HP: Big Changes

HP is looking to shut down its WebOS and PC lines of business. There have been stories that HP has not had much fun with these lately but they’ve barely started with WebOS and they are Number One in PCs. What’s up?“Exploring strategic alternatives for Personal Systems Group; shutting down operations for webOS devices and exploring strategic alternatives for webOS software”

In Q2, HP reported tiny earnings even though revenue was $billions for “personal systems”. They could well be willing to shift all that to China… the same way IBM did. Lenovo is loving it. Perhaps they could take the business off HP’s reluctant hands. It doesn’t seem Q3 is all that bad. Perhaps they just want larger margins.
“Third quarter net revenue of $31.2 billion, up 1% from the prior year quarter and down 2% when adjusted for the effects of currency
Third quarter GAAP diluted earnings per share up 24% with non-GAAP diluted earnings per share up 2% and cash flow from operations of $3.2 billion”

I’ve noticed lately that their heart isn’t in it. Wyse has taken over first place in thin clients. They were just charging too much for a small cheap computer.

HP has new leadership. Has he no heart for the lowly PC?

PS: I’ve had an afterthought: M$ could be losing a huge partner in Wintel here. HP has proven there’s not much money in being M$’s partner in Wintel. Perhaps the next owner of the business will drive a harder bargain or even run GNU/Linux straight away… Either way this could cost M$ money or share.

About Robert Pogson

I am a retired teacher in Canada. I taught in the subject areas where I have worked for almost forty years: maths, physics, chemistry and computers. I love hunting, fishing, picking berries and mushrooms, too.
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18 Responses to HP: Big Changes

  1. I have stuck ordinary DDR400 in an IBM x-series speced for ECC-only and had it work. Never used VA-Linux stuff though. The vast majority of memory modules are industry-standard stuff certified to work with the particular hardware. Chips these days have the memory controller on-chip so its hard for the server to specialize on particular RAM if it’s plug-compatible.

  2. oiaohm says:

    Robert Pogson you are not a high end server person so not knowing why the ram sticks is normal.

    Its really a laugh and a rip off.

    “Sun Linux Server LX50 systems” Yes that is an official name of server you can order. Same with “VA Linux Server number”

    Those are officially referring to particular blocks of hardware. And nightmare of nightmare of you want you warranty on those hardware you must use certified replacement parts. Even if the part is complete same other than the certification sticker you void warranty.

    So yep certified can go for twice to 3 times the normal price.

    OS-agnostic those server particularly the VA Linux ones are in lots of cases not OS-agnostic. VA Linux ones can have linux kernel loader is in the bios chip as well as no other OS drivers. Forgot trying to use grub or load windows on them directly on lots of them. Yes the X86 hardware that makes windows people pull there hair out when they decide to reformat one windows. Good fun when you have a old one and a person who says Windows runs on everything x86 leave them for a few hours of screaming as nothing works for them.

    Yes VA Linux Systems is one of those companies out there that makes Linux only systems.

  3. Sears solved the problem. Apparently, because I am outside USA they generate the “not found” result. They don’t ship any GNU/Linux products outside the USA… Really strange because some of the hits were RAM sticks and the like that are OS-agnostic…

    Perhaps my inquiry will shake up their website a bit…

    If I select “USA” as a country, I can find Linux stuff:
    Search for Linux on sears.com including Wyse thin clients and Asus boxes. Web sites work in mysterious ways. Maybe the Sears guys took the same course as Dell, “How to Confuse Consumers”.

  4. Many millions of people have chosen Linux. Linux is recognized. Such organizations as newspapers write about it. It’s on TV. Linux is a celebrity. In the past month the Wallstreet Journal has mentioned Linux 190 times. Are all those investors and businessmen that read WSJ shaking their heads and saying WTF is Linux? Nope. They recognize it. Sears mentions Linux in their ads. They would not do that if it were nonsense to customers.

    Interestingly, I went to sears.com and searched for linux. A page loaded with hits and a second later was replaced with a page stating, “Sorry we were unable to find a match for “linux””. Strange. Their search engine obviously knows about linux but someone chooses to overrule it… Here’s the screen capture.

  5. I have watched a bit of TV lately and Android/Linux is all over. Doomed? Not.

  6. Contrarian says:

    “IBM does not deal much with the public …”

    Well, you proposed that “Linux has IBM as Madison Avenue”, so it is no surprise that no one knows about Linux since their chief publicist “does not deal with the public”. That is what has doomed Linux to non-recognition certainly.

  7. oe says:

    I remember seeing this boo some time ago. It was an informative read, thanks for the reminder.

  8. IBM does not deal much with the public except for the Smart programme. They deal with large businesses, governments and such organizations that use a lot of IT and like some help designing, managing and implementing change. GNU/Linux is on the table when choices are made unlike many retail shoppers. IBM has thousands of customers, 400K employees, and 15000 Linux customers. Most of their customers use some Linux but many use GNU/Linux on desktops and thin clients. IBM helps them identify which roles are suitable/easy to migrate to GNU/Linux and what is involved in detail. Read the book.

  9. Contrarian says:

    “They’ve written books about migrating to GNU/Linux”

    And that is a sign of being the “biggest promoter” of Linux on the desktop? Perhaps, but it does not seem to be very effective. My local library does not have a copy to loan and I didn’t see it on the best seller rack at Barnes & Noble. I don’t think that sort of promotion is as effective as the case logos or the TV ads. IBM is just not reaching the people with that tactic.

  10. GNU/Linux has IBM as Madison Avenue. They invested heavily and advertised GNU/Linux. Today they are one of the biggest promoters of GNU/Linux but they do it fairly quietly in meeting the needs of customers. They’ve written books about migrating to GNU/Linux:
    see Linux Client Migration Cookbook Version 2

    That kind of thorough analysis, eating its own dogfood and fighting SCO v World did a lot to prove GNU/Linux was worthy.

  11. Contrarian says:

    “Too bad Linux doesn’t have Madison Ave. ”

    You have to pay to play, #oe.

  12. oe says:

    Most folks I talk to think of the Other OS as like GM cars of the 70’s, which is to day not well. Apple OS on the other hand is seen like a European sports car, expensive, flashy but not very practical. Too bad Linux doesn’t have Madison Ave. behind it, you either stumble into it through pure luck, word of mouth, or are so tired of the two main alternatives you actively look for it (and those two main alternatives certainly try to suppress it…)

  13. oe says:

    Agreed I really think HP had a chance to break in with WebOS based PC’s and was a large enough OEM they could have bucked Redmond. Further bolstering their position, it seems they sell in vast volumes to enterprises who put their own OS images on the machines anyway so losing “preferred status” with Redmond really would have only dented their consumer Windows PC line, but that’s where WebOS might have come in to sell in smaller volume but at better margins.

  14. They certainly did not promote WebOS nearly enough. They said they were going to put it on all PCs but they did not. I think more persistence would have paid off. An old established business like HP should have the vision to introduce new stuff and make it happen without knee-jerk reaction to the sales-figures. Every product has zero sales until it is released. That does not mean every product will fail.

    The PC division like any hardware maker is in strong competition and M$ takes the largest share of the profits. HP has a huge loyal following and HP was doing well but the margin was tiny. HP needed to lower prices and the only way to do that was to ditch M$ which many of their customers depended on via lock-in. I think IBM had the same reasoning. Why fight M$ when the system is rigged? Rather than ditch PCs I think HP should have started producing small cheap computers without that other OS. They would sell a lot.

  15. Richard Chapman says:

    I have to admit I can’t quite grasp all the permutations of HP shedding their hardware division. Not that I think HP is making a mistake or anything like that. It’s just that there are too many variables. I thought WebOS was going strong for them. Maybe it was and they used it to build independence into the division. How much would it be worth with if they went with Windows 7 alone? More or less? Or maybe like Contrarian said, the OS had nothing to do with the sale.

    What kind of company does HP want to be if not a hardware company? I believe this will mark a tectonic shift in the industry. It will completely reform not just HP but the company who ends up with their hardware division as well. In a way this is going to be really interesting. It’s going to shake things up. And when you shake things up it’s usually the entrenched players who end up holding the bag.

  16. Contrarian says:

    “Conspiracy theory anyone?”

    Sure. What else?

    The Palm was ahead of its time and in the confusion was passed in popularity by Apple. End of story. This isn’t about OS anyway. No one who buys a phone cares about the OS. They either want and iPhone or they will settle for something else to save money. HP cost too much and didn’t do enough.

  17. Will says:

    My tinfoil hat isn’t on that tight. It does strike me as strange, but let’s just see what happens.

  18. kevin says:

    Seems fishy to dump a profitable portfolio.

    Maybe they’re getting ready to sell off this division to M$. Or they’ve been paid to do so by M$/Apple so that there is no webOS… Conspiracy theory anyone?

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