For new Hewlett-Packard (NYSE: HPQ) CEO Leo Apotheker, the way forward is cloudy.
Speaking yesterday at an investor conference, Apotheker said cloud computing would play a big role in the company's strategy from here on. "Yes, HP is strong, but we also recognize that the world around us is changing faster than ever," The New York Times quotes Apotheker as saying.
He's right about that. The world is changing, fast. Cloud computing specialists are growing at a tremendous pace. Among the principals, salesforce.com (NYSE: CRM) finished last quarter with close to $1 billion in backlogged sales. Revenue improved 29% to $457 million during the quarter, easily besting analyst estimates.
The message? On-demand alternatives such as salesforce.com and NetSuite (NYSE: N) have become mainstream. Apotheker seeks to blunt the threat from these and related offerings by working with existing clients to host their data and allow them to access it from anywhere. It's an interesting strategy that's likely to trade some hardware sales for higher-margin software and services sales.
Apotheker also plans to bulk up HP's offerings in business analytics, The Times reported. Apparently he views analytics as an open market with no clear leader. "We are not playing catch-up to anyone, particularly IBM (NYSE: IBM)," The Times reports Apotheker as saying.
Uh-oh. Big Blue is far ahead of not only HP but also many others when it comes to analytics, having acquired Cognos, Netezza, and SPSS in recent years. There's also Teradata (NYSE: TDC) to consider. The data-warehousing specialist recently bulked up its analytics portfolio by acquiring Aster Data.
Color me concerned. Much as I like that Apotheker sees a need for HP to modernize, wishful thinking doesn't equal a strategy. Right now, that's all he has. I'm sticking with the short thesis I first offered in October.
Do you agree? Disagree? Let us know what you think about HP's assets and Apotheker's strategy using the comments box below.
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Editor's Note: This article has been changed to reflect that IBM acquired Cognos, not Business Objects. The Fool regrets the error.
