When HP suddenly jettisoned the TouchPad and webOS a couple of weeks ago, the move shocked me because it made no sense whatsoever to dump the company’s chief mobile component. webOS and TouchPad gave HP some mobile street cred in its battle with Google, Apple and Microsoft and it gave the PC division a mobile piece it was sorely lacking.
Today, as I read about HP’s plan to spin off the PC division–which means keep it, but run it as a separate company–it makes even less sense. While the PC has a long life ahead of it, as many have written we are clearly headed into a post-PC era and this is especially true on the consumer level as smart phones and tablets replace PCs for tasks such as email, reading, playing games, watching media and so forth.
Writing on Twitter today, analyst Michael Gartenberg, criticized HP’s decision to ax the TouchPad saying:
“HP forgot the Tablet market right now is a marathon, not a sprint. It was about going the distance not speed.”
He’s right of course. HP had barely had the device on the market for 6 weeks (49 days to be exact). To just give up on it and sell off every webOS device in a cut-price fire sale makes little sense and doesn’t bode well for CEO Leo Apotheker’s leadership or vision.
Any future that doesn’t include mobile is doomed to failure in my view and revealing his plan to trash webOS devices in such a public way was simply bad business. In fact, one former HP board member was quoted in the New York Times as calling HP’s plans corporate suicide:
“I didn’t know there was such a thing as corporate suicide, but now we know that there is,” a former H.P. director, the venture capitalist Tom Perkins, told me this week. “It’s just astonishing.”
It’s hard to argue given the speed with which Apotheker has take a once mighty company and driven it straight down, apparently along with stock prices, which fell mightily on the day after HP announced it was giving up on the TouchPad and webOS, selling or spinning off its lucrative PC division and overpaying for Autonomy for $10 billion.
But the worst decision in my view is the one to walk away from the mobile strategy set in motion by former CEO Mark Hurd, who started this downward sprial when he was caught in scandal last summer and was forced to resign by the Board of Directors.
In fact, Oracle CEO Larry Ellison, who is never short of bombastic opinion, likened the firing to the canning of Steve Jobs at Apple in the late 1980s. I’m not sure I would go that far, but so far it has turned out to be a horrible move, made worse by hiring a man lacking any vision whatsoever in Apotheker (much like John Sculley, the man who replaced Jobs back in the day).
If HP wants to keep its PC division as a separate company, great, but to do so without a tablet and smart phone line is a recipe for failure.
In another bizarre revelation to this twisted tale, The LA Times reported today that HP may in fact bring back the TouchPad after the company spins off the PC division.
If you’re anything like me you are completely confused at this point, because if that’s the case, the TouchPad was on the market already and there was no good reason to kill it–only to bring it back at some point.
At this point, HP has lost so much credibility in the mobile space, that trying to lure back burned developers, suppliers and dealers is going to be nearly impossible.
The mobile space is so competitive to begin with, but by making a series of perplexing decisions, HP has just made it even harder for themselves and for what appears to be no good reason that I can see.
Nokia appears to be stuck in Purgatory saddled with a large inventory of phones they apparently can’t sell anywhere while waiting for the next generation of Nokia phones running Windows Phone 7.
ZDNet reports that Nokia CEO Stephen Elop said in a conference call that his company was unable to compete against Android phones in China, leaving them oodles of unsold inventory. Nokia’s getting slammed by Android in Europe too. Elop must wondering why he left his comfortable position at Microsoft to take over a train wreck.
But the real question is: What can Nokia do about this situation? It looks as though it plans to write off 2011 and hope against hope that the Windows Phone 7-equipped phones will save the company’s butt. If not, they are in a whole heap of trouble, son.
Nokia is hoping to release the first Windows phones some time in the fourth quarter this year, but what happens in the interim? Do they sit back and watch the company bleed red ink? A once highly profitable company is heading very quickly into the toilet. The Wall Street Journal reports that “analysts are getting grouchy.” I don’t doubt it.
Investors also ran fast from Nokia after hearing the news. Charles Arthur, from the Guardian, from whom I learned about this story on Twitter, reported that stock prices plunged 15 percent on Tuesday after Nokia released its dismal numbers.
As Arthur pointed out, however, Nokia is still a formidable company. “…it is still the biggest maker by volume of both handsets and smartphones, selling about 100m and 24m respectively per quarter…” But I have to wonder if those numbers will hold this year.
For now, Nokia went so far as to say it will no longer provide projections for the remainder of the year. Who can blame them? They are stuck with a large inventory of phones, running an OS, they have stated publicly they will no longer support.
From an IT perspective, you are probably much like those analysts, grouchy and getting grouchier by the day. Who would buy Nokia phones at this point? The logical thing would be to either buy other phones or if you wanted Nokia products to wait until the new Windows Phone 7 phones come out and then decide.
For now, Elop through his strategy has put his company in a very difficult position, and he really has no one but himself to blame. He took his company down this path and now he has to live with it. Nokia is too big to simply fail after one bad year, but when 2012 comes around and the transition to Windows Phone 7 is in high gear, Elop better hope his gamble pays off or Nokia could be in serious trouble.
Photo by plural. Used under Creative Commons License. ]]>
I don’t tend to go negative when it comes to the cloud, but the story earlier this month that Amazon Web Services cut off WikiLeaks for “violating the terms of service,” gave me pause. Instead of running scared, however, it could be a good ‘teachable moment’ about understanding your Terms of Service.
In a post on the Wall Street Journal’s Tech Europe blog, Ben Rooney reported that Dr. Joseph Reger, who is CTO at Fujitsu Technology Solutions, said that Amazon’s response to WikiLeaks showed a need for industry standards around the cloud. That’s because in his view, if it could happen to WikiLeaks, it could happen to you, and he has a point.
I’m sure Amazon feels it was in the right because it says WikiLeaks was using content that didn’t belong to it. Well, yes, technically it was, but it wasn’t a pirate site by any means Would Amazon have shut down the New York Times web sites if it had been using Amazon Web Services? I think not. So while Amazon’s lawyers are probably off the hook, as Dr. Reger pointed out, what they gained in legal points, they lost in public perception.
That’s because they played into the biggest fear that cloud critics have, and that’s the general sense of unease when your content sits on somebody else’s server and is in another company’s control. If Amazon decides you aren’t playing by the rules, you could be in the penalty box and your business severely compromised.
What’s most disconcerting about this action was the arbitrariness of it. It wasn’t a law enforcement official or a court ordering the content be taken down (although there were reports of State Department pressure). No, it was the lawyers at Amazon making the decision, and that should be frightening to everyone.
What this shows is the importance of understanding every word in your Terms of Service (ToS). In the new brave new world of IT responsibility, negotiating the ToS with cloud providers like Amazon is going to be Job One. Don’t rubber stamp it. Make sure you and your organization’s lawyers understand every word.
If you’re not happy, negotiate. And one point you should always place in the ToS is that under no circumstances will they shut you down without written notice and sound legal reasoning (meaning a court or legal authority has ordered it),
There really are a lot of positives about going to the cloud. This idea of only paying for what you use is very attractive, but there have to be clear rules about up time, governance and who can take your service down (and as Reger said, these should be codified into an industry standard). In my view, if you haven’t received a court order, you better keep me running. You don’t ever shut me down because you feel uneasy about my content (as with WikiLeaks).
WikiLeaks has been an object lesson on so many levels and the shut down at Amazon just provides one more–this time for IT professionals. The cloud has positives and negatives like any other approach, but you can reduce those negatives with smart planning and a clear ToS. If you haven’t learned this by now, you never will.