UPDATED 12:47 EDT / JANUARY 07 2011

NEWS

Leo Apotheker has a Lot to Think About for Hewlett-Packard in 2011

As a business, HP has been well known in the past for their computers and printers. In fact, they made their name on printer hardware when ink and print-heads were literally the black gold of the industry and they’ve been riding that wave ever since. However, with the new decade rolling around, there’s a lot of decisions to be made about where to take the company and how to take it there.

Leo Apotheker, who became HP’s new CEO in November 2010, took over after their last CEO, Mark Hurd, stepped down over a dramatic scandal.

According to some analysis done by Steve Lohr over at the Bits blog of the New York Times, HP may be in for a bit of a course change when it comes to the 2010’s vs. 2000’s as various industries reorganize themselves to tackle an age of high bandwidth and easy storage. No longer seeing it sufficient to just sit in the realm of hardware and printers, H-P may be forging into deeper waters occupied by the software-as-service industry.

Mr. Apotheker’s two predecessors in the last decade, Carleton Fiorina and Mark V. Hurd, each arrived at H.P., looked things over and made big moves to make the company even bigger. Ms. Fiorina acquired Compaq in 2002, a controversial step that enlarged the PC business but started a proxy fight. Under Mr. Hurd, H.P. added to its corporate businesses, especially in services with the purchase of E.D.S. in 2008.

The services business is now H.P.’s biggest profit contributor, accounting for nearly 40 percent of its operating earnings last year.

Mr. Apotheker, former chief executive of the big German business software maker SAP, was clearly brought in to guide the evolution of H.P.’s corporate business.

H.P., Ms. Huberty said, is “trying to move to become a services-led business,” more like I.B.M. And less reliant on hardware sales — less a “box pusher,” as Ms. Huberty put it.

That seems like an extremely long winded way of saying that HP sees a lot of profit potential in the services industry. Especially noting that others have done extremely well for themselves in similar vein: such as Dell acquiring Rackspace as a foray towards the cloud and SaaS (Software-as-a-Service). The SaaS industry itself, in fact, may prove to be extremely lucrative for those companies already thoroughly entangled with it such as Google, Microsoft, and others—but they’re already working on generating their own data centers and cloud resources on the ground.

HP seems to be extremely well situated to offer those concentration points across the world, they’ve already mastered producing and networking the hardware, after all.

Still, this is mostly just speculation tied to the words of a few analysis and PR spokespeople from HP themselves. The direction that Mr. Apotheker may or may not go into the broadening horizons seems pretty open.


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