HP's Redemption: Still a Hardware Vendor

Meg Whitman finally appeared, with pearl necklaces, pearl earrings, grey suit jackets and Hermes scarf-style signature dresses. She took over HP's latest Superbook from Todd Bradley, executive vice president of HP Printing and Information Products Group (PPS). After careful flipping, she smiled happily.

This was the scene of the HP Global Technology Impact Summit held at the Shanghai World Expo Center on May 10th. Whitman did not choose to make appearances at the opening ceremony of the previous day's summit, but left the suspense at the end. Nearly 600 global media reporters and managers from Hewlett-Packard paid close attention to Whitman's every move and hoped that she would “finish” HP’s dramatic changes in recent years.

Conservative therapy Whitman and Todd Bradley stand side by side, from the merger of Hewlett-Packard Printing and Information Products Group to Hewlett-Packard's transformation, from Superbooks to HP's enterprise-class business? Whitman is omnipresent. She tries to tell everyone in the audience what Hewlett-Packard can do - almost everyone can feel that in the field of information technology, HP can do almost anything, even a few worth Ten yuan mouse and a cheap speaker.

At this year's summit, Hewlett-Packard put forward a new strategy that is completely different from before - "Technology is blooming for you." In order to contrast this theme, HP exhibited more than 80 new products at this year's summit, ranging from a mouse to a giant industrial-grade printing device. In addition, Hewlett-Packard also invited people from all walks of life, including costume design, car modification, and film special effects manufacturing, to serve as HP lobbyists. Hewlett-Packard is trying to tell all the audience, HP can provide technical support for all needs.

When Whitman faced more than 600 media and industry opinion leaders from all over the world, she resolutely throws a word: Stability overrides everything! "In the short to medium-term and in the medium term, HP must first ensure stability. Reshaping must be achieved through many aspects. We adhere to the corporate culture promoted by product and technological innovation," said Whitman.

In the second half of 2011, Li Aike, who was then the HP CEO, announced that he had to give up webOS, spin off the PC business, and invest heavily in software company Autonomy. Then he was forced to resign in less than a month. Whitman stepped in, and now she decided to let HP return to the origin. The biggest decision she took after taking office was to keep HP's PC business.

Whitman thinks, HP's business line is very long, including PC and printing, service, software, overall solution and so on, for HP, every business line has its unique charm and characteristic. "We will not turn HP into a pure software company. We will not be like the IMB." Whitman's response was unusually firm compared to a few months ago.

In fact, Whitman's reply above implies that she denies Lee Ai Ke's attempt to turn HP into an IBM-style company. She has realized that it is not practical to imitate IBM completely, even though HP’s hardware profits It is continuously decreasing, but this business unit contributed almost 1/2 of the revenue of HP Group.

HP's 2011 financial report shows that net revenue for the fiscal year 2011 was $127 billion, and the total sales of imaging and printing group and personal systems group in 2011 reached $65 billion, accounting for more than 51% of HP's total sales; The profit is 6.3 billion U.S. dollars.

In the era of Apotheker, HP's hardware business was considered a "burden", but Whitman apparently did not think so. "HP will not become a pure software company. This is our very clear company strategy." In Whittleman's eyes, the hardware business, like software and services, is the pillar of HP's continuous development, and recently announced PC and Printing department consolidation is the first step for HP to revive its hardware business.

Whitman is well aware of the benefits of the merger of the PC and printer divisions. On the one hand, the combined business group can face the channel and customers in a unified image, which is conducive to HP's understanding of customers more directly and the introduction of more suitable for customer needs. The hardware products; on the other hand, the merger of the two departments has saved HP a lot of money, and this also laid the groundwork for HP's next step in "improvement."

HP decided to put the savings in human and financial resources into the most worthwhile sectors, such as R&D. In an interview with reporters, Zubair Iqbal, general manager of the China R&D Center of the Global Personal Computer Division of the HP Information Products Group, said that his department is currently recruiting and expanding teams.

In addition, after the merger of IPG and PSG services, personnel adjustment is also imperative. VioMesh Josh, former head of HP IPG, has already left the company, and the merged PC and printer division will be the executive vice president. Todd Bradley is responsible for leadership, and this is just the beginning.

Mild Redemption and previous CEOs are different from HP's surgical changes. Whitman prefers a gentle way for HP to make a change. The effect she hopes to see is a progressive and silent style. reform.

When Whitman confronted the question "hardware is dead", he told sceptics, "The IT industry is still inseparable from the hardware, and HP has a huge advantage in the richness and scale of hardware products." Whitman's position to Hewlett-Packard is: The world's largest technology provider.

Whitman said, "We need to strengthen our core business strength, strengthen our software business, integrate assets, and maximize our return on investment." This statement rightly describes Whitman's strategy for HP through cloud computing and mobile The Internet and Big Data have transformed the company’s core computer, printer, and enterprise-level businesses, eventually reaching the goal of “technology blooms for you”.

This should be the most persuasive strategic idea that HP is facing in the face of technology trends in cloud computing, mobile Internet, and big data. Whitman believes that regardless of cloud computing or the mobile Internet or big data, Hewlett-Packard has long been in the corresponding field layout, but HP's intentions are not clearly exposed.

The shape of the PC is changing now, and the boundaries between individuals and business users are also blurred, and HP needs to reposition its PC strategy. The mobility and connectivity of hardware products have become an irreversible trend. Whitman said that although it has now abandoned the webOS, but HP will restart the tablet PC business, HP will actively cooperate with Microsoft in October this year to launch the Tablet PC loaded with Windows 8.

"PC is a device that enters the digital age in the information era." Whitman believes that the post-PC era is only a change in the form of the PC. This does not affect consumer demand for PC products. Hewlett-Packard will launch more. Diversified products for consumer needs, including ultrabooks, tablets, and thin clients.

In fact, the profits of the PC industry are getting thinner and thinner. This is not the predicament that the HP family faces. HP has long been trying to change the low value-added status of hardware products. For example, on the printer side, HP introduced the Envy 100 e-all-in-one printer, which is unusually small and can fit into a briefcase. In addition, it comes with an iPad-like control panel. Users can Directly connected to the Internet to download documents from the cloud for printing; in terms of cloud computing, HP said it is actually the world's largest private cloud provider.

In addition, as part of the restructuring plan, on May 24, HP announced layoffs of 27,000 people, accounting for approximately 8% of all employees on October 31, 2011, and layoffs until the end of fiscal 2014. This is considered to be another "self-saving" initiative by Whitman after it announced the merger of the PC and printer divisions.

HP's move was recognized by the market. HP shares rose 10% in after-hours trading. Analysts with investment banks commented: “Although we believe that HP has not solved all problems, we see that they are moving in the right direction.”

HP stated in its statement that the restructuring is to streamline business processes, improve innovation, and bring better performance to customers, employees and shareholders. It is estimated that this restructuring can save HP's annual expenditure of 3 billion to 3.5 billion U.S. dollars in fiscal year 2014.

In addition, the savings will be invested in three strategic focus areas that will lead HP's future development: cloud computing, big data and security, and other growth potential units. Although the current advantages of HP in these areas are not obvious, but only in this way Hewlett-Packard can "reshape" HP's survival but deteriorating hardware business through these areas.

“In order to improve execution, use funds for enterprises, and maintain the long-term health of the company, layoffs are necessary.” Whitman said that HP has established a route to expand its global leadership position and create maximum value for customers and shareholders. She hopes that Hewlett-Packard will achieve a magnificent turn and come out with a different path from IBM.

Rebirth?

Everything looks superb on the surface, but it will not be easy to get back the "HP Way". In the announcement of layoffs on the 24th, HP also announced second-quarter results for fiscal year 2012, with revenue of $30.69 billion, down 3% year-on-year, and net profit of $1.59 billion, down 31% year-on-year. Although this figure is better than the 44% drop in the previous quarter, it still cannot stop HP's PC and printing department from declining.

In stark contrast to Hewlett-Packard, its main rival Lenovo’s financial report looks much better. In the fiscal year of 2011, Lenovo Group's revenue increased by 37% from the same period last year to US$29,574 million. Sales volume of personal computers with direct competition with Hewlett-Packard PPS Group rose by 35% year-on-year to 47.60 million units, with a global market share of 12.9% in the world. The market share of China's largest PC market has reached 1/3, while HP's current PC market share in China is only about 5%.

Some analysts pointed out that if HP's PC business to continue to maintain the title of the world's first there must be a breakthrough in the Chinese market, otherwise, HP Lenovo beyond just a matter of time. In response to HP's lag in the Chinese market, Whitman said in an interview with reporters that, on the one hand, the instability of the board led to tactical errors in the Chinese market, and on the other hand, due to insufficient investment in research and development, HP is changing the ambiguity in the Chinese market. Situation, but the effect may be difficult to see in a short time.

In addition to the challenges faced by Asian companies such as Lenovo in the PC market, HP's former "horizontal model" that was proud of its enterprise-class market has also been criticized. As it is located in the hinterland of Silicon Valley, Hewlett-Packard has followed up on new technology trends quickly, made allies, embraced industry standards and partners. However, as the HP frontier is getting longer and longer, many of its businesses have formed a direct competitive relationship with its partners. When HP faces competition from vendors such as Oracle, IBM, and EMC, HP can hardly be competitive. product.

HP's second-quarter 2012 financial report shows that service revenues fell 1% year-on-year; revenue from enterprise server, storage, and networking (ESSN) divisions fell 6% year-on-year; and only HP software remained the same with revenue growth. It grew by 22% and operating profit margin was 17.7%. This positive growth came from the acquisition of software company Autonomy.

As the leader of the global PC market, HP had pinned its hopes on webOS to lay out the mobile Internet market, but ultimately failed due to the sway of HP's high-level strategy. Now, HP has made it clear that it will implement "euthanasia" on webOS and devote all of its efforts in the field of tablet PCs to Intel and Microsoft.

Todd Bradley believes that today's IT environment has changed, with more emphasis on device mobility and connectivity, and the market is shifting from hardware consumption to content sharing. HP has an advantage in terms of content creation, storage, and sharing.

Some analysts pointed out that through layoffs and departmental reorganization, Hewlett-Packard has more clearly defined the future direction of its PC business. Through business restructuring and other measures, the HP PC department's design and technology development capabilities have been improved and improved. More importantly, the HP PC division has been able to launch products for the different needs of various markets around the world. For example, HP decided to use the Microsoft Windows 8 operating system in its tablet PC products and strengthen cooperation with Microsoft in personal cloud ecosystem services, which will help HP to enter the business tablet market;

Hewlett-Packard is now trying to capture the "results" of cloud computing, mobile Internet and big data. If used properly, these wave of technology may make HP rejuvenate. For example, strengthening cooperation with Intel and Microsoft, and relocating the manufacturing bases of PCs and printers to the labor force has advantages in Chongqing, China.

In addition, what is even more crucial for HP is to make the necessary changes to the "horizontal model" that Kally had insisted on in order to cope with this already flatter environment. Hewlett-Packard needs to step up its efforts to shape its "one-stop solution platform" and avoid becoming a huge store with everything.

Whitman does not seem to hide the position that Hewlett-Packard is still a hardware manufacturer. Through Whitman's "stability" strategy, HP is returning to normal development. She vowed to push HP to the peak of success in his term of office.