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back to article HP posts $8.9bn loss on slow sales, charges in Q3

As expected, Hewlett Packard's earnings slumped in the three months ending in July, causing the PC maker to post a third-quarter loss of $8.9bn, or $4.49 per share, which was in line with the high end of analyst estimates. Much of that loss can be attributed to an $8bn write down of its Enterprise Services division, which is …

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Anonymous Coward

New Strategy

EDS won some contracts non poor commercial terms.

HP have put together a team containing many ex-Dell staff and are building an extremely well engineered online store - the project is not without it's problems but, having read recent statements by Dell, is this going to save the day for HP ?

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Silver badge

Re: New Strategy

Outsource the Indian staff to... um... Vietnam. Give the CEO a bigger bonus.

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Meh

HP and a well engineered website?

Now that would be news.

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Anonymous Coward

Re: New Strategy

It isn't about convenience anymore with PCs, Microsoft based PCs. It is all about cost.

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Anonymous Coward

Re: New Strategy

It's not really a news - decent online shop was one of the first thing Whitman promised after becoming CEO.

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Holmes

A lot more work.....

Objectively, they are not only under threat by fierce competitors they are also witnessing events others have recently witnessed, including major Distributor partners, namely suppressed or underlying lower volumes and further margin pressure. This is likely to be the case for a while.

Not just a case of 'steadying' a rolling ship, it requires a review of ocean charts and fresh navigation paths.

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Anonymous Coward

HP is clueless

They don't know what business they are in or want to be in.

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Anonymous Coward

Re: HP is clueless

All of them. HP is competiting against almost every company in IT... at the same time. They need to prioritize. There are many great tech companies that cater to consumers (Apple, Google, etc). There are many great companies that cater to businesses (IBM, Oracle... in the sense of financials, SAP, EMC). There are not a lot of great companies that do both. Even Microsoft, with their overwhelming cash and influence, was never able to become a true enterprise IT player with complete control of the consumer market in the 90s.

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Silver badge

HP. Oh yeah.

Oh wait, I meant "Ho no".

The price is great, but the hardware ain't..

For garden-variety computing and desktop stuff I would buy HP with my eyes (semi)-closed because they got the "bang for the buck" factor quite right.

For mission-critical stuff and fiddly applications, there is no barge with a long enough pole.

In my experience they rely far too much on higher-layer protocol robustness, which is an acceptable tradeoff in some cases, but can (and does) cause problems in some cases. Lousy USB controllers, I'm looking at you (amongst others).

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Anonymous Coward

Re: HP. Oh yeah.

Don't know how true this is, but if you're using usb for mission-critical stuff, um, er.... moving on!

The PCS issue needs to be solved. It would be better to lose some sales but have the kit recognised as excellent and stable hardware because its a brand ambassador for their server kit.

EDS is a big drag because they haven't the infrastructure or the customer skills to properly rationalise IT management. They tried to move everyone to the cloud and few enterprises are ready for that and fewer still trust a third-party to do it for them.

They should have had a rack of servers which could just be wheeled into any customer or cloud data centre which can auto-install and configure itself with hp IT management systems. That's a far easier sell than a world-wide hp cloud and the hardware is cheap for HP. Put it all on HPUX and show the customer how marvelously stable it all is for extra sales points.

Let's hope Whitman can bring some enterprise thinking rather than just slash & burn.

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Big Brother

Re: HP. Oh yeah.

From what I am hearing. It seems like EDS tactics is slaughter HPUX enterprise installations and put them on scale out x86 blades. When it then doesn't perform, then you throw more HW at it. Now having cleaned up a lot of server sprawl in my days I guess that is kind of a short sighted way of doing things.

But then again I also work for the EDS competition :)=

// Jesper

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HP != IBM

HP said they want to ape IBM, and buying EDS was part of that (laudable) strategy. However the services space is getting crowded, with entrants from India adding to the downward pressure on prices. Services, the big story at the start of the decade (2000s) has moved into the commodity market.

IBM's well-publicised strategy has been to keep looking for the high-value market opportunities, and dump commodity markets where needed, or use them to help drive more business to the high-value end. Their long-term plans have attracted the likes of Warren Buffet to buy into the IBM vision. But then IBM knows its core market is the business customer.

HP need to do something similar. The trouble is, as AC above says, they don't know what business they are in. Printing, their traditional core business, is shrinking as people move to in-store printing services to selectively print high-quality images. Their services business (EDS) tries to flog HP kit with every deal, even when the customer wants to stick with their existing tin (not uncommonly, strangely enough, IBM).

They seem not to have decided where they want to get to, and only want to follow where others have been successful before. Until they start looking forward and stop looking back, they will continue to fail.

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Bronze badge

Envy ...

i like the looks of the HP Envy, but hate the stupid, straight out power pin. That thing should be bent 90 degrees so that it frees up desk space and is less likely to snag things when on hallway travel. Even at bbuy, the display tables are crammed full of lappies that have power pins bent and possibly damaged. Feel sorry for anyone who buys a floor model/demo display model.

Unfortunately, from what i heard, there is one, huge, Asian supplier to almost all the parts buyers that refuses to or will not retool to offer buyers more choices. When i do find a laptop sporting a 90 deg pin, the laptop itself is unappealing.

But, back to HP... If the Envy price driops to, say, $800 for a 17", i might bite if the weight is low enough...

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Business value

As the world's largest PC and server business HP is worth what, almost as much as Apple's iPod business? Maybe they should think different.

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Anonymous Coward

Duffer

"Impairment of the Compaq brand" ?

There's a known condition in sharks' feasting frenzies that they will bite and even eat their tales for gain. Yes, it's defeating the best prospect of moving forwards in the world, but they will persist nonetheless. For the last number of years, HP have been monomanically trying to bury rhe very brand that gave credibility to so many of today's senior technical management - this is just another manifestation of this. At no time in compaq's brand history can I remember any association with 'low-end consumer devices' as a market leader...rather the alternative.

Microsoft have the same concept with every new pseudo-brand they invent (zune, x-box, etc). The corporate brand MUST be in the ascendant at all costs. HP killing the Compaq brand has mirrored the woeful results that this strategy has created. If anything, HP (as a brand) is now considered Ford-focus territory for most enterprise customers and very-consumer-low-end-ish.

I'm not saying re-surrect Digital and Himalaya non-stop years, but Compaq is rooted as solid, reliable and something to hang your coat on. No Internal news-speak marketing is likely to convince the outside world that this is any different and I wish HP luck in burying a promising corpse.

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Anonymous Coward

Re: Duffer

Do you mean the DEC brand? Compaq made knock-offs of IBM PCs.

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Re: Duffer

Well,.. Then you forget about Compaq ProLiant (now HP ProLiant..).. when i looked at what DEC was producing at the time Compaq bought them..no wonder DEC couldn't sell x86 stuff... Let's look at what Compaq added to the value of x86 servers : The first ever x86 server with (their own!) RAID controllers, Hot Pluggable hard disks, redundant power supplies, the first x86 servers with hot pluggable memory (yes, RAM in RAID 1), iLO, to name a few. And what did DEC offer...none of this..except flaky third party RAID controllers..(Mylex, etc... where are these now?). and don't get me wrong : i still believe the Alpha CPU technology was the best ever..a pity its no longer there..

Yes they used (and still use) x86 CPU's and that's where it all ends..if it were not for Compaq, the x86 server market wouldn't even exist !

And yes, i used to work for Compaq (and now HP)

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Anonymous Coward

yeah first HP says 'no we dont want the apple steve', so woz goes and forms apple computers, then they see how rich apple got off smart phones, and HP is like 'well we dont need to sell those smart phone things either'

Maybe they can be the first to make a camera with a phone in it instead of a phone with a camera.. i know id love one.

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Anonymous Coward

Ross Perot

Small correction.

General Motors bought EDS from Ross Perot in 1984, who then spun it out as its own company in 1996, and became an outsource customer.

When I was there in the early 90s, you could have any company car you liked, so long as it was a Vauxhall.

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Anonymous Coward

Thank goodness I left

Left the EDSy bit quite recently... and I couldn't be happier.

No training, no time to train.

Sky high expectation, rock bottom morale.

Best-Shored(tm) colleagues constantly asking you how to do things (I was once asked 'what is TCP' ). bosses with no technical ability or interest whatsoever beyond the spreadsheet.

No technical direction and no time to research better ways of doing stuff

Constant emails from directors you've never met or even heard of with visions and town halls and messages and other stuff that really has nothing to do with your job...

I could go on and on and on... and on....

Well out of all that....

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Anonymous Coward

It was always a moronic strategy:

1 - Buy a company who's assets are its people

2 - Sack the majority of those people

Every chunk of the workforce that was fired, knocked a similar sized chunk off the value of the Service Arm (EDS).

HP bought EDS as they didn't know how to operate in the Services world. A fact they proved by running EDS into the ground.

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