Does HP Stand for Horrible Plan?
After a year of bad decisions, is Hewlett-Packard finally making progress?
It seems like only yesterday the tech giant launched its first tablet, the HP TouchPad. At first glance, the TouchPad looked like a solid iPad clone. But with a $500 price tag, consumers were not eager to purchase a product that was inferior to Apple's (NASDAQ: AAPL) offering, which sold for the same amount.
The TouchPad only became a hit after Hewlett-Packard dropped its price to $99. But at 80% off, was it really a successful device, or just a case of consumers appreciating the value of a steep discount?
All in all, the TouchPad could be forgiven. But the company's decision to cease PC manufacturing was a little harder to swallow. But even after announcing that the company will not sever its PC division, HP still admitted that Apple will lead the market in 2012.
What a great way to end 2011!
Actually, it wasn't. But the company is trying to improve its situation – or so some analysts believe.
One of them is Trip Chowdhry, the Managing Director of Equity Research at Global Equities Research. In an incremental update on Hewlett-Packard (NYSE: HPQ), Chowdhry said that the company is correcting its corporate strategy and investing heavily into its software division. “The results may show up 6-8 months from now,” Chowdhry wrote in his report.
“HPQ is correcting its strategy to be the comprehensive IT Solutions provider. [The company's] strategy is now getting focused on the following three categories: Datacenter IT, Enterprise IT, and Office IT.”
Chowdhry feels that Hewlett-Packard's strategy is being designed to counter Cisco (NASDAQ: CSCO), “which has limited focus and lacks IT management tools.”
“Cisco Unified Computing System lacks the IT management solution,” Chowdhry continued. “Cisco currently OEM's BladeLogic management solution, but BladeLogic, which was recently acquired by BMC (NASDAQ: BMC), provides IT management for only Datacenter and Enterprise.”
Within three to six months, Chowdhry believes that Hewlett-Packard will bring private and hybrid cloud offerings to the market. “HPQ is currently working with OpenStack for [an] IaaS (Infrastructure-as-a-Service) offering,” Chowdhry wrote. “HPQ is currently working with VMware (NYSE: VMW) Cloud Foundry for PaaS (Platform-as-a-Service). HPQ has backed OpenStack and this is causing HPQ to gain market share in Rackspace (NYSE: RAX) datacenters.”
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