HP Looking To Cloud For The Future
If you’re a new CEO and are looking to put your own stamp on a company upon starting, look to HP’s Leo Apotheker for inspiration. On Monday, Apotheker outlined his vision for the company and many came away impressed with his words. Citing cloud services, connectivity, and webOS, Apotheker has laid the foundation for the future of the company. Now, it’s time to see if something can be built on it.
Opening on Tuesday, HP’s stock took a hit and is currently trading at $40.72/share. A $0.75 decrease from yesterday. This can be attributed to talks of “new directions” and “long-term strategy“, as such terms can lessen the confidence of investors.
Apotheker mentioned cloud services as a market HP plans to invest heavily in moving forward. He even promised to deliver a cloud infrastructure in 2011. Services HP will offer include an app store, along with other programs for enterprises.
To coincide with their cloud services, HP will move forward with their expansive plans for WebOS. Last year, HP purchased Palm and looked to their WebOS platform as an investment opportunity. Last month, HP laid out their list of devices which will utilize WebOS: HP TouchPad, Veer and Pre3. Of their plans for the mobile space, Apotheker believes there could be 100 million devices a year running the WebOS platform.
Bill Shope, an analyst at Goldman Sachs, had mixed feelings towards the CEO’s plans, “We were impressed with the new CEO’s long-term vision, and agree with his view on the areas where HP needs to focus in coming years” he continues, “Nevertheless, we still believe the company is underestimating the costs of its current transformation and the resulting risks to medium-term margin stability.”
The obvious problems ahead for HP come from staunch competition they’ll be facing in the new markets they plan to dive into. On the cloud side of things, Oracle and Cisco are established companies with renowned products. Their mobile plans will be going up against the two-headed monster of Android, and iOS.
While HP has a tough journey ahead, sometimes it’s bold words and plans that are needed to come up from a rut. Ever since the abrupt exit of ex-CEO, Mark Hurd, the company has been sliding backwards. Their stock has been down 20% the past year.
Apotheker has laid out the plan, now it’s time to see how HP handles the follow through.