2011 is surely a year Hewlett-Packard would like to forget. In this annus horribilis, it dismissed its second CEO in two years, showing Leo Apotheker the door in September. The company also said it might sell off its huge PC business; it would push WebOS-based phones and tablets; then backed off on both moves, leaving customers, partners, reporters and even employees shaking their heads. Here’s what HP has to do in 2012 to repair its reputation and restore itself to the status of IT icon.
1. Solidify the HP cloud strategy
Here, HP has made some progress, launching a beta preview of its OpenStack-flavored public cloud services in September. Still MIA is HP’s promised Microsoft Azure-based Platform-as-a-Service. There are other question marks as well. Last year, Apotheker seemed to indicate that HP would build its own PaaS and app stores (for both the enterprise and consumers.) Is any of that still on the docket?
2. Sort out its tablet and phone game plan
This is the hottest hardware category and right now, and HP is largely absent here after launching then nixing its much-hyped WebOS-based TouchPad, casting doubt on the future of WebOS and then reaffirming its faith in WebOS — kinda — by open-sourcing it. You have to wonder if HP will just chuck the whole thing — less than two years after buying Palm for $1.2 billion — and just go with Windows for its next-gen tablets and phones. You know very well Microsoft would make it worth HP’s while.
3. Re-reaffirm PC commitment
How many companies come this close to selling off a $40-billion-a-year business, then pull back from the brink? HP customers and partners are still quaking from that scenario. HP CEO Meg Whitman still has a lot of reassuring to do to ensure these two key constituencies don’t head for the exits. Many dyed-in-the-wool HP shops accustomed to buying servers and PCs from the computing giant were forced by the sell-off reports to at least look at Dell or other vendors as options. That’s a dangerous door to crack open.
4. Make Autonomy pay off big
Whitman stuck by Apotheker’s daring bid to buy Autonomy for more than $10 billion — but that may have been because it was too late to stop it. Now that the deal is done, HP has to show this wasn’t folly and Autonomy’s expertise in handling unstructured data was worth the price premium. It has started down this road by launching its first product integrating Autonomy and Vertica expertise in one offering.
5. Show management accountability
Meg Whitman may be CEO now, just as Leo Apotheker was CEO this time last year. But there’s a pervasive feeling Ray Lane has been running the show. Lane was named to the HP board in October 2010 when Apotheker was tapped as CEO; he then became HP’s executive chairman in September 2011. Whether it’s true or not that he’s the one calling the shots, there needs to be some real accountability at the top of HP this time around.
Whitman knows how to say the right things on earnings calls, most recently acknowledging HP did not live up to expectations last year and needs to “get back to doing what we do really well: being the reliable, trusted partner with whom our customers want to work and delivering the reliable, consistent results that all of you can count on.”
But, words are cheap, and HP has shown a lack of ability to execute, something it has to address in 2012. There’s growing feeling that at just under $26.00 per share, HP stock is undervalued, but given the heebie jeebies past antics have given Wall Street, the company has to prove it can steady the course — in execution, not words.