Total Pageviews

Monday, April 8, 2013

Suggestions on how to save HP

As an ex-HP guy of 10-years standing, who is now an IBMer just want to put forward a simple plan for how to 'save' HP.

Sell the PC business to Samsung, Lenovo or Google
As IBM did with the PC business a few years back HP needs to get out of PC's.  HP has retained the Compaq brand for shelf space in large retailers, so my advice is to sell the PC business under this name which makes single digit profit margin to the likes of Samsung, Lenovo or Google.  The funds would right the balanace sheet and allow the business to exit the consumer market.  HP needs to retain the workstation and thin client business and scale down to focus on these high margin elements of the PC segment.

Get out of Printers!!!
Again being in the slowly declining but highly profitable printer business leaves HP exposed to the consumer market.  HP needs to retain printer maintenance and services, but exit the hardware and cartridge business.  The funds from this business would again aid the balance sheet.

What is left?
The business that is left is squarely focused on the corporate sector and has a healthy balance sheet.  With the war chest from the divestments HP can then go spending on acquiring software businesses in the space of Big Data, Analytics, Security and Cloud.  This would leave IBM focused on datacenter servers, storage, networking, consulting and outsourcing as well as software.

What to buy with the money?
Get serious about another segment in the software business, my suggestions would be:
  • Symantec
  • SAP
  • Salesforce

These would all be expensive, but with the war chest from getting out of printers and PC's these acquisitions would be possible.

A hardware/software alternative would be to buy EMC/VMWare this would consolidate HP's position as number 1 in Enterprise Storage and they get the highly profitable VMWare...

In Summary
HP needs to be an enterprise focused IT player that innovates, rather than a dual focused enterprise/consumer company, because at the moment they are failing to execute on both fronts...

No comments:

Post a Comment