Hewlett-Packard Company Is Becoming Microsoft’s Biggest Enemy

Hewlett-Packard, a long-time Microsoft partner, is shifting its support to Google.

Jan 22, 2014 at 10:00AM

Forget Apple and Google (NASDAQ:GOOGL) -- Hewlett-Packard (NYSE:HPQ) is quickly emerging as the biggest threat to Microsoft (NASDAQ:MSFT). Although the company remains the largest seller of Windows PCs in the US (and the second largest in the world), Hewlett-Packard is increasingly undermining Microsoft's business.

Based on a number of recent initiatives, it is clear that Hewlett-Packard is in the midst of a transition -- from Microsoft's partner to Google's. As the manufacturer many turn to when they need a new PC, Hewlett-Packard is uniquely positioned to devastate Microsoft's business.

Hewlett-Packard pushes Windows 7
Earlier this week, Hewlett-Packard made headlines by "bringing back" Windows 7 "by popular demand." While the promotion is more marketing gimmick than actual policy change -- Hewlett-Packard never stopped selling Windows 7 PCs -- the move is still not good for Microsoft.

On the surface, Hewlett-Packard is inherently siding with Microsoft's critics, tacitly admitting that Windows 8 is a terrible product. But more significant is the long-term consequences the move could have on Microsoft's attempts at transiting to a world centered around mobile computing.

Microsoft needs people to use Windows 8. The sooner they start using it, the sooner they'll come to terms with the major interface revisions (like the removal of the start button), and the more interest developers will have in Microsoft's Windows 8 App store.

The longer people stay with the Windows 7, the more Microsoft's operating system will remain dependent on traditional PCs. If Windows is going to have any place in the world of mobile computing, Windows 8 needs to become ubiquitous and familiar.

Going after Windows Phone in emerging markets
Then, there's Microsoft's attempt at bringing Windows to smartphones. When Microsoft announced that it was acquiring Nokia's handset business, it argued that the success of Windows Phone would boost PC sales -- that users of Windows Phone would naturally choose PCs running Microsoft's Windows.

Evidently, Hewlett-Packard doesn't buy that logic. Or if they do, they don't plan on selling many Windows-powered PCs for much longer. When the company unveiled its two smartphones earlier this month, it could've used Windows Phone to power them -- but it didn't. Instead, it chose Google's Android.

Hewlett-Packard's decision is all the more noteworthy given the market Hewlett-Packard is competing in -- India, one of the only countries where Windows Phone is popular. Nokia's (soon to be Microsoft's) Lumia 520 was a major success in India, helping Microsoft's Windows Phone become the second-most popular mobile operating system. Launching a Windows Phone-powered device in India could've helped the operating system to grow further -- instead, Hewlett-Packard backed Google.

Chromebooks and an Android-powered desktop
Hewlett-Packard's support of Google isn't limited to smartphones. The company embraced Google's Chrome OS with both hands last year, releasing three different Chromebook models in 2013.

More recently, at the Consumer Electronics Show earlier this month, Hewlett-Packard unveiled a radical new desktop PC. Instead of using Microsoft's Windows, Hewlett-Packard's new  21-inch, all-in-one PC is powered by Google's Android.

Obviously, Google's operating systems are a threat to Microsoft's Windows, as any consumer that buys Hewlett-Packard's Android desktop or one of its Chromebooks is probably substituting it for a Windows machine. But it isn't limited to lost Windows revenue -- as Microsoft has not released a full version of Office for Android, and its cloud-based version of Office remains limited, Chromebooks and Android-powered PCs weigh on Microsoft Office as well.

From ally to competitor
Last fall, Hewlett-Packard's CEO Meg Whitman labeled Microsoft a "competitor" -- the company is living up to that label.

As users increasingly flock to mobile devices, Microsoft needs Windows 8 and Windows Phone to be successful -- otherwise it's operating system business could fade into irrelevancy. Moreover, as it has stubbornly refused to release full versions of Office for other operating systems, fewer Windows users results in fewer Office customers.

Rather than support its longtime partner in this transition, Hewlett-Packard is increasingly working to block Microsoft's progress -- pushing Google's operating systems over Microsoft's, and limiting Windows 8 adoption.

2 words Microsoft's Bill Gates doesn't want you to hear
There are few things that Bill Gates fears. Cloud computing is one of them. It's a radical shift in technology that has early investors getting filthy rich, and we want you to join them. That's why we are highlighting three companies that could make investors like you rich. You've likely only heard of one of them, so be sure to click here to watch this shocking video presentation!

Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers