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back to article Hardware-happy HP has swallowed a Sun death pill

Leo Apotheker has joined a long line of Silicon Valley CEOs who have struggled to stop their hardware-centric tech companies slipping into the dustbin of history. Hewlett-Packard's chief executive has unveiled an audacious plan to turn his company from the planet's single biggest maker of PCs into, er, a software company. To …

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They bought a shell and some IP

The People that made Autonomy what it is will leave. How long do the founders and visionaries of any of these small companies stay when bought out?

Sidekick

Trolltech

MySQL

HP may have really been facing challenges. But ditching Itanium rather than WebOS would have made more sense.

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Headmaster

And Autonomy's search algorithms don't even work properly to start with...

Anyway, any CEO that speaks of "synergies" should be shot on the spot, no questions asked.

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Ditch Itanium?

No....HP is looking forward to paying higher prices for Intel chips since they will spin off the business that gets them the best prices in the industry because of volume.

Look around all the middleware companies have been bought and HP is left out in the cold.

Unreal watching them make bad move after bad move. Thinking about picking up a touchpad for $99....sure its dead but for that price might be a good web browser for the beach house.

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WTF?

Me too, if I can find one that is.

I figure as stupidly retarded the HP board/Apothos are being SOMEONE out there has to see the value in the IP and design of WebOS, and what used to be Palm.

Hope to god someone sees the value in this software and keeps it going.

I can't believe I will be forced to use Apple or Windows piece of shit phones.

Pre was a great design in style and shape, and is a much better size than the recent android slabs that are not really "pocket" sized anymore.

$1.2 Billion in purchase... and Palm was undervalued at that point. Not to mention the development costs since, and the MASSIVE amount of community contributed apps, + HomeBrew.

Come on a polished OS, with craploads of great apps, runs on Linux, and auto-magically can import and manage all you contacts, todo lists etc, and automatic backups Come on someone has to see the value in this software/hardware

Samsung...Come on I am looking at you, maybe HTC? Hell I'd take Sony over nothing.

[Android will be a suitable replacement if forced I suppose, but they still lack MANY features on even the old Pre. And if Oracle and Apple get there way they will absolutely shut down Android if given the chance (look at recent galaxy embargo). I suppose with the motorola purchase Google will find some way to keep shipping phones, but again I like WebOS.]

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WTF?

The easy way out

The grass is always greener on the software side of the fence. Just ask Unisys, when it went from industry hardware powerhouse to software/services.

It had over 100K employees. What does it have now? 8k?

I see this as HP giving up. They *need* their computer biz (not Itanic) to remain relevant in the IT industry.

I expect the ex-CEO of SAP to run HP into the ground. I expect the company to be 100K employees (from 300K) in the next few years.

Let's hope that the HP board is ousted before the company goes too far down the rathole.

If not, bye-bye HP. I wonder if Larry and Mark will buy you as well?

Probably not.

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Holmes

So who'll be the next weeks pointy haired MBA CEO at HP ?

Looking at the hammering HPQ is getting right now on the NYSE,

20% down this morning (the largest one drop in 31 years)

Apotheker won't get the time to run HP into the ground.

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Oh I do hope

that their other products are less pissy than OpenView.

While I know nobody has ever been sacked for buying OpenView I would ask if anybody has ever made it work anything like it's claimed to.

Though the Solaris version is less shit than the windows version

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FAIL

Oh dear

Has anyone told this new HP boss just how reviled and hated HP's in-house software really is?

Even HP people avoid HP software as much as they can, its all cheap indian-codeshop shite that barely works.

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Happy

Exactly

lmao, this was exactly what I was thinking about this as well...

"indian-codeshop shite" lollerz, u are my hero 8)

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Megaphone

Actually...

Most of it's Chinese these days ... but I feel the sentiment.

HP Software and HP Software Support is some of the worst in the industry - and seems to be getting worse day by day (speaking from long experience here) as they just seem to have abandoned the whole concept of quality of software and quality of support in favour of cheap.

Frankly, if Apotheker does drive them into the earth, whilst being a sad and sorry end to yet another of the industry's giants, HP I feel won't be missed. After all, they're no longer the company that Bill and Dave originally founded and haven't been for a long, long time.

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Thumb Down

Don't worry....

....the good bit of HP is alive and well, it's called Agilent. That company contains the heritage that was built up over 60 years.

Back when I heard that HP was splitting and was going to concentrate on its core business like many engineers I remember thinking "That will be their test equipment business then" but I was wrong, Carly thought it was printers and PCs. And look where that has got them.

It's been nice knowing you HP, but now I anticipate that you will lie down and die.

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Still printing money?

Presumably their printer business (last heard of: about 25% of their value) is still raking it in. As is the printer INK biz, which weight-for-weight must be as profitable as drugs - but, strangely, still legal, for all its abuses.

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Happy

but

I need my in I jus need it oh gawdd where will it come from oh.................

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The traditional post takeover progress of a UK company by a US one is...

Mage,

The traditional train of events when a US company buys a UK company:

1. The Managing Director agrees to stay on to manage the company. He/she is normally gone within a year.

2. Sales and productivity targets are raised, so the bonuses staff have come to enjoy every year disappear.

3. US management teams are sent in to advise. Much time is spent on devising new ways of working, writing endless reports. Typically all the printers and photocopiers run out of ink. Staff stop doing whatever they did that made the company so attractive in the first place.

4. Profits fall off and redundancies follow. US corporations are very keen on head count and will often rehire the redundant workers on a contract basis. That's staff loyalty out of the window.

5. Eventually the organisation either heaves a sigh and dies, or is absorbed into the parent company.

I'm not actually talking about the High Tech sector there, but it applies equally well to them.

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Got it!

Having been through the process, you've pretty much nailed it. I've seen several Cambridge tech companies go down the same plughole, and others circling the drain even now.

American management doesn't trust anyone. Your authority to spend money is suddenly reduced down to something trivial, even though the new approvals process is slow and cumbersome and ruins the responsiveness that made the company so dynamic pre-acquisition. They do not understand UK culture and the working environment and try to manage as if things work the same way as in the US, and so alienate most of the good staff who leave in short order. When it comes to the inevitable lay-offs, half of them don't even realise you can't just fire people over here. The other half have either made the mistake before or are bright enough to listen to their UK personnel department before screwing up.

To those working at Autonomy, I predict three years, five at most. There is usually no change to start with, apart from possibly a logo change and acknowledgement of the new owner on stationery, Then it'll be a new reporting chain where you're now several more layers down from the top, new procurement rules, new rules on timesheets and how you book your vacation (not holiday...) time, etc. Senior management can be very status conscious and do not take kindly to being questioned on their decisions, even when it's an attempt to be constructive, and to start with this can be a source of amusement, at least on the UK side, but it wears off after a while.

Always use UK date format and spellings :-)

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Anonymous Coward

Not just a US problem

@Wensleydale Cheese : "US management teams are sent in to advise. Much time is spent on devising new ways of working, writing endless reports. Typically all the printers and photocopiers run out of ink. Staff stop doing whatever they did that made the company so attractive in the first place."

It's pretty much a universal problem with takeovers. I think the gist of the problem is that large companies attract power-hungry people with the sole aim of promoting themselves (but very little skill beyond politicking). The large company begins to lose innovation and talent as the control-freaks assert themselves, so they buy younger, lighter companies to fill the gap.

Problem is, the same crappy managers are put in charge of the acquired company, and promptly wreak the same havoc there too. This is the reason for all the symptoms you describe, not the nationality of the management. I'm afraid the same control-freakery exists everywhere.

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I second that

My electricity generating company was taken over by a US management company. This happened because the Thatcherite government at the time assumed that we must be a bunch of wankers and needed some US style arse kicking. Take it from me however that we were in fact an extremely competent and intelligent lot and the company was already well run.

So a bunch of American managers arrived. It was soon apparent that in fact *they* were the wankers that the parent company in the US wanted out of their hair, an impression that was re-enforced anecdotally by the remaining UK managers who made trips to the parent co in the USA. Logical, isn't it.

Anyway, on Day 1 our new American director made a speech to us which (paraphrasing) said we were all shit. Yet at this point he knew nothing about us. It was also clear from his speech that he had no idea what our function was, and it was a speech that might as well have been made to a bunch of double glazing salesmen.

In "questions" the end I attempted to point out that we were a trouble-shooting division, not production as he seemed to think, but he did not want to know.

This director was universally loathed, even by the other US managers. It was obvious that the USA end had wanted to dump him on us. The happy ending is that, on a visit to a site, a foreman saw him infringing a safety regulation - minor really, but the rules required him to be escorted off the site, and the local (UK) management did it too! Good for them, one of the four most senior men in a major company escorted off a site by his own security staff ! Just deserts for being a complete arsehole. He went back to the USA after that.

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Joke

Where?

" Having been through the process, you've pretty much nailed it. I've seen several Cambridge tech companies go down the same plughole, and others circling the drain even now."

Any of them, per chance, located at Compass House?

I swear, the place is cursed, cursed I say!*

* Unless, of course, you are one of the 2 people who make a bundle out of the sale.

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Depressingly accurate

Don't forget the bit where the real money making part of the company is shipped wholesale back to the US 'so as to integrate it more fully with our core business'. If you're lucky a few widget makers or telesales jobs are kept over here.

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FAIL

Project Board / Shareholders / CEO

Broken process ?

The shareholders own the company. They vote (each year) on board positions.

The board appoint the CEO.

The CEO drives the company strategy.

The CEO at Nokia has taken radical decisions - it'll no longer be the innovative / Nokia that can differentiate itself. The share price is a fraction of its peak.

The CEO at HP is now doing something similar.

The shareholders will suffer much pain. Was it all their fault ?

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Happy

Yes

Yes. It's their company. They may not care what happens to it of course.

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FAIL

Openview....

I remember a few years back working on a majro Openview and OVPI implementation at a former employer, rippied out Tivoli (which worked just fine) and replaced with Openview.

The whole implementation was a joke, start to finish. The installation of the OVO manager was written for HPUX, so had to be re-written for Solaris (what we were deplying on), the agents which ran on our Unix servers were leaking memory and had to be completely reinstalled, the agents also took it upon themselves to go and change the ownership of core OS directories such as /tmp (removed the sticky bit, caused havoc..) /var/tmp, /opt and maybe a bunch of others.

HP is a company I have zero respect for, they "Invent" bugger all.

Now they want to go and call themselves a software company, off the back of Openview *cough* and now Autonomy's search.

They are up against IBM/Oracle/SAP - All of which have a good RDBMS, good business software and middleware/App servers (SAP has no weblogic/websphere equivalent as far as I know though).

Good riddance to them.

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Ru
Meh

Ahh, the post-PC era

Only, people who still need to do actual *work* will continue to buy PCs, not tablets. It isn't like the whole market is going to shrivel up and die overnight. Do HP really make most of their PC money selling to consumers?

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Well ...

"Only, people who still need to do actual *work* will continue to buy PCs, not tablets."

Given the economy, we may see the end of the PC sooner than you think.

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Linux

PCgeddon

>> Only, people who still need to do actual *work* will continue to buy PCs, not tablets.

>

> Given the economy, we may see the end of the PC sooner than you think.

The economy will end sooner than the PC does.

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Jobs Lost/Gained....

So, I just wonder how many jobs gained and which country they will be in and how many lost and which country will lose them....

But hey, these ARE the "job creators" for the U.S. after all...which is why they need tax breaks...

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Facepalm

Down voters?

I am just assuming the down voters didn't get the irony of your style.

Manly for the yanks, "Irony" it's like "Tinny", but harder.

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FAIL

Elop made the same mistake with Nokia

They want to have the sucess with the new company that they couldn't achieve in the last one but instead of making new company the best it can be they cut off all its roots and drag somewere to slowly die.

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Pint

Weird - article didn't mention "ink" even once

Personally, I imposed a lifetime ban on all HP products ever since Carly Fiorina opened her idiot pie-hole. It'll be nice to get the HP junk out of Costco so I don't even have to look at them.

Sad, because I really like(d) HP test equipment.

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You can still buy HP test equipment

It has an Agilent sticker on it but it's designed and build by the same people who made it at HP. They have Agilent badges now. It's still really good.

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Happy

Agilent is doing OK....

HP's test equipment division has been known as AGILENT for quite a few years, and they are doing OK.....

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Windows

Synergy!

I flashbacked to 1999.

Synergy!!!

The doctors recomends it!

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Whither EDS... or wither EDS??

So where does EDS fit into this now - far more bloodware than software given the people-intensive nature of customised outsourcing. Is that the sort of "services business" Apotheker wants, or are they also back on the M&A rollercoaster, I wonder...

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FAIL

Er...

"looking to sell HP's PC business at the very height of its success" - 17% year on year decline in consumer revenues according to their 8K filing of yesterday. Wonder what their bad years were like then?

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at the very height of its success ...

At which point the CEO turns the growth chart the right way up, mutters "oh crap" and gets on the phone to his broker ... then his lawyer ... then the first flight to anywhere

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Childcatcher

HP is no Sun, it's actually making money, but HP is rattled.

When Sun was making their purchases and trying to convert to SW, they were also still making money. I see the exact thing happening to HP. A software only CEO taking over a HW company.

Buying software companies for exorbitant multiples. The only thing missing is an "Investment Firm" to buy up a large sum of stock and start imposing their will on the BOD.

300,000 employees down to 100,000, if not even less. It's really too bad. HP was a very respectable company.

Where is MB to explain to us all how this will work out for HP?

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Happy

RE: HP is no Sun, it's actually making money, but HP is rattled.

Dear Sunshiners,

Despite your desire to believe that hp is somehow repeating Sun's failure in an inevitable manner, which you seem to think will somehow lessen the comedic value of the Sunset, there are a few striking differences.

Firstly, the hp PC bizz is profitable, it's just not that margin rich (though much better than Lenovo's). Leo comes from an enterprise software background and thus thinks of margin of the type SAP makes, so he wants to split it off. But he isn't selling it off because it is failing (like IBM had to), but because it isn't making the figures he wants. It will still be a very profitable venture as a stand-alone business, should it actually get spun out. Sun simply never had a comparitive business outside of the SPARC-Slowaris homeland because Sun didn't try to diversify until the ship was already sinking. The difference is hp could split off the printers into a separate bizz, the same with the PCs, and the rest would still be profitable. The truth was not one division of Sun could have survived as a stand-alone company in the decline to the Sunset.

Secondly, at this point it is all speculation - Leo said he "may" spin the PC bizz out, not that he definately would. Hoepfully, someone will persuade him to hold onto it at least until the software side has been built up, as profit is still profit.

Thirdly, despite the FUD coming from IBM and Oracle, Leo did not announce that he was going head-to-head with hp's old software partners. In fact, Autonomy is supposed to be a wrap-around product for mining all that business information hidden away in all those Oracle, SAP, Microsoft and IBM products. Whilst Sun made a suicidal habit out of not co-operating with anyone, hp has made a very profitable bizz out of working with as many partners as they can. I predict the first stage of the hp plan is simply more of that co-operation, with the idea that hp becomes the platform and management and datamining toolset of choice to exploit all the business information trapped inside all those disparate Oracle, IBM, SAP and Microsoft systems.

And finally, the point that really scares Oracle and IBM - hp has a long history of co-operating in a profitable manner with the Linux market and also with Microsoft. Oracle's relationship with M$ is hilarious to watch, and IBM's is based on requirement rather than love on either side. But hp has managed to remain the leading M$ partner despite having it's own UNIX and despite being a massive enabler of Linux. The hp lead in numbers of servers shipped with Linux is not just marked, it is staggering. When customers like us want advice and tools to help us implement Linux solutions, we know we can talk to hp. When we talk to IBM we have to first convince them several times that, no, we actually don't want a mainframe, or Power, and that we are serious about Linux. The idea of talking to Oracle about Red Hat is comic as, no matter how eager they are at the start of the conversation, five minutes in their trying to switch us to Oracle Linux and a raft of licensed Oracle software we just don't want. Of all the vendors, only hp are happy to build a solution with us around Red Hat without it feeling like we're swimming against the tide. Which is why I'm quite optimistic that hp's new software thrust will co-operate with SAP, Microsoft, even IBM and Oracle, and not be butting heads from the word go.

/SP&L

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Facepalm

Wow

you really don't have a clue do you Pratt?

Denial much?

HP have 0 clue and HP shops (the tiny number that are left) have absolutely no future. Nobody important runs any real business on HP kit.

Sun made a habit of NOT cooperating? Wow you really show your complete ignorance there. But I'll just let you continue in your blind ignorance because it's hilarious.

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FAIL

RE: Wow

Ooh, you're one of the really bitter Sunshiners, aren't you!

"......HP have 0 clue...." Hmmm, they seem to be doing a lot better than a certain company called Sun Microsystems.....

"......and HP shops (the tiny number that are left)...." That's funny, even IBM are saying they have targeted 10,000 Integrity customers for their Pee-series attack program, which suggests they know a lot more about the current state of the market than you. Oh, hold on a sec, I see the problem - you're a Sunshiner, so you probably haven't been employed in an enterprise company for a while!

".....Sun made a habit of NOT cooperating?...." Please go read up on the Sun flip-flops over x86, their anti-Linux participation in the SCO licensing farce, the whole MySQL death-by-purchase special, the joke of Java, etc, etc. Scott McNeedy waddling onstage in a penguin suit should have been the cue that Linux was and always would be a target for Sun rather than a partner. And don't make me laugh by suggesting Sun had any form of relationship with Microsoft that didn't entail jealous squealling as Sun lost share in Slowaris's webserving base!

Now look at the marketshare figures for Linux and Microsoft servers for the last hal-dozen years - the clear leader in both is hp, not Snoreacle, and was never Sun. And that's because hp know how to co-operate, unlike Sun.

/SP&L

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Happy

Re:re: wow

When you have no real arguments, insult and denigrate. You are in typical form Matt. I'm pretty sure that Gavin is not and has never been a Sun loyalist. Your attempts at denying an obvious comparison are sad. Very comparable to the Sun fanboys denials at the time.

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RE: Re:re: wow

"When you have no real arguments, insult and denigrate...." Yup, that's typical Sunshiner posting style.

".....Your attempts at denying an obvious comparison are sad....." Really? Let's see - Sun was a narrow vertical around SPARC-Slowaris and little else. They couldn't even sell a fraction of the number of badged Hitachi storage arrays as hp did, even though the two products were directly comparable. Sun had a blade offering... well, actually they tried three times and failed each time in a year, always late to market and chasing hp and IBM. In comparison, hp have been the leading blades vendor almost from the start. The comparion on desktops or printers is even easier seeing as Sun just didn't do either, relying on butting heads with M$ and the rest of the industry with the lame Sun ONE joke. Has Sun ever made a phone product? How about management software like Openview? A services arm to compare to EDS? In short, the only ones blind are the ones assuming that the tiny part of hp working on the Touchpad devices somehow make up the rump of hp.

/SP&L

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FAIL

@Matt...

Why don't you just admit that your beloved HP has a bumbling bufoon of a CEO, the guy is a walking disaster. 44% value lost since he took the job? And you are still going to defend him, he makes ponytail look good and that is saying something!

"Firstly, the hp PC bizz is profitable, it's just not that margin rich"

Lol's, that saying something, 5% is a great margin isn't it? Makes you wonder why no one else wants to push all that tin...oh yeah that's right, no one does, apart from the Lenovo, acer, samsung...

"The truth was not one division of Sun could have survived as a stand-alone company in the decline to the Sunset."

No argument there, but then this is about HP, not Sun is it...

"hp has a long history of co-operating in a profitable manner with the Linux market and also with Microsoft. Oracle's relationship with M$ is hilarious to watch, and IBM's is based on requirement rather than love on either side."

HP has along history with Co-operating with these companies, because it has no x86 OS, and no bloody database. It has no choice but to co-operate so it can push all that commodity tin...Oracle's relationship with microsoft is "Hilarious" why? How many Oracle DB's or middleware or Business apps are deployed on Windoze Matt? not many at all...

"When customers like us want advice and tools to help us implement Linux solutions, we know we can talk to hp"

Or IBM, or Fujitsu, or Dell, or hell even Oracle, any one of them can sell you some COMMODITY TIN! If you need HP's advice on Red Hat then well you lot don't know your Red Hat very well then do you...

"Which is why I'm quite optimistic that hp's new software thrust will co-operate with SAP, Microsoft, even IBM and Oracle"

This is just plain funny, Oracle? Seriously? In case you didn't notice HP's new "Software Thrust" is non existant, what software of any real value does it have? No OS (Oracle has killed HP-UX, look at all the statements HP has been making crying about how Oracle has screwed them), no database, no middleware, no Java app server, no CRM, no ERP. It's relying on a suite of infrastructure management products (Openview....) and Autonomy, and that's it.

Not much of a Thrust, more of a half hearted limp...

At 40 Billion market cap, once it has spun out it's PC business and printers it's up for grabs by IBM/Oracle/Mickeyshaft. HP has realized too little too late that pushing tin is not a game that will last long in this day and age.

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FAIL

RE: @Matt...

"Why don't you just admit that your beloved HP has a bumbling bufoon of a CEO...." If you bothered to look at my posts, both here and in the threads after his appointment, I voiced serious doubts about Leo. But that would mean you're have to actually read up on my posts, actually do the tiniest bit of research, before tryping (sic), so I'm not surprised you missed it.

".....Lol's, that saying something, 5% is a great margin isn't it?...." In an IT market still suffering from the downturn/depression/end-of-the-World (select to suit your level of melodrama), it's a lot better than making losses. Just ask Jonathan Schwartz.... Better still, ask him if he liked the last year of the Sunset, when hp's prnter bizz turned in more of a profit each quarter than the whole of Sun did in the year!

"......No argument there, but then this is about HP, not Sun is it..." Erm, did you fail to notice the article is a comparison of hp and Sun in its decline?

As usual with the Sunshiners, you still have to realise just because you dearly want something to be true, doesn't mean it is.

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Demise of PC or rise of personal smart entertainment?

I think that what's happening is that the industry is failing to realize that the tablet is not replacing the PC, it's going into a niche which wasn't already served. The notebook computers with the swivel display were used like fondleslabs. The problem was that these cost $2,000 and up, while the fondleslab is a couple hundred.

But "fondleslabs" aren't a replacement when actual productivity is desired. Fondleslabs are for fun, and notebooks are for productivity.

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Facepalm

Problems? What problems?

"The problem was that these cost $2,000 and up"

Not to mention that they weighed 2 or more kilograms and came with a keyboard + mouse oriented bag of bloatware called "Windows"

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Devil

Carly, please come back! ;)

HP as a serious H/W business died to many when they spun off the Agilent. And as many say, Agilent was spun off to preserve the culture and principles HP was based on.

If you would ask me, they shouldn't have ousted Carly. If you look back, the HP now is heading precisely where Carly pointed it into. And how many CEOs HP changed since then? To how little effect?

The problem of HP is that it is too large for managers they hire. They still have plethora of talented engineers, yet assign to management positions predominantly bean counters and MBAs who have no clue what to do with all the talent pool. At least Carly's ambitions were of the same scale as HP is.

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Only one CEO between Carly and THE END

Not counting however many interim CEO's, I believe only Mark Hurd was between Carly and Leo.

I think your 100% wrong. Carly ruined HP, Compaq, and quite a few other things. I never cared much for Hurd either, but the Palm acquisition showed some guts and vision. Leo is a moron apparently trying to enter his old marketplace that is already saturated with software vendors. Worse those vendors are ones that HP is closely partnered with to provide hardware for. Why shoot one foot when you could shoot both? Crazy.

Its a bit reminiscent of Apple's fight with Adobe. Adobe products on Apple helped keep Apple relevant for many years.

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WTF?

Quality Center

HP Quality Center is anything but. Anyone who has had the displeasure to work with this product will have horror thoughts at HP becoming a software only company!

Worst programmed ActiveX turd you can imagine.

http://blog.nirav.name/2008/08/whats-wrong-with-hp-quality-center.html

and it hasn't got any better since that post was written.

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FAIL

Pathetic

I'm glad Leo made this happen, makes me think of shooting an injured horse to put it out of its misery. However, its also pretty sad because in this case the horse will be in pain for a couple minutes (years) and need to be shot again to finish the job

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Meh

Maybe they SHOULD leave the hardware biz . . .

I have owned an HP Pavilion Elite for 2 years. For a box that cost $999CAD, I am less than impressed that :

- the original video card shipped with a faulty fan, which dies within 5 days of unboxing.

- the replacement video card shipped with a faulty BIOS. As temps increased, fan RPM Decreased.

- Hard-disk (Hitachi DeathStar) packed it in after only 6 months. I have drives over 6 *years* old which still work.

- replacement video card died, facilitating the purchase of a replacement @ ~$30CAD.

To be honest, I did find their customer service people fairly helpful, and they always shipped my replacement parts promptly.

My other problem was with the use of a non-standard form factor for the inadequately cooled casing - still a sticking point since re-boxing the internals will cost me over $500CAD, and I just can't bring myself to throw away anymore good money on that machine.

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