February 3, 2006 1:35 PM PST
HP sees opening in software on the Net
That doesn't mean HP is done with the cost-cutting that has characterized CEO Mark Hurd's first 10 months in charge, Shane Robison, the company's chief strategy and technology officer, said at a press event at its headquarters here. That will continue, as will HP's ongoing focus on growth through services, software and mobility.
Robison said he believes software delivered over the Internet represents a huge area of growth for the technology industry.
"You're going to see a whole new wave of innovation that will come from just programming to the Internet," Robison said, during a wide-ranging briefing on HP's strategy for the upcoming year.
The company's acquisition of online photo service Snapfish last year was an example of how HP thinks it can use interesting Internet applications to bolster its traditional hardware business, he added.
"The Internet as a platform is ubiquitous," Robison said, noting how broadband has helped aid this process.
He compared the arrival of the Internet to the evolution from mainframes to PCs, in which the desktop became a common device. As a result, software developers began to write a plethora of "cool" applications to go with it, he said.
HP needs to find new places to grow, as its traditional hardware markets continue to mature. The company is looking to expand its infrastructure software portfolio through possible mergers and acquisitions, and improving its direct sales operation.
"We have to have the best cost structure in the industry to free up capital to invest in new areas," he said.
Robison wants HP to develop products, services and software that tie into the concept of programming for the Internet, and he noted the company's chief executive, Mark Hurd, shares that view as well.
"Mark has discussed mobility. But mobility and programming for the Internet are one in the same," Robison noted.
Mobility for HP ranges from mobile services to mobile products for large corporations. Robison cited HP's arrangement with Verizon Wireless, which was announced in September.
Under that deal, Verizon is embedding its wireless broadband technology into an HP notebook that was unveiled at the CES show in January. Verizon is also providing access to its EV-DO (evolution data only) network for Dell and Lenovo customers.
HP is also focusing on making a greater push into managed services, Robison said.
In that area, the bulk of HP's business comes from technical support for its products. But the company foresees managed services, which entails having customers outsource their work to the computer giant, as another great opportunity.
That focus resonates more with HP than its consulting services business, in which the company would advise customers on the hardware and software components they needed and how to string them together. This is an area where competitor IBM has played a dominant role.
"With managed services, we have a lot of products we can pull through," Robison said, noting that it could involve both HP and non-HP products that are used for this endeavor.
The company is currently looking at ways to strengthen its services business in Europe and Asia, Robison added, declining to say which specific cities the computing giant is targeting.