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Comment by aresant | Hacker News Reader

Barron's nails it:

a) "decision to cease all webOS devices (including the TouchPad) a mere 48 days after the launch" - Leadership doesn't know what they're doing w/acquisitions.

b) "expensive acquisition of Autonomy" - $10b to jump into a new market via acquisition which we just proved we're not good at.

c) "material layoffs" and "talent drain over the next 12-24 months' - I believe this. Current talent bails. Changing focus means new recruiting, years of training / efficiency building.

As a shareholder, ouch.

via:

http://blogs.barrons.com/techtraderdaily/2011/08/19/hp-drops...

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You forgot the "we're refocusing ourselves to our core competency as a software company". HP hasn't had competent software for years since HPUX and even then, it's questionable. They are a hardware/printer company so this is going to be a painful transition for them.

Unfortunately in the enterprise space, competent software isn't necessarily a requirement.

That is changing, albeit slowly.

Not really. I doubt it will ever change. Why do you say it's changing? All the same BigCorp programmers I know remain employed...

The Java and .NET ecosystems seem to preach a better/agile way to develop software: Continuous Integration, unit-tests, keep it simple, etc.

Sure, some of the code are still crappy, but at least they are less crappy than yesterday.

Are all of BigCorp programmers doing this? No.

Will they? maybe, especially with the newer/younger generations.

Mobile and tables are making in-road to enterprise.

Enterprise slowly decided to give cloud (SaaS, not the other *aas) a chance because they don't like to have in-house IT departments (whether this is good or bad I don't know).

When you see BestBuy using Google AppEngine even for their simple app, I think that's a sign of change.

Is it going to get better all across the board? probably no. But they're changing nonetheless.

> HP hasn't had competent software for years since HPUX and even then, it's questionable.

I just going to say it like this: There was a reason HPUX bit the dust.

It kind of rankles when I hear people say HP is a "printer company" (I know you also said "/hardware', but still). You could just as reasonably call them a "calculator company". They're also the company behind the PA-RISC. When people lament the lost engineering culture at HP, they're not feeling bad for the printers.

That's a Wall St. view that completely misses the point. You could look at it very differently. The new CEO is making some bold moves to undo a bunch of bad decisions his predecessors made.

Buying Palm was nonsense. HP was never the company to make it work. Contrary to that, Autonomy, one of the best software companies in the world, is a good fit for HP's enterprise strategy.

Spinning off the PC business is very likely a step towards selling it altogether, similar to what IBM did years ago.

I think these are all steps in the right direction and I'm thinking of buying the stock once the current stock market panic has settled down a bit.

Isn't it better to buy stock in the midst of the panic?

The best time to buy is when a panic subsides. It's better to miss the first 10% of a recovery than to lose 20% catching falling knives. That's what I have learned painfully in 2008. (I just wish hadn't forgotten it by 2011 :)

How do you know that +10% is after the bottom and not a temporary bump on the way down?

You could look at trading volume to determine whether the stock has "settled down". That would at least indicate decreased volatility.

I don't, but at that point the fundamentals matter again. The decline isn't self feeding any longer.

Most investors set stop loss levels for themselves. So when a stock crashes through those levels it triggers a lot of sell orders which makes the stock go down more triggering more stop losses, etc. Once the cascade has stopped, the game changes a little bit and fundamentals are reconsidered.

[Edit] And I didn't mean a 10% bounce immediately after the fall, but rather a gradual move up over the course of a few weeks.

> Autonomy, one of the best software companies in the world,

By what metric? From my perspective they are reviled by their clients and their own (engineer) employees.

They sell a lot of software to those unhappy clients, very similar to other hated companies like Oracle.

HP at a 20% discount is looking pretty good... ~50billion market cap, 5.8 p/e, 2% dividend, and they're getting out of unprofitable sections of their business. At risk of being cliche, think of it as failing fast and pivoting. Go big or go home kind of thing. Success is far from certain but it may be better than staying the course and crashing into the beach.

Also, that $1.2 billion isn't going to look like such a bad investment when Apotheker sells the Palm patents to Apple or Google or Microsoft or Samsung for 5x that price.

In this case getting out of the business of making stuff was probably the right thing to do. Blame the US patent system, not the HP execs. The decision would've been an easy one after the Motorola sale.

I have to give the HP board the benefit of the doubt that when they hired the new CEO they knew he'd steer them in this direction. He used to work at SaS so his expertise is software services. He must have told them in the recruitment/appointment process that he'd give some things a shot (webOS, TouchPad etc.) and failing that, he'd steer them towards services and become more like IBM.

I made a lot of assumptions, but again, giving people benefit of the doubt.

>He used to work at SaS

SAP.

Thanks for the correction. Freudian slip perhaps.

Heh, well, maybe what they need is SAS.

I think the most interesting and least talked about thing is b) "$10b to jump into a new market via acquisition which we just proved we're not good at."

HP has never been good at software. Hands up, who fondly remembers a nice HP software experience? Who remembers a hair-pulling awful one?

(And before you say webOS; please, webOS is nicely designed, but engineering wise it's bug ridden and terrible.)

Does anyone have any experience with Autonomy and its IDOL technology? I visited their site and they look a little bit shady :)

I used to run their dev servers (briefly back in 2001). I don't entirely understand what you mean by shady but the tech does work - and provided you use it for the right thing, extremely well. The key is to realise that it tries to be a semantic search, not a text search - if you want brute force grep you'll be better with a google search appliance or similar, I suspect.

The development team were well looked after and the CEO now is the same as then, so I'd hope the internal culture is still pretty pleasant - I really enjoyed working there and most of the employees genuinely believed in the product's ability to deliver (when not mis-sold, which, well ... seemed to happen reasonably rarely, which is about the best I've seen in any sales department). I only left due to discovering I really HATED living in Cambridge, which wasn't really something they could fix.

Ive used idol very extensively for approx 5 years. Its like combining oracle db with google search and then adding language analytics. Basically its a very advanced db (these were the first guys to really get nosql into the enterprise). You dont query the db, you search it. Keyview is also a nice addition to the IDOL stack.

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