HP kills tablets, confirms PC spin-off plans

HP also confirmed it is in acquisition talks with software maker Autonomy

By , IDG News Service |  IT Management, Autonomy, HP

"Autonomy focuses mostly on search and analytics of unstructured data and databases, which includes information that typically can't be captured within traditional relational databases," King said. It has grown a healthy business in the enterprise content space: Autonomy reported revenue of $870 million for 2010.

Traditionally, HP's enterprise services and hardware sales have dwarfed its software sales. For fiscal 2010, services generated almost $35 billion in net revenue and enterprise hardware generated $18.5 million, while software brought in $3.5 billion. Autonomy's sales could push that figure past the $4 billion mark

While starting in the enterprise search space with in-house technology, the company expanded its software portfolio through its acquisitions of Verity in 2005 and Interwoven in 2009. It also acquired informational governance software from CA Technologies in 2010.

Such a software portfolio would be "a natural complement to HP's efforts and technologies" in the enterprise content space, King said. It would dovetail particularly well with HP's Vertica database and 3PAR data storage products.

The software would also give HP a foothold in the emerging big data space, where it could build systems to compete with EMC's Greenplum and IBM's Netezza. "Both [of those] companies consider Big Data a market with a potentially huge future," King said.

In March, then-newly appointed HP CEO Apotheker announced that HP would concentrate more efforts on the data analytics and big data markets.

The PC business is the first obvious domino to fall as Apotheker tries to bring profitability to the company, said Ezra Gottheil, senior analyst at Technology Business Research.

"It's a much more exaggerated consequence of the [direction] the company decided to go with Leo Apotheker. Clearly the board wanted higher margins," Gottheil said. However, "HP will be challenged to drive software to be the kind of generator of profit that it is at IBM," Gottheil added.

But HP does potentially have something to lose if its PC business goes away -- such as some of the leverage it has in buying high-end server parts, Gottheil said.

(Joab Jackson in New York contributed to this story.)

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