Wall Street has been waiting on the edge of its window ledge seat to see how IT giant Hewlett-Packard performed during its first fiscal quarter of the year. And they can finally relax. HP reported sales of $28.8bn, up 1.2 per cent, and net earnings came in at $1.85bn, down 13.1 per cent compared to the year-ago quarter. Just …
Not just the economy
All is well and good to blame this on the economy. but with Virtual Systems taking over the data center, We had to see the decline in "units being sold" sometime. I think this has as much as a factor as the economy. Again, its a shift in strategy. Why buy a new server when you can setup a VM on existing resources? And with all this "cloud" talk, is it really that surprising? No.
HP gets what they deserve
Of course these numbers only make sense when compared the performance of HP's competitors but it would appear that HP has been hit harder. My guess is that they pay a loss of confidence from their large account customers. I don't know about you other HP corporate customers around the world, but here in France the quality of the support we pay dearly for has dropped below the floor. Corporate customers now get to call the same hotlines (outsourced overseas) as Joe Inkjet buyer calls. Calls are lost, qualification is laughable, spare parts come DOA, field technicians (from subcontractors) completely untrained. I work for a large group of government hospitals and the feedback from all sites is the same : HP support sucks. Seems to me that they're quite likely to loose us as customers quite soon.
Hurd doesn't get it.
Hardware companies like HP just put products on shelves, and people buy them. Hurd can cut jobs there, and buyers won't see any difference.
EDS, being a software company, on the other hand, have customers who are getting a service (and this is not the place to dicuss whether it's good or bad service) that will be harmed when Hurd cuts jobs. It's already happening, but more cuts are on the way.
Hurd gets his bonus anyway, but this time he kills the goose that lays the golden eggs. He won't spot the difference until it is too late for EDS's customers (us, ultimately) to stop him enriching himself at the expense of destroying projects we need.
Nothing about the pay cuts yet? Slow today.
Re: Hurd doesn't get it. @AC
First, let's clear some basics in IT business. EDS is a services company. Microsoft and Oracle are software companies. HP has a hardware, software and services businesses. Ditto for IBM.
Paris, coz her services arm may change software to hardware [and, for some, vice versa].
Feels like another Stanford experience to me.
Hurd is asset-stripping EDS to keep the HP share price artificially high and himself in a job, otherwise he would have been on his way six months ago. This way he gets another year, albeit at a slightly reduced base salary, no doubt enriched by the share options EDS and HP staff are no longer able to buy.