I was sad to learn that HP, once a technology stalwart, is slashing 27,000 jobs by 2014 (and 9,000 this year). That’s a clear indication of a sinking ship. No doubt, this move will slow down its fall. HP CEO Meg Whitman recently told analysts that HP is going to invest more in research, development and innovation. You may recall a past HP tagline that was simply, ‘Invent’. And HP was once spoken in the same breath as companies such as Xerox. HP missed out on many opportunities. Its successive leaders struggled to turn around the company. True, it excels in areas like printing, networking and servers, but these are the few aces left in HP’s hand. Along the years, HP acquired illustrious companies like Compaq, 3Com, Palm, and Tandem, but took a long time to integrate those companies’ product lines and to produce top selling solutions based on that IP. There were ‘bad’ acquisitions like Palm, and delayed decisions about producing tablets (HP Slate). And there were ‘good’ acquisitions like 3Com, Compaq and 3PAR that gave HP a stronger position in networking, compute, and storage. But now that HP is getting back to innovation & research, here are some areas it should focus on.
Firstly, here’s what HP should not try to be. HP should not try to be like Apple, a producer of well designed consumer products. HP should not try to be like Samsung, LG, or Sony, who lead in consumer electronics. And HP should not try to be like Google, Facebook or any of the Web 2.0 companies. Because it is not an internet company.
Traditionally, HP has been a research company that built innovative, hi-tech and useful products like pocket calculators and laser printers. It could have continued in this line and built industry-specific solutions such as label printers, card readers and bar code scanners. The Imaging and Printing Group at HP missed the digital photography bus. Yes, HP did acquire an online photo printing company, and tried to offer customized printing solutions (I can’t imagine my photo on a coffee mug or t-shirt). And HP made a recent effort with cloud printing services.
Why didn’t HP get into medical systems like GE, Siemens and Philips? With its clout in imaging, it could have produced diagnostic imaging systems (X-ray machines, CAT/MRI scanners) for healthcare.
Now here’s what HP can and should do.
It’s not too late for HP to pursue today’s hottest technologies in the business world: cloud services, big data, BI/analytics. Look at what EMC is doing. EMC was just a storage company that later created the networked storage category. Today it manufactures big data analytics appliances (Green Plum). Oracle, once a maker of only RDBMS products is doing likewise (after its acquisition of Sun). And then there’s Dell, once a PC company that reinvented its self and is now selling end-to-end enterprise solutions and also services.
HP has focused too much on hardware and I think it needs to tone its software muscles. Dell is quietly setting up a software division and I think HP should do likewise. Software is the key to smarter network management tools, BI/Analytics and big data. And HP can embrace open frameworks like Hadoop (just as EMC did).
Another possible area is hardware-based security (embedded in silicon), video surveillance, and biometrics (HP Imaging).
HP could boost its consulting and global services business, an area long dominated by IBM.
HP needs to have a vertical focus and make products for industries like banking & insurance, healthcare, retail & logics, manufacturing, travel and government.
Clearly, the workforce at HP needs to tilt towards R&D. HP should think about setting up a separate research company on the lines of Xerox Parc.
There’s hope yet for HP. It needs to ‘re-invent’ itself soon.