Wednesday, August 24, 2011

Robert X. Cringely weighs in, the little San Jose rag laying around in fast-food joints and coffee shops, this week has Robt. X. Cringely's column headed "Losing the HP Way." As usual, Cringely doesn't pull punches. He cites the Agilent spinoff in 1999 under Lew Platt as follows: "While this made sense at the time, and even today, there were unintended consequences of that spinoff -- the loss of HP's corporate soul.... Lew Platt blew it in my view."

Cringely mentions the 10% time for employees working on their own ideas as an early HP idea, rather than Google who now gets credit for 'inventing it'. Robt even says (correctly) that if you needed lab stock for your 'wild-ass idea' or anything else needed to do the job, say a magnetron or a barrel of acetone, it could be taken without question on Friday afternoons.

The cruelest irony he notes is that Apple will now be building its new spaceship intergalactic headquarters atop what used to be one of HP's most important labs. He's right. Might be right in his final sentence too -- "HP may have no route back to greatness."

Compared to today's idiotic articles quoting asinine pundits in the analyst world who think it fine to speculate that Oracle will buy a beaten-down HP to give Hurd satisfaction for burying Leo, Cringely does a straight-forward sobering analysis. HPites everywhere (the old kind) are saddened beyond words.

Monday, August 22, 2011

bad news brings out more stories

I had a chance this weekend to meet a CIO who 'knows' Apotheker and Hurd from days dealing with NCR, SAP, Oracle and HP. The story I found most fascinating concerned an NCR deal with Home Depot on some very customized, proprietary software for in-store customer tracking / inventory correlation. HD had a two-year exclusive, and it took about a year to debug the new system and get it functional, at which point it was instantly valuable to Home Depot. But, through a CEO 'decision' at NCR (guess who), a loophole was found that enabled NCR to sell the same SW to Lowe's, for instant installation. Lowe's was thrilled, Home Depot could sue but not walk away, and NCR shareholders all benefited. HD went later to SAP, and as it was reported to me, found them to be extraordinarily ethical. Hummn...

Friday, August 19, 2011

kinda called the shot?

I just re-read my own blog a bit, in view of the news this week for HP. May 21, analyzing the second quarter numbers, I opined that HP is screwed in the consumer market -- PCs as well as TouchPads, etc. While hardly new news to anyone (since some pundits have said this for thirty years), it was satisfying to me to read my own prophecies and realize they were pretty accurate.

Today, I'd have to say, "What were they smoking over there?" This company has been out of touch with consumers for so long it is embarrassing. (Again, some longterm observers would say, "Charlie, name me one time they were in touch"). They make Motorola's disaster look like child's play, although they aren't (yet) being compared to Enron or AIG.

But for the world's largest revenue high-tech company on the globe, this has got to be viewed as mostly catastrophic. Predictably, the stories this morning go back to Carly's tempestuous acquisition of Compaq, clearly pinning the blame on the Wicked Witch. But it is hard to blame it all on Carly. She's been gone an eternity in Silicon Valley years. Consider -- she was bounced two and a half years before the i-Phone appeared, more than five years before the i-Pad appeared. Think of it this way -- Apple had yet to average 1 million i-PODs per quarter, or i-Macs per quarter -- when Carly was deposed.

It was Marc the Knife (the kindest appellation we've heard in a year for this abusive tyrant who was praised all over Wall Street) who presided over the destruction of R and D (along with ethics, any sense of community involvement, charity, or tragically, the HP Way) that paved the way for this denouement of an icon.

Apple did do R and D, with acute market sensitivity, and boosted i-POD sales by ten times in the next two years, boosted their PC/laptop sales by four times in the next five years (into a "dead, mature market"), and without the i-Phone and the i-Pad built a dynamic exciting company compared to the cost-cutting enterprise-focused Palo Alto progenitor of Silicon Valley.

And now, based on four exciting consumer-facing product lines (only), Apple has surpassed IBM in total revenues, and is about to pass HP. The only saving grace for HP in terms of 'standing tall' is to note that 'iconic' Intel, Cisco, Dell, Microsoft, Oracle, and SAP have all stagnated worse than HP, while other iconic companies, notably Sun and Motorola, have disappeared.

Unfortunately, American companies, by and large, are being managed (and lauded) by folk who resemble the leadership that has just failed HP.  Check the statistics for DuPont, Merck, Kodak, Boeing, John Deere, General Motors, AT&T and Verizon, or your favorite retailer, and it paints a sorry picture for what the Wall Street Journal and Harvard Business School types admire.

end of an era

The PC business for HP has beeen bookmarked by Apple. And "TOUCH"

HP, despite what the Computer History Museum august visitors think, invented and sold the first successful Personal Computer -- the HP 9100A, eight years before Ed Roberts did the Altair. And in the Computer History Museum timeline itself, Ed says "Jeez, the Intel Intellec I was a PC, and they just didn't recognize it." He is right, of course -- the Intellec I, which was a development systme for designers to write code to program their new microprocessors, was built by a team inspired by the HP 9100A, including Bill Davidow who moved from being one of HP's first three PC salemen to Intel. DUHHH...

And Wozniak, working at HP, proposed the "Apple 1" to them, but was ignored -- actually he was given permission to do it without HP interference -- about the time that Ed Roberts had his seance in New Mexico and met a kid named Gates.

It took another eight years for HP to "wake up" and decide to compete -- with the vaunted TOUCH-SCREEN, a machine with a TV ad of a Monarch Butterfly flitting onto the screen and causing magic things to happen. The Ad preview was screened for the HP Executive leadership in Napa at the tony Silverado Country Club the morning after the Apple Hammer-throwing ad ran for the first and only time at the 1984 Super Bowl.

HP execs were told confidently by our McKinsey advertising and marketing team that we'd go from 2% of a modest PC-world to 21% in a year with our machine and their help. This, bear in mind, is a year after the IBM PC was on the cover of TIME magazine as the MAN OF THE YEAR. And this team blithely wrote off Apple, whose Apple III (done by ex-HPites) and the LISA (done by ex-HPites) failed.

When the numbers were in a year later, the Mac sold 200,000 machines (only half of Steve Jobs' prediction, which fueled his unplanned departure from Apple), and HP's expensive, slow, unreliable, impractical TOUCH-SCREEN sold 40,000 -- not exactly hitting the 21% market share number. So the first head-to-head failed, pretty hard.

The second? HP announced the TouchPad in January 2010, but concluded it didn't work by April. Apple announced its i-Pad in January 2010, delivered in July, and sold one and a half million the first month, fifteen million the first nine months. Business Week reported that HP had to buy Palm and WebOS because they had outsourced R*D to Asia (gawd) and HP confidently said, "the TouchPad will be the businessman's indispensible tool" HP built 500,000 for the initial launch a year after the i-Pad launch (and four months after the SECOND i-Pad launch. Best Buy, the biggest electronics super store on the planet (but not exactly an enterprise supplier) took 300,000 units initially, and returned 270,000 yesterday.

So -- Touchpoint -- don't name your product "Touch..." and don't go up against Apple?

blockbuster news?

Page 351 (and again on p. 503) of THE HP PHENOMENON has Packard's famous quote: "The only thing worse than a little shitty business is a big shitty business". His ghost doubtless jumped for glee yesterday.

The early morning San Jose Merc story said "HP has sold 25,000 TouchPads; Best Buy has 270,000 in inventory". Somewhat different than Apple stores with queuing customers for each new breathlessly awaited release of (your choice -- an i-Phone, an i-Pad, even a new Mac).

The mid-afternoon story was somber -- the TouchPad, the WebOS, and the Palm Pre are gonzo. And HP plans to (HOPES TO) abandon the PC business. Some bloggers said "Jeez, this guy Apotheker is killing the place" while others cheered and said, "This guy Apotheker just might save the place"

A fascinating week, juxtaposing the Google acquisition of Motorola's capsized phone business with HP's highly visible faux pas.

Consider -- Jobs now "walks on water, brings his own water with him." But for the first eight years after he returned to Apple, the headlines, analysts, and pundits all panned him. It wasn't until the third round of the i-Pod, circa 2005, that the headlines started being positive. And then for the i-Phone, Dvorak was merciless, and Ballmer beyond rude for early 2007. When sales 'tanked' a year later, everyone said "SEE" And for the i-Pad even, the erstwhile competitors (did we say Ballmer and HP combined this time?) all pee'd all over it -- "it'll be a failure like the Newton, no one really wants ... " Now he's viewed as this idiot-savant genius who can do no wrong. Some might say, "jeez, all he did was insist on CONTRIBUTION for customers, and insist on great innovative engineering" What a concept!

Little known fact -- the Mac (yes, they still make 'em) has gained unit sales of 28% per year for the last nine years, very profitably, in the 'dog-eat-dog' personal computer space. Hummn. This has been the annuity profit generator for Apple. This is a "mere" 15 million Macs per year today (everyone said the i-Pad would cannibalize it, but it has given a "halo effect" instead).

The i-Phone killed both Nokia and Motorola phones (there is a huge story here about how to go from the highest unit volume single electronics product -- the Razr -- in world history to virtual bankruptcy in six months, for one of the most iconic electronics companies in history).

And the i-Pad killed not just the TouchPad, but all of HP computing (a $40 billion business for which kings and queens fought and died) in one month of head-to-head. Whew!