HP CEO Apotheker Outlines Plans but Faces Barriers

HP CEP L??«o Apotheker further revealed his plans for the PC giant. While optimistic, Pund-IT analyst Charles King says HP still faces "significant barriers."

New Hewlett-Packard CEO L??«o Apotheker revealed a bit more about his plans for the U.S. PC giant at a Strategy Summit in San Francisco March 14. Over the next two years, Apotheker told the 350-plus gathered analysts, these will include starting a cloud-computing service enabling developers to create applications for consumers and enterprises; a new, major emphasis on services; and the creation of greater synergies between HP products.

"Everything that we do in the future will be delivered as a service," Apotheker said, according to a report from Bloomberg. "It's the first time HP is trying to put all of the elements of what it's doing together."

Pund-It Principal Analyst Charles King reacted to the Summit in a March 16 report by writing, in short, that "at HP, the adults are clearly back in charge."

HP CTO Shane Robison described what he defined as HP's Cloud System differentiators, wrote King, which include offering a single view of services, support for heterogeneous systems, operating systems and hypervisors, and intelligent and automated management solutions. Robison added that a primary driver of cloud-adoption is expected to be the massive amounts of data that both consumers and businesses are increasingly struggling to manage.

King additionally outlined HP's strategy from three perspectives, saying that, practically speaking, Apotheker's cloud-computing strategy "seems sensible and workable." Innovation wise, HP's partnerships with Intel and Microsoft will offer "numerous synergistic opportunities" and, regarding HP's vision, it's both in line with most IT vendors' and is a welcome departure from the style of leadership shown by former HP CEO Mark Hurd, who resigned last year after being found in violation of HP's codes of conduct.

Nonetheless, wrote King, "the company faces some significant barriers."

"The list of HP's Cloud System differentiators looks like it had been taken directly out of IBM's cloud playbook, though Apotheker doesn't have a concise complementary notion like IBM's Smarter Planet to work with," wrote King. "And, HP's claim that those differentiators (supporting heterogeneous systems, OSs and hypervisors, etc.) somehow make the company's offerings unique is simply silly."

King also doesn't believe that HP's 2010 acquisition of 3PAR will pay off "as quickly or fully as HP believes," and he found HP's software strategy presentation to be a bit thin on details.

Executives discussed the issue in broad terms, "and rightly so, since HP's historical weakness in software was clearly an issue Apotheker was hired to address," wrote King, who for now is giving the company the benefit of the doubt.

"It could be that the lack of detail was a matter of playing their cards close to the vest rather than having no hand at all," he added. "Perhaps HP currently has deals in the works that loose lips could potentially sink. At least one hopes so. Though HP has a decent selection of systems management tools and applications, the revenues they drive are a tiny fraction of what IBM and Oracle enjoy."

Another point of concern came regarding HP's partners. While HP's plan to develop to architect, plan, test and deploy its own services could do wonders for its bottom line, this could leave some of its value-added resellers (VARS) feeling jilted.

"We expect HP has or will develop a plan to minimize those VARs' discomfort," wrote King. "However, if the market truly does develop as HP and other cloud enthusiasts believe, HP VARs who consider themselves locked into second-rate status and out of lucrative opportunities would likely focus their efforts on enhancing and promoting other vendors' cloud solutions."

Earlier this month, Apotheker got the industry talking, after sharing with Bloomberg Business Week its plans to include webOS, the mobile operating system it gained during its Palm acquisition, on every PC it ships beginning in 2012. The Summit, however, was Apotheker's first real face time with his critics, and by most accounts it was a success.

Sharp, ambitious and level headed, Apotheker proved he can craft a workable corporate strategy and present it to a room of critics, wrote King, adding the latter is "no mean feat." Whether Apotheker can now successfully execute those plans, however, is the challenge before him.