Tag Archives: HP

Dinosaur Row

IBM’s cloudy predicament is now widely understood.

BusinessWeek made IBM’s existential crisis a cover story (a concept that doesn’t really exist any more if you read the publication online):

Bloomberg Businessweek (US)

Forbes then called out recently departed IBM CEO Sam Palmasaino for his financial engineering shenanigans with “Why IBM is in Decline”. Cringely went one better with the full Gibbon in his new book “The Decline and Fall of IBM”.

To which I say, welcome to the club!

IBM employees have been crawling out of the woodwork over the last year to defend the holy EPS roadmap (even as Wall Street tells them “um, you might stop the financial engineering games and optimize for survival at this point”). While I have listened patiently, not a single Big Blue booster made an argument based on their product portfolio or confidence in their ability to innovate or adapt. They have a bad case of assuming past performance guarantees future survival.

The most compelling argument I heard from any IBMer was “Well, at least we’re not HP”. HP is in a similar situation as IBM, except a few years behind. On the plus side, HP has less software legacy (there are positives to not being a software company period). I’m waiting for HP to buy Rackspace as their SoftLayer-like “Hail Mary”, except paying more and doing it a couple years later due to the need to rebuild their balance sheet “autonomy”. But a wise man once told me “life is too short to work with HP”, so enough about them. Unlike some other vendors, I don’t think anyone really cares whether HP make the next transition or not.

The storm clouds of creative destruction blow not just in Armonk and Palo Alto. Things also look blustery in San Jose, home of another dinosaur: Cisco (or as I like to call them, “the IBM of networking”).

Cisco has many parallels to IBM:

  • Revenue has plateaued and oscillates between flat and down.
  • Competitive threats abound including fundamental technical and economic disruption.
  • They can’t innovate and have relied on buying R&D for even longer than IBM and to a greater degree.
  • Lots of acquisitions that haven’t had much discernable impact. One can argue IBM has done better with its acquisitions, where they at least milk the installed base for revenue even if the acquired products go immediately into maintenance mode.
  • They have lost the leading edge customers who prefer to build their own switches or rely on other vendors.
  • Their biggest customers may face an existential threat by continuing to rely upon them, facing competitors who don’t have that legacy dependency.
  • Their core competencies have shrunk to browbeating the press (and watch the press pay it back that the dam has finally broken on IBM after years of oppression) and manipulating Wall Street expectations (revenue only down 5.5% – it’s a beat!!!).
  • They are dismissive of the threats they face (a la “it is early days for cloud”) and take their survival and market position for granted.
  • Their product efforts focus on trying to pull innovation back into the old way of doing things (see Cisco’s ACI, which kind of misses the whole SDN point).
  • They believe they can play with the big boys in cloud but on a bonsai budget. Cisco’s Intercloud is another “multi-year, one billion dollar investment” in cloud capex that amounts to about six weeks of Google’s capex spending.

Cisco is flailing all over the place when it comes to communicating their strategy:

  • Competitive bluster and/or schizophrenia: they plan to “crush” VMware who is “enemy number one for Cisco” (but also maintain this SDN thing is not a big deal…). Yet VMware doesn’t even make their slide of competitors today or in 2018, when it seems they plan to compete exclusively with the cream of the late 20th century NASDAQ:

Cisco competitors prediction

  • Misdirection and/or distraction: “Hey, look at this $14 TRILLION dollar market over here. It isn’t just the Internet of Things, it is the Internet of Everything!” I’m a big believer in the Internet of Things (hold the “Every”) but am hard-pressed to understand what Cisco is going to do to capture any disproportionate part of that. Cisco’s IoT executives are so impressed with the opportunity they keep bailing out.
  • Safety in numbers: they would like you to believe their challenges are not unique to Cisco, but plague the whole “industry” (aka Big Old Tech with no appearances from the companies taking share). John Chambers forecasts “brutal” times ahead and provides this handy chart by which to track his self-selected cohort’s misery:

Cisco Chambers Keynote 5 Tech Revenue

Cisco picked the right peers with HP and IBM (aka Dinosaur Row), but Microsoft and Oracle are in a different class as I am sure this time series will prove out over time. We’ll be tracking the “Chambers Chart” going forward.

Strategic Sprawl, We Do It All

HP’s new CEO has unveiled his strategy for the company.  The debut was accompanied by an epic press release.  Some of my favorite parts:

“Connected World” – hopefully Paul Allen won’t call from the 1990s and ask for his strategy back.

“…its vision to provide seamless, secure, context-aware experiences for the connected world” – it probably sounds better in the original German.

“…continue delivering unparalleled value” – that sounds suspiciously like more of the same actually.  So much for the break from the Hurd era.

“…well positioned to win through a compelling combination of financial strength, unmatched scale and global reach, and market-leading positions that span from the consumer to the enterprise” – translation: we’re big and not entirely sure what we do either.

“…convergence” – the 1990s may just want to put HP on speed dial.

“Powerful trends like consumerization, cloud computing and connectivity are redefining the way people live, businesses operate and the world works.” – I’d always use ‘live, work and play’ when composing this sentence.  It rolls off the tongue a little better.

“…massive, agile and open” – massive and agile so often go hand-in-hand.

“…leveraging” – once.

“Meanwhile, the cloud is combining with mobility to create ubiquitous connectivity.” – ’meanwhile’?  Evidently you have to follow multiple plotlines.

“…leverage” – twice.

“…trusted partner” – naturally.

“…continue enhancing HP’s offerings across its broad hardware, software and services portfolio to meet evolving customer demands while also leveraging its core strengths to develop the cloud- and connectivity-based solutions of the future to meet the needs of consumers, small and midsize companies and large enterprises.” – this should really help employees with what NOT to do.

“…trusted leader” – is leader an upgrade from partner?

“…a four-point strategy” – the big decision was whether to have a three or four-point strategy.

“…leveraging” – thrice.

“…core strength in cloud” – you can’t spell Heffalump without the letters H and P.  But ‘cloud’, not so much.

“…trusted partner” – on second thought, partner was better.

“…delivering the connected world” – can I get that delivered to my house overnight?

“…leverage” – not sure what comes after thrice.

“…build a robust developer community that is eager” – you can lead a horse (or insert your own CAML joke) to water, but you can’t make him eager.

“…leveraging” – starting to think this is coded reference to printer cartridge business.

“…unmatched” – true, no other company looks even remotely like HP.

“…a multitude of initiatives” – so more than four then?

“…three strategic areas” – uh, oh, now we’ve lost one. 

“…leverage” – at this point we can just call him Leo Archimedes.

“…higher-value” – higher than what?

“…greater strategic value” – ah, higher in strategery.

“A device-aware HP cloud…” – eServices lives!

“…a leader in the area of connectivity” – look out AT&T?

“The focus on performance will come through a program focusing on growth, operational excellence and quality.” – looking forward to reading the white paper on this. 

“At HP, our mission is to deliver seamless, secure, context-aware experiences for a connected world.” – repeated just in case anyone didn’t memorize it up front.

Here is the word cloud if that helps. 

Can you find 'leverage'?

In HP’s defense, the only thing worse than reading this kind of press releases is writing them.  It is next to impossible to put a coherent and concrete story together that spans all the provinces of vast technology conglomerates, so you’re left with sweeping platitudes.  Been there, done that.

Disclosures: a delighted seller of all my HPQ at $49.

The HP Frenzy

Keep an eye on just how many reporters are getting bylines on stories about the HP corporate espionage debacle.  It isn’t just one or two at each publication.  An incomplete and cursory count reveals 16 different Wall Street Journal reporters with bylined stories.  I don’t think they had that many when they unraveled the Enron fraud. 

 

The press has “flooded the zone” which is really bad news for Mark Hurd as they seem to want blood.  Is there an ending here where he keeps his job?  He missed an opportunity Friday to raise himself above the fray.  Reporters tend to write the news straight but these new-fangled blog things give you a better sense of what they are thinking and he blew the press conference (here and here).  I don’t think Dunn’s scalp will be enough (David Kirkpatrick at Fortune has the most interesting insight into Dunn’s situation and motivations).

 

The other guy in the crosshairs is Silicon Valley uberlawyer Larry Sonsini, whose apparant oking of the HP spying comes on top of his firms’s relationship with almost half of the Silicon Valley companies implicated in options backdating. 

 

It is tough to get meetings with both industry and business press right now because they’re so focused this story.  The reporters who got spied on are getting their just revenge and the ones who weren’t spied upon are even more motivated to show they were in fact worth spying on in the first place.  And we haven’t even had the Congressional hearings yet–need I mention it is an election year?