HP's new CEO - Challenges Ahead

CEO from a software company seems to be logical step from two point :

1. After a big Services acquisition, strengthening software which is a high margin business (compared to HW and Services) makes sense.
2. Oracle and SAP have been well known foe..very vocal in terms of cut throat competition… new HP CEO might know how to react with an aggressive competitor in Oracle. (known fellows Larry Ellison and Mark Hurd)

My sense is HP will focus more on solution selling than playing in silo (HW, SW, Services). Though this is not going to be significant success in short term; they will definitely aim for.

EDS integration has not been easy/”huge” success.. heard that few components of EDS (read “Emphasis”) are pitching internally for autonomy. HP’s software business (though many components are very nice products) has not been able to establish strongly in the market place. New CEO comes from a strong application software background (SAP). A good solution story for HP will require relatively higher focus on infrastructure and management software than applications. Adding more pieces to this will not help unless they have great leader to weave components into a compelling story. High expectation/big challenges for the new CEO. I don’t see great successes in near term.

I feel it is going to be a new inning for HP in changed competitive landscape (big acquisition making SW/HW/Services conglomerates). It will have to counter an aggressive inroads into its traditional hardware business from Oracle-Sun hardware business spearheaded by the very Mark Hurd, transform sales force create and deliver a good solution sales story, better integration of EDS. Post-recession growth phase of global economy might give HP some growth number to show to investors, real sustainable growth seems to be at least one year from now.

I think competition in infrastructure (include cloud/data center) hardware is going to be cut throat in coming months/quarters. Management software will follow the suit hence no surprise to see many appliance kind of offering flooding SMB and (why not?) enterprise market.

Solution story is going to be complex... more like a riddle for customers as market is on a new learning curve where canvas is rapidly changing to cloud. Good times for consulting services they might get many invites from customer but at the same time it will be far tougher to communicate values to customer.