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Why HP Should Sell Its PC Business To Save It 221

Posted by Soulskill
from the anywhere-but-here dept.
packetrat writes "Hewlett Packard may not be in danger as a company, but its future in the PC business is in doubt, thanks to former CEO Leo Apotheker's maneuvers to turn HP into IBM. This article at Ars says Meg Whitman should go ahead and sell off the PC business — mostly because HP's management is so inept, it would likely do better without them. Agilent seems to be doing okay since it was spun off in 1999, but HP may have spun off its soul in the process."
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Why HP Should Sell Its PC Business To Save It

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  • by RocketRabbit (830691) on Monday October 10, 2011 @05:25PM (#37670846)

    They should just concentrate on the one really profitable thing they do - making ink.

    Or they should just sell off their assets, and then pay the shareholders off.

    • by jd (1658)

      There are thousands of ink recipes out there, many much more stable than modern inks. There are also hundreds of ink cartridge vendors out there - modern inks may be naff but there's a lot of people selling the stuff.

      If HP wants to survive, it certainly needs to concentrate on core products but it also has to diversify. Having said that, diversifying into areas HP aren't very good at doesn't help HP.

    • by Darinbob (1142669)

      HP used to do one thing. Engineering equipment like scopes and test tools and calculators. Then they added printers. Then they added PCs. Then they spun off their core being into Agilent. What's left behind at HP is not HP. Don't remember when they added workstations and minicomputers to the mix, but they aren't doing PA-RISC systems anymore.

      • I wonder if there is a significant market for retro test equipment. With real, quality buttons and switches. And green high persistence phosphors. And RS-232 ports. And tubes (er, valves for you strange people that drive on the wrong side of the road).

        Just think, your results would be so much warmer.

        Nurse says it's nap time. Gotta go.

      • HP name becoming radioactive.

        HP used to be a quality brand, but that was at least a decade ago.

        Now they represent overpriced ink, _crap_ PC clones and laptops and gross mismanagement.

        Acquiring EDS only adds another horrible reputation to the pot. Perhaps they should buy the ghost of Packard-Bell to further enhance their image? SAIC? The 'Church' of Scientology? (I hear it's going cheap)

        They shouldn't spin off their PC business, it is crap. They should spinoff their server business (and any other bu

  • by 14erCleaner (745600) <FourteenerCleaner@yahoo.com> on Monday October 10, 2011 @05:25PM (#37670850) Homepage Journal
    It's soul was eaten by Carly.
    • by inviolet (797804) <slashdot@ideasma ... g minus caffeine> on Monday October 10, 2011 @05:40PM (#37671078) Journal

      It's soul was eaten by Carly.

      Some will consider you flippant or flamebait, but I think you've spoke more truth than you'll get credit for. The leader's personality percolates and pervades through an organization, driving out (directly and indirectly) those not orthogonal to it. HP had a different personality after her tenure than it did before.

      • by LWATCDR (28044)

        Someone should write a paper or a book about the destruction of American business by the MBA.
        Really is it logical that a computer companies top person isn't an EE?
        Is it logical that a software companies top person isn't a programmer?
        Is it logical that a car companies top person isn't a automotive engineer?

        At some point we have let the clerical staff take over the nation.

        • by AHuxley (892839)
          Yes expand this into a script :)
          http://en.wikipedia.org/wiki/Hewlett-Packard_spying_scandal [wikipedia.org]
        • by inviolet (797804) <slashdot@ideasma ... g minus caffeine> on Monday October 10, 2011 @05:55PM (#37671316) Journal

          Someone should write a paper or a book about the destruction of American business by the MBA.

          My brother could contribute to the project. He was a pedigreed professor of finance who could teach anywhere he chose. After a few years he was offered tenure. He realized then that his job had become the mass-production of MBAs, very very few of whom were at all receptive to the most crucial idea he tried to impart to them: you should make money, not merely get money.

          Seeing then that the fruit of his labors were ruining our society, he quit to start over becoming a EE. I admire him for that.

        • by JaredOfEuropa (526365) on Monday October 10, 2011 @05:57PM (#37671338) Journal
          That book exists: "Managers, not MBAs" [amazon.com], by Henry Mintzberg. Well worth a read... and rather than a baseless rant, it's a well-argued book written by someone in the know.
        • by uniquename72 (1169497) on Monday October 10, 2011 @06:06PM (#37671504)

          Someone should write a paper or a book about the destruction of American business by the MBA.

          I'd read this book, and hope one of the case studies would be about Border Books, a fantastic company of the '80s and early '90s. Then the creators and early executives left and the whole board was taken over by MBAs who had never worked in a bookstore, had no idea why Borders was superior to (or even different from) Barnes & Noble, and didn't understand anything about how the internet was changing retail.

          Then the company died.

        • by 1729 (581437)

          There's a new book called "Car Guys vs. Bean Counters" that might be what you're asking for:

          http://www.amazon.com/Car-Guys-vs-Bean-Counters/dp/1591844002 [amazon.com]

          I haven't read it yet, but the reviews I've seen were positive.

        • by Alomex (148003)

          Someone should write a paper or a book about the destruction of American business by the MBA.

          My experience is that nowadays all MBAs know is how to reduce costs and thus move your product downmarket. They can talk for hours about how to save 5 cents in shipping costs, but have no idea how to produce a superior product that would allow you to double your price and people happily dole out the cash (apropos of Apple and the late Steve Jobs).

          • My experience is that nowadays all MBAs know is how to reduce costs and thus move your product downmarket. They can talk for hours about how to save 5 cents in shipping costs, but have no idea how to produce a superior product that would allow you to double your price and people happily dole out the cash (apropos of Apple and the late Steve Jobs).

            Strange, I earned an MBA in 2008 and my experience is exactly the opposite. Apple was an example frequently used by professors in product development and marketing classes. Apple was also a common topic for student research papers in these areas and even in macroeconomics classes (ie how does Apple plan for or adapt to the business cycle - they don't, they just rely on superior design and superior marketing to power through economic downturns).

            I attended a business school at a state university, I believe

            • by Rich0 (548339)

              Yeah, but leading an inspired R&D team is not something anybody can do. On the other hand, anybody can go down a budget and knock 10% off every line and fire the manager who misses the mark by the largest amount, then lather, rinse, repeat the next year.

              • by perpenso (1613749)

                Yeah, but leading an inspired R&D team is not something anybody can do. On the other hand, anybody can go down a budget and knock 10% off every line and fire the manager who misses the mark by the largest amount, then lather, rinse, repeat the next year.

                Neither can any engineer be a useful member of that R&D team. Every year there is no shortage of computer science graduates who couldn't write a non-trivial working program if their life depended on it. There are people of marginal skills in all fields of endeavor, management or engineering. To look at these people and draw some conclusion regarding the entire field, or to draw a conclusion as to what they were taught, is quite silly.

            • by Alomex (148003)

              The examples are worth squat. Many (if not most) MBAs cover at least one case of a company who succeeded by implementing a very aggressive profit sharing program. How many companies out there do you find implementing profit share plans?

              Same with higher quality. You might spend weeks paying lip service in class to Apple and other upscale manufacturers, but out there in the real world MBAs are, more often than not, one trick cut-costs ponies.

              • by perpenso (1613749)
                You seem to be moving the goal posts. You claimed MBAs have no idea on how to deliver a quality product. I demonstrated otherwise. As I said, most software engineers are taught how to develop high quality reliable software. That fact that many software engineers do not do as they were trained, and that many MBAs do not do as they were trained, does not change the fact that they were trained to do otherwise. The reliance purely on cost and the race to the bottom that such a strategy entails is something they
        • by gig (78408)

          Not just business, but also government has been destroyed by MBA.

        • Someone should write a paper or a book about the destruction of American business by the MBA. Really is it logical that a computer companies top person isn't an EE? Is it logical that a software companies top person isn't a programmer? Is it logical that a car companies top person isn't a automotive engineer?

          I confess that I once had the arrogant engineer's stereotypical perception of MBAs. This made business school so much more fun for me. I was constantly amused by having my former beliefs turn out to be complete nonsense.

          Having an MBA and experience in the industry that your company operates in are not mutually exclusive. I am an engineer that recently earned an MBA. About 1/3 of my class were engineers or scientists of some sort. For those whose experience was managerial in nature many managed things dir

          • by Rich0 (548339)

            The problem with mathematical models is that they tend to cause you to ignore reality in favor of the model.

            There was this wonderful model for evaluating CDSes, and it said that Wall Street was made out of solid gold a few years ago.

            Models also tend to encourage people to weigh decisions in favor of things that are easily measured as opposed to things that aren't easily measured. At work they're going nuts with Six Sigma, but it is all about coming up with arguments that will win elevator speeches. If you

            • by perpenso (1613749)

              The problem with mathematical models is that they tend to cause you to ignore reality in favor of the model.

              The shortcomings of modeling were thoroughly discussed, an incomplete set of factors plus garbage in garbage out. One of the steps is to compare your predictive model to the real world to see how close to reality it gets. Only once you believe you are "close enough" do you introduce factors that do not exist in today's real market, ie your new product and/or services. Even then the results are not to be taken as gospel. Given all these shortcomings, it is often still better than having an "expert" just thro

        • Someone should write a paper or a book about the destruction of American business by the MBA. Really is it logical that a computer companies top person isn't an EE? Is it logical that a software companies top person isn't a programmer? Is it logical that a car companies top person isn't a automotive engineer?

          At some point we have let the clerical staff take over the nation.

          Amen. I've been thinking this for years. John Ralson Saul helped guide my thinking in his book "Voltaire's Bastards", and I've been digesting and developing these ideas ever since. Amongst my anecdotal stories buttressing my ideas is that of an MBA with no food processing experience being appointed to run a food processing facility. He sat in his office for hours staring at charts, and he had little real conception about how his plant functioned. He managed to change a formerly profitable facility into

    • by LurkerXXX (667952)

      It certainly took a hit from Carly, but it's real problem has been the board of directors ever since.

      The morons didn't even INTERVIEW Apotheker before they hired him. They didn't even look into his reason for leaving(actually being canned) by SAP.

      They are continuously at odds and busy with infighting rather than running the company. Meg (who was one of those morons on the board) is going to continue with the insane plans Leo got the axe for coming up with. That's insane.

      The investors need to clean house

  • by couchslug (175151) on Monday October 10, 2011 @05:30PM (#37670938)

    Good HP is long dead.

    New HP deserves death.

    None of this is news.

    • It's like someone who got blasted with a couple Sieverts worth of radiation all at once. They're sick for a while, then everything seems to get better for a while, but everyone knows it won't be long until their hemorrhaging out every orifice and on the way to being dead. Seriously though, when did the exposure occur? What, if anything, was the event that signaled HP's eventual demise as the company we know today? I think most of us agree that it's going to happen, I'm just curious what the point of no

  • by msobkow (48369) on Monday October 10, 2011 @05:43PM (#37671136) Homepage Journal

    If you still have to ask the question of what to do with the PC business despite being the market leader globally in PC sales, then get out now and sell the division to someone who cares.

    Yeah, if the global market leader isn't sure about the business, then they really should sell it to someone who actually cares about the business and will grow it. Indecisive waffling is not good for any business.

    HP hardware is not what it used to be anyhow. Noisiest freakn' servers on the planet. You'd swear they go out of their way to find extra-noisy turbo-whine fans for their rack mount hardware.

  • by sethstorm (512897) on Monday October 10, 2011 @05:50PM (#37671236) Homepage

    After IBM PCD was sold off to Lenovo, the quality has decreased.

    Their well-known Thinkpad product line transitioned from a no compromise option to a lesser product. First, the high-quality Flexview displays went. Next was any non-widescreen display, followed by the split into the current models seen today. In trying to globalize a US brand, they killed what made the Thinkpads unique - being able to pay a good amount of money, and get a no-nonsense, no-compromise product.

    As for HP:
    The damage at HP was done during Fiorina's time. You want to blame anyone, you pin it on her. Not Hurd, or Apotheker.

    Engineering a product for the Third World and then simply changing the product manuals/power plugs for the First World always results in an inferior product. Selling it off to an interest in the Third World guarantees this outcome.

    • by couchslug (175151)

      IBM gained by dumping the Thinkpad line. It's a Lenovo problem now.

      What happens to something after you dump it doesn't matter, because you got rid of the problem before it happened.

      Products don't matter, profit matters and much as I like old HP test equipment and old Thinkpads, neither company OWES me those things.

      • By your logic, you'd be fine if everyone sold junk - even if it meant there was no alternative.

        That's the way you kill products and companies, especially Thinkpads.

        • by gig (78408)

          There is no alternate universe where the bottom doesn't fall out of the generic PC market and kill the quality of all IBM and HP PC's, should they still be making them. That is a fact of life that IBM and HP had to deal with in their own way. IBM spun off their PC's and HP kept them and ran them into the ground. In both cases, quality went down. It was always going to go down. You can't go from an average sales price of around $1000 to an average sales price of around $500 without losing quality.

          People used

          • by Rich0 (548339)

            Apple only loosely competes with PC makers.

            Sure, at some level their devices do the same sorts of things, but if somebody buys a PC there is a 99% chance they want to run Windows on it. I don't know anybody who buys Apple products to install Windows on them.

            The PC makers do compete with each other, which is what keeps their prices down. Collectively they have WAY more market share than Apple. Googling around the only figures I could find were from a few years back, but back then Dell sold 4X as many desk

        • by couchslug (175151)

          Thinkpad has only to be better than enough of the competition. They don't need to be vastly better to sell.

          The competitors are working hard at sucking too.

          BTW if you want quality, spring for a MilSpec Toughbook or Itronix or similar. You can use some of those to smash Thinkpads in your spare time and they'll still work.

      • I understand, but this article was about a way to save HP's computers, not trying to save HP.

        Of course, unlike the ThinkPad, I'm not sure why people would care about saving HP's PCs. ThinkPads were top-shelf; Compaq/HP was decent midrange, but never standout.

    • by gig (78408)

      The quality would have gone down at IBM also. You can't get blood from a stone. The Windows PC market is running at an average sales price of $450. You can't build a quality PC for that price. That is actually cheaper than the original iPod from 2001, which in 2011 dollars is about $500.

      • by Rich0 (548339)

        I like to think I build quality PCs, and I usually spend around $300. Granted, I'm usually not buying cases or power supplies with that money so it goes a bit further, but you can get decent ones for less than $150.

        Much of this depends on what you want to do with your PC, however. If you're looking for some gaming rig with dual video cards then yes that money doesn't go far. If you're looking for something that runs Excel you'll do fine with a very modest investment.

    • by hedwards (940851)

      Depends what line your dealing with. I've got an x120e and I don't see anything about it that's low quality, it was rather expensive compared to some of the competitors, but it's just a well engineered machine. A really good keyboard for the type, nice screen, good battery life and I rarely if ever find myself waiting for things to load despite it using a 1.6ghz dual core processor.

  • by tverbeek (457094) on Monday October 10, 2011 @05:52PM (#37671274) Homepage
    HP and Netflix really ought to merge. After spinning off the PC division.
  • Aside from the likes of Intel and AMD, PCs are a commodity. There is *zero* profit to building a PC in the US unless it's a rare custom gaming or workstation rig. In fact, some say that Dell loses money on every PC and laptop sold, but make up for it in extended warranty plans and accessories. That's how bad selling a PC in America has become. PCs are cheap, easy to build, and with crap quality that most companies and users could give two-shits about. In fact, it's far easier to throw away that disposable c

    • I think that part of the problem in the PC market is a lack of strong brands. People might pay extra for a good looking, well built and quiet desktop PC, or a durable, powerful laptop with good battery life, but which brand would you turn to? Some of the more expensive ones are just as crap as the cheap ones, and in the past few years there hasnt been any one brand of PCs that I'd trust.

      Strong brands do work. Look at Apple. With Apple you pay top dollar for good design and good quality (even if they
      • by jedidiah (1196)

        My dead Mini and my wounded one beg to differ.

        Looking good is no substitute for working well, being well equipped, or being durable.

        • by gig (78408)

          Apple leads in all PC quality surveys, as well as all PC customer service surveys. If you are too stupid to work the Genius Bar and AppleCare ($149 for years 2 and 3 on a mini) then maybe you *should* buy from HP.

      • by gig (78408)

        The iPhone 4 does not have a poor antenna any more than the earth is flat or President Obama is a socialist.

  • How long will it take Dell to screw it up?
  • This may be a great opportunity for Google to acquire a corporate brand and a large patent portfolio for its Chromebook for the enterprise.

    Makes as much sense as Google acquiring Motorola for the same platform and patents for android.

    I would like to see HP/Google enterprise hosted google apps appliances hooked up to Chromebooks as a replacement for the Microsoft Quagmire.

    • by symbolset (646467) *
      Don't know how well Google would take to being the world's largest manufacturer of Windows PCs - the software is banned on their network. Besides, Lenovo's done so poorly with IBM's PC biz their market cap is only $6.5B. Google could pick that up for less than they paid for Moto Mobility. Lenovo's probably big enough for Google - they don't have to go all the way to HP's scale. Asustek would be an even cheaper $5B and a better fit as they already make the best Android tablet.
      • by NZheretic (23872)
        Do you expect Google/Motorola to sell Microsoft Phones? no.

        Why should Google/HP sell Microsoft Windows PCs?

        Just sell the hardware with Linux Distros, Chromebooks, or sell the hardware no operating system installed to organizations with corporate licences. They could even farm out the Windows drivers and support to a third company.

        • by symbolset (646467) *
          It's not easy to scale an operation the size of HP's PC setup down to something on the scale you might expect to move that sort of gear just yet. If you're buying an org, you should buy one closer to the right size for what you want to do and build it with demand. "Don't be evil" includes little stuff like "don't buy a massive global corporation and throw 90 percent of its employees out of work as you part it out for scrap."
        • Better yet they could flip MS the bird and sell only 'naked' PCs.

        • by gig (78408)

          Yeah, the only logical buyer for HP's PC business is the company that should have owned it all along: Microsoft.

    • by gig (78408)

      Google is 75% Mac users, including Larry Page, Sergey Brin, and Eric Schmidt. Chrome OS is not even close to a replacement for Mac OS X. Chrome OS does not even replace iOS yet.

      • by Rich0 (548339)

        ChromeOS isn't really intended to replace iOS or OSX. It is intended to not have long-term local storage - the whole point is to be a platform for accessing cloud services.

        The idea is that if you drop your laptop on the way to work you go into the supply closet and grab a new one and log in. You wouldn't go to a service desk to have your stapler or telephone repaired, and the ChromeOS concept is extending that to a PC.

        Once your local apps start having local storage that is more than a cache, then you need

  • Memristors alone will make HP hugely profitable from licensing. Memristors will likely be the great computing discovery of the next decade or two.
    • by artor3 (1344997)

      Only if HP actually does something with them. The way that company's been going, I expect that actual innovations using memristors will be accomplished by other parties, and HP will just play patent troll and either extract licensing fees or try to block superior products from reaching the market at all.

  • I work for a company that was spun off by HP then spun off by that resulting company. Twice removed we are now doing quite well. You lose the benefits and negatives that come with being part of a large company...but the net result can be positive. HP has become a REALLY large company, even since I left there 3.5 years ago (for their twice-emancipated child). I think it is very possible that HP is too large (both in scope of products/services and number of people) to be effectively managed by a single CE

  • The HP board is more than likely to detach the PC business unit as a separate business using the HP branding name. The return on investment of a sell off doesn't make much sense. Basically this would make HP corporate a venture capitalist with it's own spin-off. When IBM sold off their PC division the IBM Touchpad was never the same and part of that was branding. HP's brand is still far ahead of the game of Dell, Acer, Gateway, and the mix.

    What's sad is, that HP burned WebOS in the cradle. But that's bec
    • by gig (78408)

      HP killed TouchPad by not making their own software for the 10 years previous. They can't correct for the fact that they put their balls into Microsoft's hands by putting WebKit and Linux on some ARM hardware. They just simply did not have enough software to compete with Apple and Microsoft at their own games.

  • by Moof123 (1292134) on Monday October 10, 2011 @07:39PM (#37672716)

    I'd hardly say that Agilent is a good example to raise. They are seriously mismanaged, and simply are tied to a business with a much longer product cycle. It has taken more years for them to reach the same level of apparent rot, but only because instruments have a 10-20 product life, while computers have a 0.5-1 year product life. Agilent has had to resort to re-badging their PXI instruments from their rivals (i.e. they buy their PXI 26.5 GHz spectrum analyzer from Phase Matrix, who is now owned by National Instruments). The place has driven off or laid off most of its key talent. Agilent is a festering hulk, it it just not quite as bad as HP is.

    • by Rich0 (548339)

      I think the problem is founder loss.

      Few companies can maintain their vision for long once the founder (and maybe their hand-groomed successors) leaves. Once the institutional investors take over, if you can't fit it on a spreadsheet then it doesn't count. As long as the numbers say you'll do good for the next 4-8 quarters then you get bonuses - whether you're destroying the company or not.

      Occasionally you'll get a strong CEO that bucks that trend, but they're very few and far between.

      Whether you like Appl

  • HP has no future in client PC's. They have to get out ASAP. They don't know a damn thing about competing for the consumer's attention. Consumer PC's are sociology, not specs. Nobody cares what is inside a MacBook Air, they just want one.

    What used to be the PC market is now just servers. HP's notebooks are a server in a notebook, they are not comparable to Apple's notebooks. HP should be running for the back room I-T business it knows.

    A friend of mine who is a petite woman was told by her doctor not to carry

    • by sunspot42 (455706)

      Yup, this pretty much nails it.

      I'm not even sure the PC and laptop as we've known them will still be around in 5 years. I think the smartphone might displace both of them. When you're at your desk you'll dock it with your keyboard, mouse and monitor and use it in "desktop" mode. When you're on the road and need to produce content you'll dock it into a MacBook Air-like docking station with integrated keyboard and monitor and use it in "laptop" mode. And if you just want to browse and read you'll drop it i

      • by Rich0 (548339)

        I'm not convinced of this.

        The PC and the handheld really are very different platforms, and what works well for one does not always work well for another. On the handheld you want big fat buttons you can hit with your thumbs. On a PC you want lots of info readily visible, and the precision of a mouse.

        The corporate world is still on Windows, and that is a vicious cycle. People make apps for Windows since that is what people run, and people run Windows since that is where the apps are.

        Sure, you can find con

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