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Sunday, September 4, 2011

TheDeathOfThe PC: A Call to the Channels Transform Now

My Rover, Grass Valley Fire, 2007
It isn't that we are not familiar with tough business decisions.  We all know somebody who has been a victim of such acts.

HP's announced decision to let die WebOS and TouchPad - a product that lived just 49 days - in and of itself is stupendous.

Spinning off their PC's may seem surprising, unless you once sold IBM ThinkPads and remember selling IBM printers.

Go back to IBM, heck go back the the Mopier, the HP9065 and Edgeline; is it really a surprise that after investing a billion, shifting leadership, HP drops and adds?

There is more, much more here, and it is not all Dark.

At first I didn't HP had the savvy to change; I think differently now.

I was talking about the HP situation with a colleague the other day, cube to cube.  He is somewhat market savvy.

His insight is a common one: this move is purely a response to stock holder value and recognizing change.

Take out all the emotion around this shift.  And look at it this way:  HP is a public company judged completely on profitability and shareholder value - that's all.  The machine is not concerned about employee morale, saving the earth or carbon footprints.  The machine does not sweat.

And for us to think differently is naive.  For us to project this human quality onto a corporation is foolish.

The machine is built to return value to stockholders.  The Captain is charged with guiding the machine into profit.

As clumsy as he may appear, Leo is steering the leviathan into new waters.

Yes, the communication of this course change was unbecoming of a company with such a high-intent pedigree - but the message is clear.

There is no future in PC's.  Profit from PC's has been and will continue to shrink.  It is time to leave The Cove.

What if HP is right?

Undoubtedly, HP believes she is correct - but what if she really is correct?  Spinning PSG essentially creates a $40 billion start up.  A brand new company whose sales are almost twice that of the nearest competitor's. Not a bad deal.

But what if PC usage is really declining?  What if fewer companies are refreshing desktops?  What if more and more thin clients, smart phones and tablets are accessing the ever growing cloud?  How about those cheap, zero-client things from Samsung?

What if somebody at HP sees PC sales drying up in the next two years?  I mean, for the world's largest PC manufacturer to get out of PC's it takes foresight, smarts, vision and balls.

Can you see the new technological landscape?  How may IT staff are going to find themselves "rationalized"?

How about the channel?  HP intends to get into the cloud, sell services and software - direct.  Remember when there was a ComputerLand/MicroAge/Inacomp computer store in every city?  And how crazy a thought it was at the time to consider IBM ever getting out of the PC market?

For the VAR channel, the message is clear, transformation now.

The New HP is the old IBM - Remember when IBM sold printers?

There is a good deal of comparison between IBM of the 90's and today's HP.  Indeed, the process looks to be very similar: hardware company sells or spins off all it's peripheral divisions to evolve as a services provider.

IBM sold off Lexmark,  in 1991 and held on to the PC division, Lenovo, until 2004.

How long do you think IPG has?

No surprise really, this past March -

March 21, 2011 5:00 AM

Léo Apotheker's vision for Hewlett Packard is a familiar shade of Big Blue.

By Kevin Kelleher, contributor

Apotheker outlined an appealing if vague future for HP:

"...An open, online marketplace where consumers and companies alike could buy apps; Features like infrastructure-as-a-service and platforms-as-a-service that allow companies to tap into cloud-based software; 100 million devices running webOS, many of which will connect to HP's infrastructure..."

Some investors were hoping for much more -- a radical restructuring maybe, or plans to spin off the low-margin PC division.

What they got was Apotheker's anodyne vision of an evolving IT industry, the disruptive force of cloud computing, and HP's role as a soup-to-nuts provider.

"All of us need a trusted partner to navigate this new world," he said. "Who but HP could deliver this leadership?"

VARs, MSP's, and channels all around, now is the time to transform.

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