Apotheker Sets Hewlett-Packard on a Cloud-Centric Path
Before today, if you were going to pick one key weakness at Hewlett-Packard, it might have had something to do with the perception that HP is not a cloud computing company.
At yesterday’s big HP Summit in San Francisco, CEO Léo Apotheker seemed to want to turn that perception on its head. In his first public comments on the strategy he’s going to pursue at HP, he said that HP will launch its own public cloud service platform and a related open application store.
While offering cloud computing services would be a new venture for HP, Apotheker took pains to portray the move as playing on HP’s existing strengths in hardware, reminding the audience that seven out of the 10 largest cloud computing providers are HP customers already. How might those customers react to the prospect of having a key supplier transform itself into a competitor? Apotheker deflected the question, saying in a press conference after the event that the word “coopetition”–the combination of cooperation and competition–had been coined specifically for the tech industry, where partners in one line of business find themselves competing in another. “We will continue to be a good partner to all our existing partners,” he said.
Additionally, he added some detail to previously discussed plans to make a significant push around webOS, the mobile operating system HP picked up in its acquisition of Palm. The TouchPad, a tablet running webOS, will begin shipping in June, he said. After that there will be “wave after wave of technology coming out to support webOS.” The OS will be installed alongside Microsoft Windows on all HP PCs beginning later this year. Apotheker said HP plans to ship 100 million webOS devices, including tablets, phones, PCs and printers. Given HP’s market share in PCs and printers, it’s a number that doesn’t seem hard to reach. Tablets and phones are markets where HP is either behind or as yet not participating.
Speaking of coopetition, how is Microsoft going to react to that? Just fine, Apotheker said. In fact, webOS will take advantage of certain aspects of the Windows operating system. “Just to be clear: Microsoft is a great partner and will remain a great partner,” he said. And HP will continue to ship tablet devices running Windows in addition to those running webOS.
Additionally, he reiterated his pledge to buy software companies, but offered few clues as to what companies are likely in HP’s crosshairs. He did, however, demonstrate what HP is doing with its most recent acquisition, the start-up Vertica. He said that HP plans to offer an appliance running Vertica’s technology for analyzing large sets of unstructured data, sometimes referred to as “big data,” in addition to dedicated analytics software that runs both on a company’s own equipment and in the cloud.
HP CFO Cathie Lesjak brought some news to make shareholders happy, saying that Apotheker’s changes should yield $7 a share in earnings by 2014, up from $4.58 in 2010. She also announced that HP would boost its quarterly dividend by 50 percent, from 8 cents a share to 12 cents. She also said the dividend will be increased on an annual basis.
Aside from the mild surprise around HP’s intentions to launch a cloud service–Apotheker was careful not to announce any details about timing–he largely stuck to the script that he previewed in a pre-keynote interview with Bloomberg. And while Apotheker made it clear that HP as he intends to run it will differ in many significant ways from HP under Mark Hurd, there are still as many questions today as there were yesterday about whether or not he’ll be able to successfully carry out the strategy he’s plotted. We’re all going to find out soon.
And in case you’re curious to see the keynote presentation for yourself, HP was has uploaded a video of Apotheker’s 40-minute speech to YouTube, and I’ve embedded it below.
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