Just reading on the whole HP thing and completely shaking my head.  On a larger scale, this whole thing is about (in my opinion) a growing problem in Western companies: the need to bet the farm on huge gambles instead of slow and steady but assured money.  The former might net you more, but if you fail, you're screwed; the latter isn't as glorious but it brings in a decent chunk of change. 

But we're going to talk about the shorter end here: it’s rather interesting that if you read the financial news, this is the greatest thing that ever happened to HP; but if you read the tech news, this is a clear and complete failure.

Leo Apotheker (CEO of HP) is trying his utmost to turn a hardware company into a software one; part of me suspects it's because he comes from a software background and only feels comfortable with that.  But instead of learning the job and growing with it, he convinced the shareholders of the world's largest PC maker – let me repeat that again, the world's largest PC maker – that PCs were a dead-end and that they would make bundles of cash if they just went in the software direction.

So then why the hell did they buy Palm?  Why the hell did they spend 1.2B on Palm, then another 5B to develop new products, put them on the market with subpar hardware, then only give them two months before ending everything?  Two months?  Really?  Two months is a limited trial run, not the entire run of your product unless you meant it to fail.

A quote from Bloomberg magazine says it all:

Fixing WebOS would have taken capital that could be better used elsewhere, [Apotheker] said.

If that was the case, then it was broken to begin with.  If that was the case, then why bother spending the money at all?  This strikes me as a double ended failure of both a CEO throwing a half-assed attempt to do something with hardware so he could say “See?  I tried and it didn’t work.  Now let’s do it my way.  And I promise we can print money with it.”  And the shareholders, admittedly tired of the errors committed by Carly Fiorina during her term and the cost-cutting-to-the-bone done by Mark Hurd, they were looking for someone who would right the ship.  Instead, they now have someone who’s willing to destroy the ship to build a new canoe and hopes it will float.

During the press conference yesterday, a reporter from Reuters was said to have exclaimed regarding HP’s purchase of British software company Autonomy, “You’re paying a fantastic price.  And I mean that both ways.”  Time will tell if the latter meaning is what history will write on HP’s liquidation tombstone.  A point made on the Ars Technica website is rather compelling:

Pamel wrote:

SinclairZX81 wrote:

IMHO, a huge, gigantic, colossal mistake. Another software guy that doesn't realize that people start with home machines and work their way up, and tend to remain loyal to the brands that they learned upon.

HP will be a shell of its former self in a few years, and we'll be reading articles about how it was bought by some other firm, with reflections on its past as a giant.

This exactly echos my thoughts on it. It was a profitable division, so keeping it didn't really hurt, but they also gained absolute brand recognition. HP couldn't advertise itself out of a paper bag, so its PC division was the only thing providing them with the crucial brand recognition.

In a decade, unless they manage to do something absolutely amazing in the software and services side (unlikely because they're not a software company) they'll be picked up by some company desperate for what little brand recognition they have left, which will then advertise heavily to remind people who HP is   

I couldn’t agree more.  This year at Megami, we did hardware upgrades.  We replaced two failing desktops and one outdated laptop with HPs.  We replaced two printers with a single beast of a network printer, again by HP.  It’s fair to say that we went with HP because we thought they stood for quality and long-term stability.  Now?  Well, next year we’re going to be upgrading the scanner and probably buying a small server for network storage – and I can tell you, we probably won’t go with HP.  Yes, I’m sure whomever buys the HP consumer/smallbiz division will keep things going and honor previous warranties.  But the “halo effect” of HP quality will no longer be there.  As mentioned above, Sinclair is right: people start with small systems and work their way up.  We’re currently on Elites and Pavilions.  The next cycle, we may have moved into the Envy-level equipment.  But not now, and in the future, when Megami is big enough to need large servers and large-scale networking tools, we’ll look elsewhere.  And I can guarantee other people and companies are thinking the same thing.  And it’s showing: as of this writing, HP’s stock has plummeted by nearly a quarter of its whole value because of the announcement.

There are a lot of problems with HP right now (some of which are the stockholders who own it), but one thing is certain: having a CEO who has no interest in the company’s core competency yet wants to bet the farm on an entirely different industry is a CEO who does not need to be there.  Apotheker needs to go before he takes the whole company with him.