Dave Michels
Dave Michels is a Principal Analyst at TalkingPointz. His unique perspective on unified communications comes from a career involving telecommunications...
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Dave Michels | August 23, 2011 |


Is HP's PC Move a Harbinger for Phones?

Is HP's PC Move a Harbinger for Phones? The desktop isn't dead yet, but HP shifted the conversation. Will the desktop phone be replaced by the PC? Will the whole desktop be replaced first with a tablet?

The desktop isn't dead yet, but HP shifted the conversation. Will the desktop phone be replaced by the PC? Will the whole desktop be replaced first with a tablet?

Last week, HP stunned observers with two major announcements: WebOS would be no more and the PC business is for sale. Are these decisions indicative of new times or just a new CEO? "A little of both" is the safe answer, but really these decisions have the most to say about the iPad--perhaps the post-PC era really has begun.

For years now, the UC world has debated the ongoing justification of desktop phones. Will phones be replaced with the more powerful, more intuitive softphone and headset, or are phones here to stay as a single purpose, always-on, optimized familiar device? Suddenly the debate changes: Does the desktop computer itself have a future, and if not, does that actually extend the desktop phone's future?

HP thinks the PC business is too low margin, and the company hasn't been successful with going upmarket in a commodity business. The decision represents a major flip-flop for CEO Leo Apotheker, who just a few months ago said that being in the PC consumer business gave HP a strategic advantage, arguing that this made sense due to the consumerization-of-IT trend. However, last week, Apotheker determined , "to be successful in the consumer device business we would have had to invest a lot of capital and I believe we can invest it in better places." Such as Autonomy, maker of information management software, for a mere $10.3 billion.

Yes, the world's largest producer of PCs, Microsoft's largest customer, just declared it is time to get out. The official reasons were low margins, but PC sales are also declining, as are the reasons to buy them. What HP intends to establish is what what will become known as a milestone event, a milestone in the transformation of personal computing to mobile devices powered by cloud services. Apple, the architect, is supremely positioned and may indeed wind up with the last laugh in its quarter-century struggle against Microsoft.

The iPad will be what history records as the proverbial last straw. For years, organizations have been grappling with the increasing complexity of IT. The PC was the device that unlocked IT from the glass house and empowered the desktop. But slowly the barriers to control came back--security concerns, virus management, retention policies all conspired to strip the individual of computing freedom, and increased the cost (and security challenges) of IT. All of this was legitimate and easy to understand and endorse. Centralized computing returned as the norm.

This turned out to be fairly convenient as mobility took off. We were portable (mobile), but our data wasn't. For years we took our laptops to and from work and on extended travel. Multiple computers were always out of sync. For the past decade, the industry tried to improve remote productivity with various evolving tools--MS Briefcase, Citrix, RDP, Tarantella, MS Terminal Server, and others.

Concurrently, Apple's smartphone model took hold and mobile email became standard. The term "Crackberry" to represent email addicts disappeared because it turned out that being connected had nothing to do with the device, but rather the content. Email on-the-go fueled the mobility sector at the cost of the desktop sector. We've been moving our data off the desktop and back to the data center or cloud. Broadband, especially through 3G/4G and wi-fi, made connectivity reasonably ubiquitous in the US, and truly ubiquitous in other parts of the world. The iPad, introduced only 16 months ago, allowed truly mobile productivity with very little local data. And unlike the desktop, all age groups seem to enjoy it.

It isn't just the iPad that threatens the PC; Google's efforts with Android and the Chromebook also are dragging down the desktop computer. The cloud-ready Chromebook is available to schools for $20/mo with support --far less than a PC and with no moving parts. The justification for buying a desktop computer is burning to the ground, and Microsoft itself is fanning the flames with Office365. Microsoft's cloud decision was no doubt full of strife, but critical to remaining relevant, and represents yet another milestone.

So much for HP's moves with regard to the PC market. The WebOS announcement is a slightly different matter. WebOS is generally considered a reasonable and viable solution. A solid product backed by a huge marketing campaign is normally a safe bet, but all bets are off when you're up against Apple. HP didn't have the volume (or indirect revenues) to match Apple on price, and certainly didn't have the apps to match the functionality. HP had no business taking on the iPad, which Apotheker understood.

Though outright killing WebOS is probably an even bigger mistake than purchasing Palm in the first place. HP wants to sell to enterprise and industry markets that also need to embrace mobility and tablets. Rather than taking on Apple on its consumer turf, HP realistically had a far better opportunity with specialized tablets optimized for various verticals such as health care and transportation: WebOS devices optimized as tools of the trade, such as nursePads, or potentially housed in the back of airline seats for entertainment and shopping.


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