011 that HP has contacted Samsung about selling the PC business to the Korea-based firm, the sources from Taiwan’s supply chain added.

Taiwan’s Chimei Innolux (CMI) and AU Optronics (AUO), both of whom are Samsung’s major competitors in the panel market, would see unimaginable impacts on their supplies to HP, the source said, adding that panel makers in Taiwan are already facing a difficult time due to sliding sales from large-size panels amid weakened TV demand.

As for HP’s PC manufacturers, including Quanta, Foxconn Electronics (Hon Hai Precision Industry) and Inventec, their partnerships with the client could also be affected. Although HP’s orders for 2012 have already been set, changes could still be made if Samsung takes over the PC business, the sources said.

Samsung reportedly contacted Taiwan OEMs for evaluating notebook outsourcing [Aug 23, 2011]

Korea-based notebook brand vendor Samsung Electronics has reportedly contacted Taiwan-based notebook makers Quanta Computer, Compal Electronics and Pegatron Technology in August to evaluate the possibility of outsourcing notebook orders, according to sources from upstream supply chain, which added that there might be a result soon and Samsung may outsource a small volume of orders to these players.

The sources added that Samsung’s actions seem like it is already in preparation to take up Hewlett-Packard’s (HP’s) PC business.

The sources pointed out that Samsung’s notebooks are all manufactured at its plants in China, although the company had made contacted Taiwan-based notebook makers several times about outsourcing orders before, there was no result. However, Samsung, earlier this month, invited Quanta, Compal and Pegatron to its headquarters in South Korea with a rather cautious attitude, which the sources believe was an indication that Samsung might be already in preparation for expanding its business.

The sources pointed that the Taiwan’s notebook OEM industry’s production efficiency and cost control is currently unmatched worldwide; therefore, if Samsung takes over HP’s PC department, HP’s over 40 million PC shipment volume will still need to depend on Taiwan OEMs. However, related suppliers of components such as panel, memory and battery may be affected as Samsung has a rather strong vertical integration supply chain.

Within HP’s 40 million units of PC orders in 2011, Quanta will ship 20 million units with Foxconn Electronics (Hon Hai Precision Industry) to ship eight million units, Inventec, seven million units, Wistron, 3-4 million units and Compal, two million units.

The sources pointed out that if HP’s PC business is sold to other brand players, makers such as Quanta, Foxconn and Inventec are expected to see the most impact as they have higher order proportions with HP, while Wistron and Compal are expected to benefit.

Commenting on the event, Quanta pointed out that since the information is still limited, the company can only monitor the outcome carefully; however, since the new PC orders from HP for 2012 are all already set, it is unlikely to have significant changes. However, if Samsung takes down HP’s 40 million units of PC shipments and with Samsung’s own 10 million units, the company will need to ship 50-60 million units totally in one year and will definitely need to find OEM partners as Samsung itself may have difficulty to make all these orders, Quanta noted.

However, Quanta will continue to work on cloud computing and the related products in the future to increase its non-notebook business’ contribution.

Meanwhile, Inventec pointed out that HP’s announcement seems like is for testing the market’s reaction and believes that whether HP will sell the business will still depend on the market’s feedbacks. In addition, since HP is given up its PC business because of the weak profitability of consumer notebooks, Inventec, which is manufacturing mainly HP’s enterprise notebooks, expects to only see a limited impact from the event.

HP PC spin-off plan may cause fierce PC price competition in 4Q11 [Aug 23, 2011]

Hewlett-Packard’s (HP’s) plan of spin off its PC business has already caused a great impact to the PC industry and with the company reportedly already started working on plans to reduce employee numbers and tighten up resources, sources from PC players expect HP will turn aggressive clearing its inventory in the fourth quarter and create fierce price competition.

Sources from the upstream supply chain pointed out that HP stepping out of the PC market may cause significant drops in market confidence for the PC industry since the action is an indication of HP’s pessimistic attitude toward the industry’s future and the pessimistic atmosphere will only increase in the future.

The sources pointed out that HP’s price competition in the fourth quarter will be the most seriously impact toward its competitors for the short term, as for the long term, things such as which player that will take up HP’s PC business, changes in the supply chain and market ranking will all greatly affect notebook players in the future.

Acer already adopting notebook price cuts in the second quarter to clear its inventory in Europe and indirectly forcing its competitors to join the competition. If HP starts another price competition in the fourth quarter, notebook players’ product average selling price (ASP) may drop even further and relatively damage their gross margin.

HP: Down 20%; Now Officially Hated By Almost Everyone [Forbes, Aug 19, 2011]

Hewlett-Packard shares are down sharply Friday after the company’s flurry of news yesterday, which included an $11 billion deal to buy Autonomy, the decision to spin the PC business, the shut down of the WebOS hardware operations, in-line July quarter results and a dark forecast for the October quarter and beyond.

Today alone, the company has lost more than $12 billion in market value.

To say yesterday’s news has not been well received would be a substantial understatement. At least a half dozen analyst cut their ratings on the stock this morning, and few others had anything nice to say about the near-term prospects for the company.

One of the most depressing aspects of the story this morning is that the market already seems to be souring on the leadership of new CEO Leo Apotheker. The general Street view is that the company is doing too much at once here; that the Autonomy deal is ill-timed and expensive; and that the company should have taken a more decisive action on the PC unit, rather than shopping it around in a process the company expects to take a year or more. It’s also astonishing (or on second, thought, predictable) that little more than a month after launching the first WebOS tablet and the first phones following the acquisition of Palm, it has already decided to stop selling them. Imagine the dollars they could have saved had they figured out months ago what the world already knew: that their chances of denting either the tablet or smart phone market were somewhere between slim and none.

Is this Leo’s fault? Or Mark Hurd’s fault? Or Carly Fiorina’s fault? It doesn’t matter. What matter is that the once might Hewlett-Packard, the world’s largest PC company, and one of the globe’s most wide-ranging technology companies, is badly leaking, and taking on water. Let’s hope it doesn’t sink.

Update: Did The Market Get It Wrong About Hewlett-Packard? [by Todd Ganos on Forbes, Aug 20, 2011]

Hewlett-Packard has announced that it will either spin off or sell its PC and mobile computing business units. After this announcement, the market took HP’s stock price down 20 percent. My question is: did the market get it wrong about Hewlett-Packard?

IDC and other tech industry observers will note that while Apple has roughly 15 percent of market share of unit sales of personal computers, Apple has roughly 90 percent of all earnings created by sales of personal computers. Apple has purposefully avoided the low-margin commoditized segments of the personal computer market. The same can said about the mobile computing segments.

Renowned management theorist Peter Drucker said that only two things matter in a company: innovation and marketing; everything else was a (commoditized) expense. Innovation provides for differentiate products and services; marketing conveys the value of that differentiation.

Without a clear sense of product differentiation in the personal computer and mobile computing segments, products will be seen as commoditized. One should expect few profits without innovation and differentiation.

So, was HP’s decision a good one? I would say yes. Capital that is currently allocated to these low-margin segments is a waste. Redeploying such capital seems smart. Now, what about HP’s purchase of Palm. Yes, it’s wasted money. But, it’s a sunk cost. HP’s management must look forward not back. It’s about admitting that they tried something, it didn’t work, now they’re moving on. With HP selling at half of its 52-week high, it seems to be a buy.

Note: There is no exclusion now in cloud client devices becoming commodities. The latest proof of that is the Huawei’s IDEOS U8150 smartphone for US$86 in Kenya: 350,000 units sold in 8 months [Aug 17, 2011].
End of update

Now only one question remains: Why Autonomy is a smart buy for HP [Aug 18, 2011]

I’ve been fascinated by Autonomy, Britain’s largest software company, for years. Those who vaguely recall the name tend to associate it with the company’s knowledge management software of a decade ago. Or more recently, they may think of the  Aurasma iPhone application released this year, which recognizes images (such as movie posters) in the real world and swaps in videos for those images in real time.

The latter technology points to the company’s core intellectual property: so-called meaning-based recognition. Autonomy excels at enterprise search and language recognition using Bayesian techniques originally developed by the company’s eccentric yet charismatic CEO Mike Lynch. The core of Autonomy’s business is in applying meaning-based recognition to identify compliance-sensitive documents and classify them for archiving, where they can be searched using the same Bayesian methods.

A little-known fact is that the company operates one of the world’s largest public clouds, containing petabytes of its customers’ compliance-sensitive material. Earlier this year, IDC identified Autonomy as the fastest-growing search and discovery vendor — and Autonomy doubled down in the space when it announced its intent to buy Iron Mountain’s digital services business in May.

Given Autonomy’s unique intellectual property and its leadership in an area strategic to the next phase of computing, I’ve wondered for years why the company remained independent. A company that has enjoyed major success in enterprise search and compliance — and a big cloud business to boot — helps forward HP’s strategic direction, as outlined by CEO Léo Apotheker shortly after he took the reins at HP.

What maybe even more important, however, is how that technology might be leveraged by HP in enhancing the way humans interact with computers. The push on that frontier, most people would agree, has proceeded slower than anticipated; HAL 9000 still seems a long way off. To me, Autonomy’s meaning-based recognition technology has always seemed to have limitless possibility — as the whizzy Aurasma technology amply illustrates. HP is making a very smart buy.

This article, “Why Autonomy is a smart buy for HP,” originally appeared at InfoWorld.com. Read more of Eric Knorr’s
Modernizing IT blog
, and for the latest business technology news, follow InfoWorld on Twitter.

About Autonomy (at the end of press releases):

Autonomy Corporation plc (LSE: AU. or AU.L), a global leader in infrastructure software for the enterprise, spearheads the Meaning Based Computing movement. IDC recently recognized Autonomy as having the largest market share and fastest growth in the worldwide search and discovery market. Autonomy’s technology allows computers to harness the full richness of human information, forming a conceptual and contextual understanding of any piece of electronic data, including unstructured information, such as text, email, web pages, voice, or video. Autonomy’s software powers the full spectrum of mission-critical enterprise applications including pan-enterprise search, customer interaction solutions, information governance, end-to-end eDiscovery, records management, archiving, business process management, web content management, web optimization, rich media management and video and audio analysis.

Autonomy’s customer base is comprised of more than 20,000 global companies, law firms and federal agencies including: AOL, BAE Systems, BBC, Bloomberg, Boeing, Citigroup, Coca Cola, Deutsche Bank, DLA Piper, Ericsson, FedEx, Ford, GlaxoSmithKline, Lloyds Banking Group, NASA, Nestlé, the New York Stock Exchange, Reuters, Shell, Tesco, T-Mobile, the U.S. Department of Energy, the U.S. Department of Homeland Security and the U.S. Securities and Exchange Commission. More than 400 companies OEM Autonomy technology, including Symantec, Citrix, HP, Novell, Oracle, Sybase and TIBCO. The company has offices worldwide. Please visit www.autonomy.com to find out more.

Autonomy Press Fact Sheet [Oct 15, 2009]
Autonomy Technology Overview [Autonomy, PDF, Sept 28, 2009]
Autonomy’s Technology — A Different Approach [Autonomy, Aug 20, 2008]

More than 80% of all data in an enterprise is unstructured information. This encompasses telephone conversations, voicemails, emails, electronic documents, paper documents, images, web pages, video and hundreds of other formats. Unfortunately, attempts to leverage this immense and strategic resource often fail because many businesses lack the requisite technology to understand and effectively utilize content that resides outside the scope of structured databases.

Similarly, unstructured processes are equally unwieldy yet comprise the bulk of business operations. Current trends anticipate the rapid proliferation of rich media, widespread adoption of VOIP, growing use of IPTV and increased scrutiny of white-collar crimes. This overwhelming growth demands an automated solution that can effectively manage an unstructured digital morass.

These concerns necessitate an information infrastructure platform that addresses all classes of information in a manner analogous to well established methods for structured databases. Akin to the Relational Database Management System (RDBMS) that revolutionized the computing industry in the 1960s, this innovative platform enabled computers to process not only structured data, but also vast amounts of semi-structured and unstructured information using a global relational index.

Autonomy’s ability to process all forms of digital information on a single platform offers a unique solution to a growing number of applications and devices that are increasingly dependent on utilizing unstructured information. Autonomy employs a unique combination of technologies to enable computers to form a contextual understanding of all digital content, as well as understand people’s interaction with the data. Autonomy’s technology eliminates the traditionally manual and costly operation of processing and analyzing information by performing these functions automatically and in real-time. This represents substantial savings for every type of organization and industry and is driving the accelerated adoption of Autonomy’s technology across a diverse range of vertical markets.

Investors — An Introduction to Autonomy [Jan 29, 2010]


  • Previously computers could only process information if it was organised in rows and columns, or “structured”
  • The amount of unstructured information such as email, instant messaging and video is growing exponentially so that it now exceeds structured data 4:1
  • This is the biggest change in the IT industry to date because it is the first major change to the information rather than the technology
  • Autonomy’s technology understands the meaning of all unstructured information and automates tasks that could only be done manually before
  • Over 20,000 global companies rely on Autonomy’s technology today
  • A pure software business model has allowed us to achieve a 5 year EPS CAGR of 73%

Autonomy’s Products

In Autonomy’s fifteen year history our fundamental aim has not changed: computers should map to our human world and solve our problems, rather than the other way around. Autonomy has developed a fundamental piece of technology that allows computers to understand the meaning of unstructured information and process it automatically. That technology is the Intelligent Data Operating Layer (IDOL).

The proliferation of unstructured information is occurring in every industry from manufacturing to financial services, and so the IDOL platform is a truly horizontal technology that is used across every vertical.

Business Model


Autonomy has over 400 Value Added Resellers (VARs) such as Accenture, IBM Global Services, Cap Gemini, HP and Wipro. Around 80% of Autonomy’s licence revenues come from this channel. Autonomy has an elite team of partner managers who attend occasional client meetings and ensure that customers receive the appropriate level of service, but these partners offer domain specific expertise and a global presence which allows Autonomy to run an incredibly efficient sales operation.


Autonomy has over 400 Original Equipment Manufacturer (OEM) relationships with other major software vendors that build our technology into their products. These OEMs span every software sector from CRM to Product Lifecycle Management software. An OEM pays an upfront fee and then writes its new product which can take up to two years depending on its product roadmap and release cycle. Once the product is launched they pay a royalty stream of around 3 percent of product sales to Autonomy. This we would expect to expand overtime as OEM partners embed more IDOL functionality in subsequent product releases.


Customers who purchase a licence for Autonomy’s software initially pay an Average Selling Price (ASP) of around $400,000. A typical initial contract will likely include four of Autonomy’s 500 functions and around four connectors. The pricing model is based on three drivers of value: the number of users, the number of functions / connectors, and the amount of information being processed – any two will be prevalent in a particular use case. For example, in intelligence processing type applications it will be the amount of data rather than number of users that is the dominant factor, but in a corporate environment for a knowledge portal it may well be the large number of users that determines the pricing. In addition to the upfront licence payment these customers also pay around 15 percent support and maintenance, which is due annually.

SaaS and Hosted

Autonomy also operates Software-as-a-Service (SaaS) and hosted models, where the solution is run on hardware owned by Autonomy in one of our data centres. In fact, Autonomy runs the largest managed archive in the world at over 17 Petabytes of data.


Currently a small part of the business focused on quick time-to-value and high return. Where customers have an urgent need to deploy IDOL, either for regulatory or commercial imperatives, we are able to provide a pre-installed licence on appropriate hardware to start generating an immediate return. The value of these solutions is attributable almost entirely to the functions offered by the licence, so although there are some hardware costs involved, the margin profile is not widely dissimilar to our traditional licence business.

Financial Model

Autonomy is one of the very rare examples of a pure software model. Many software companies have a large percentage of revenues that stems from professional services, because they have to do a lot of customisation work on the product for every single implementation. In contrast, Autonomy ships a standard product that requires very little tailoring, with the necessary implementation work carried out by approved partners such as IBM Global Services, Accenture and others. This means that after the cost base has been covered, for every extra dollar of revenue that comes in, you simply take off nine cents to get to the gross margin and then a further ten cents which is paid in commissions to our partner managers. That leaves approximately 80 cents which falls straight through to the bottom line. What this offers is a business model with a proven record of strong operating leverage and that is expected to continue to deliver industry leading operating margins and revenue to cash conversion.

Autonomy’s Technology — Understanding Meaning: An Evolution [Autonomy, June 26, 2008]

Evolution of Search

Autonomy Search Solutions

From the time of the very first computers, their inability to process human-friendly, “unstructured” information has posed a considerable challenge. The modern IT industry was founded on the principle that, for example, if the number in “Column 3” goes to zero, the computer will automatically order more stock for the warehouse – in other words, the position of a piece of information tells the computer what to do with it – and a tremendous amount of effort has been poured into sorting and distilling unstructured information into tidy rows and columns.

Increasingly, structuring information in this way does not represent a viable solution, not only because of the incredible amount of manual effort required but because by organizing information in this way, its richness and subtleties are lost. Consequently, attention has turned to finding alternative, more intelligent solutions to the problem of unstructured information and the journey towards integrated MBC began…

Keyword Search

Because computers were unable to understand the meaning of information, the seemingly obvious alternative was to simply search it in order to locate any keywords relevant to the desired subject. The problem with this approach is that the computer has no way of identifying what a given keyword means, and therefore cannot process the information afterwards. For example, if a user types in the letters “D-O-G” the computer has no concept of what that word means; it will simply identify all of the documents which contain that combination of letters, which might produce a list of results thousands of pages long.

Keyword Search +

In order to improve the results from straight-forward keyword searches, the technique was enhanced by adding a series of arbitrary rules so that the most relevant results would appear at the top of the list. For example, if the search term appears in the title of a document, five points are added to that result, and if it appears three times within the document, one point. This works to a certain extent but the important issue is that there is still no understanding of what a “D-O-G” is, or does. In addition, the rules have to be modified manually and become very costly to maintain every time a subject develops.


On the Internet there is a simple trick to get around this problem because, in many cases, the most popular information is also the most relevant. The importance or popularity of a Web page is approximated by counting the number of other pages that are linked to it, and by how frequently those pages are viewed by other users. This works quite well on the Internet but in the enterprise it is doomed to failure. Firstly, there are no native links between information in the enterprise. Secondly, if a user happens to be an expert, perhaps in the field of gallium arsenide laser diodes, there may be no one else interested in the subject, but it is still imperative that they find relevant information.

Federated Search

As a result of new regulatory drivers such as the FRCP, enterprises need to be able to guarantee that a search has covered absolutely every piece of relevant information across potentially hundreds of different repositories throughout the enterprise. Most search engines are not actually capable of doing this so they ask the original repositories to perform the search – a process known as federated search.

Federated search is often advertised as an asset. However, it creates significant problems because it generates vast increases in network traffic. Every time the user enters a query, each and every repository has to do a search, so a repository that previously ran a search perhaps 0.01 times per user per day, starts to glow white-hot. More importantly, all of the results are searched using different algorithms which means that all of their relevance rankings are different and incompatible when compiling a results list. In addition, most of the underlying search algorithms used in the repositories are not compliant with the new FRCP. Consequently, federated search is not compatible with a pan-enterprise platform.

All of the approaches described up to this point fit squarely into the mid-enterprise search market. A technology which is limited to these capabilities is not suitable for a true pan-enterprise deployment, for reasons that will now become clear.

Conceptual Search

A critical leap forward came with the ability to actually “understand” the idea behind a given phrase, and retrieve information which is conceptually related, even when a particular keyword is not used. So for example, if the user types in the letters “D-O-G”, a conceptual search engine will retrieve all the information conceptually related to but not confined to the word “D-O-G”, perhaps information about a “hound” as well as “walks” and different breeds of dog, because it understands the idea represented by the word. This is incredibly powerful because critical information is often missed because users do not always use the same search terms.

Secure Search

Security is absolutely paramount to the enterprise and the challenge this poses is staggeringly complex, from protecting the enterprise’s intellectual property from unauthorized access, to ensuring internal compliance with an ever-growing list of regulatory requirements. Most users are not permitted to view most documents or even be aware that they exist. Typically, around 1/1000 documents should be available to each user and access privileges must be specific to each of the many underlying repositories in the enterprise. Achieving air-tight security without significant performance degradation is a considerable challenge.

Legal Search

In order to scale without impeding performance, some technologies fail to search each document in its entirety. This prevents users from retrieving valuable information and it exposes the enterprise to significant compliance risk. Such technologies begin to calculate the relevance of each document at indexing time; however, if at the beginning of the calculation a particular result appears to be irrelevant, the engine will stop calculating, effectively assuming the result is not relevant without reading all the way through. Consequently, a relevant snippet of information on the last page of a hundred page report could be overlooked and the legal consequences could be absolutely catastrophic. In fact, the company CEO could go to jail because the search failed to retrieve all of the information required by the court.

Audio and Video Search

The full potential of multimedia content is often not utilized due to the fact that it has traditionally taken considerable manual involvement to process. Consequently, intelligence lies dormant in resources such as recorded meetings, training videos and broadcast content. True Pan-Enterprise Search technology automatically captures, encodes and indexes television, video and audio content from any source and provides users with the ability to search this with pinpoint accuracy and treat rich media content in the same way as more traditional forms of information.

Categorize, Alert and Profile

When computers “understand” information, they can start to automatically process it and begin to bring information to the user rather than the other way round. For example, through forming an understanding, computers can automatically create taxonomies, alert users to new and relevant information in real-time or automatically profile an individual’s interests based on what they read and write, offering them interesting information without the need to search or connect with similar people.

Clustering, Scene Detection, Speaker Identification and Sentiment Analysis

Understanding information allows computers to cluster information, identifying inherent themes or clusters of conceptually similar information. In addition, using this approach it is possible to detect irregularities in everyday scenes for security purposes, identify well-known speakers in broadcast media and analyze conversations to detect positive or negative sentiment.

Integrated Meaning Based Computing

In examining the different approaches to the challenge of unstructured information, it becomes clear that the solution does not boil down to plain search. It is only through understanding the meaning of ALL information that computers are able to automatically process it and provide users with the ability to handle and maximize the value of this rich resource. MBC addresses the full range of information challenges and consequently forms the central requirement of major enterprise deployments all over the world.

More information on HP Strategy

HP Sets Strategy to Lead in Connected World with Services, Solutions and Technologies [March 14, 2011]

The convergence of cloud computing and connectivity is fundamentally changing how IT is delivered and how information is consumed. Powerful trends like consumerization, cloud computing and connectivity are redefining the way people live, businesses operate and the world works. Traditional on-premise, proprietary computing resources are gradually being complemented and even replaced by the massive, agile and open computing resources of the cloud. Meanwhile, the cloud is combining with mobility to create ubiquitous connectivity.

In HP’s view, a hybrid environment that combines the best of traditional environments with private and public clouds will be the prevailing model for many large enterprises for a long time. With its leading services portfolio, HP is well positioned to be the trusted partner of customers as they move from the traditional to the hybrid world. [HP Chief Executive Officer Léo] Apotheker committed to continue enhancing HP’s offerings across its broad hardware, software and services portfolio to meet evolving customer demands while also leveraging its core strengths to develop the cloud- and connectivity-based solutions of the future to meet the needs of consumers, small and midsize companies and large enterprises. This includes becoming a leading provider of cloud-based platform services.

In his presentation, Apotheker examined the impact of industry trends on users and businesses, and how those trends can best be met through HP’s portfolio, core businesses and scale. Of note in the speech:

  • HP announced it intends to leverage its position as a leading provider of cloud technology to develop a portfolio of cloud services from infrastructure to platform services. HP also signaled it plans to develop and run the industry’s first open cloud marketplace that will combine a secure, scalable and trusted consumer app store and an enterprise application and services catalog.
  • HP intends to build webOS into a leading connectivity platform. As the world’s No. 1 maker of PCs and printers, HP has the potential to deliver 100 million webOS-enabled devices a yearinto the marketplace, and HP plans to use that scale along with leading development tools to build a robust developer community that is eager to access every segment of the market and every corner of the globe.
  • At the event, highlighting an increasing focus to bring innovation to market faster, HP demonstrated a new “big data” appliance, leveraging the unmatched performance of HP computing power mated with real-time, high-speed analytics from Vertica Systems, which HP recently announced its agreement to acquire. HP expects to close the acquisition in its second fiscal quarter and have the HP-branded appliance ready for market immediately thereafter. The proposed HP Vertica solution will offer a choice of delivery options – from appliance, to software, and in the cloud.

Strategic priorities

HP’s strategy will be driven across a multitude of initiatives, focused on three strategic areas:

Cloud: HP plans to build a full cloud stack and help transition customers to hybrid cloud environments. HP intends to leverage its scale, reliability and security in its current hardware, software and services offerings. HP also plans to grow its higher-value services that offer greater strategic value.

Apotheker today unveiled the company’s plans to build an open applications marketplace that integrates consumer, enterprise and developer services. The platform will support multiple languages and will be open to third-parties. HP will vet applications for security and interoperability to facilitate an environment that is both trusted and open. A device-aware HP cloud will configure and send the appropriate services to the device that the customer is using, and connected devices will intuitively access services the customer needs.

Connectivity: HP also intends to be a leader in the area of connectivity. HP already has a globally distributed installed base in both the consumer and enterprise, and ships two printers and PCs a second, which will be webOS enabled– this huge, growing installed base of devices provides enormous opportunity upon which to build HP-, customer- and ecosystem-driven innovation. HP and its ecosystem of partners will continue to provide context-aware experiences for consumers, SMBs and large enterprises with secure information creation, digitization, transformation and consumption — anytime, anywhere.

Software: Through a build, buy and partner approach, HP intends to continue to enhance its leading management and security portfolio. Using that as a foundation, the company plans to address real-time analytics for “Big Data,” which is the combination of structured and the much faster growing unstructured data set. Upon completion, HP’s acquisition of Vertica will provide an important asset in this area. HP’s digitization offering also provides important information management capabilities that can be verticalized for specific industries. HP will continue to invest in leading-edge technologies and services that go beyond today’s limited point solutions to protect the modern enterprise and provide the security and information backbone that enterprises rely on for visibility and insight across distributed infrastructures and new hybrid environments.

In addition, Apotheker said HP will continue to build upon its financial strength, with a focus on performance that is expected to allow the company to expand into higher-value offerings, grow share of wallet by creating greater strategic value for customers, deliver on the power of the full HP portfolio and, therefore, feed the company’s core businesses. The focus on performance will come through a program focusing on growth, operational excellence and quality.

HP to Evaluate Strategic Alternatives for Personal Systems Group [Aug 18, 2011]

HP today announced that its board of directors has authorizedthe evaluation of strategic alternatives for its Personal Systems Group (PSG), including the exploration of the separation of its PC business into a separate company through a spin-off or other transaction.

PSG has a proud history of innovation and technological leadership as well as a strong operating track record and industry-leading profitability. PSG is the leading manufacturer of personal computers in the world and had annual revenues of approximately $41 billion in fiscal year 2010. PSG enjoys leading global market positions in consumer and commercial PCs.

HP is implementing a plan to fundamentally transform the company. An important component of the plan is focusing its investments, resources and management attention to drive higher value solutions to enterprise, small and midsize business and public sector customers. HP believes that the exploration of alternatives for PSG will help the company accomplish its strategic goals and pursue profitable growth and enhanced shareholder value. A post-transaction HP would continue to help its customers manage the information explosion and address their most critical needs through a portfolio that spans printing, software, services, servers, storage and networking.

“The exploration of alternatives for PSG demonstrates our commitment to enhancing shareholder value and sharpening our strategic and financial focus,” said Léo Apotheker, HP president and chief executive officer. “In March we outlined a strategy for HP, built on cloud, solutions and software to address the changing requirements of our customers, shaped heavily by secular market trends that are redefining how technology is consumed and deployed. Since then, we have observed the acceleration of these market trends, which has led us to evaluate additional steps to transform HP to meet emerging opportunities. We believe the acquisition of Autonomy, combined with the exploration of alternatives for PSG, would allow HP to more effectively compete and better execute its focused strategy.”

The personal computing market is quickly evolving with new form factors and application ecosystems. Given these realities, HP believes it is in the best interests of the company and its shareholders to explore ways for PSG to position itself to address these rapid changes and maintain its technological and market leadership positions.

“We believe exploring alternatives for PSG could enhance its performance, allow it to more effectively compete and provide greater value for HP shareholders,” said Apotheker. “PSG is a world-class scale business with a leading market share position and a highly effective supply chain and broad reach and go-to-market capabilities. We believe there are alternatives that could afford PSG more autonomy and flexibility to make strategic investment decisions to better position the business for its customers, partners and employees.”



  1. […] Considering all that and after PCs and cloud clients are not parts of Hewlett-Packard’s strategy anymore [Aug 19, 2011] there is no wonder that a blog appeared with apt headline of Has […]

  2. […] Experiencing the Cloud fueled by 3.5G/3.9G, SoC & reflectivity Skip to content HomeAboutBlogroll 2010HydisMobile InternetStatistics ← PCs and cloud clients are not parts of Hewlett-Packard’s strategy anymore […]

  3. […] used to find patterns from a billion records in a couple of minutes, about 9x faster than Hadoop.- PCs and cloud clients are not parts of Hewlett-Packard’s strategy anymore [‘Experiencing the Cloud’, Aug 11, 2011 – Jan 17, 2012] see the Autonomy IDOL related content […]

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