Sunday, January 15, 2012

Article of cover of business affairs weekly: The play of HP

Cover of magazine of business affairs weekly

Business affairs weekly magazine cover

The big company that is in cold winter of brutal competition and merciless economy to fall also is like the aircraft of headroom cruise, need maintains the balance of systematization. In this strong air current, some hundred years aircraft has fallen, some is tumbledown, some is acuteness and bumpy, only minority is able to maintain moderate flight stance, continue climb, HP company is among them one of.



4 years of time, one is immersed oneself in work " young worker " left shake right the firm heavy model that shake stabilizes for income, fight risk ability to exceed strong whole world supplier of the biggest IT. This enterprise is how around " cost " undertake self-remoulding, and pass output " the path of cost " the trade pattern with new exploration, the person that make oneself make the benefit of this economy crisis? There are long history and the company that deep culture insides information in, how is ab extra CEO its infuse new element, and be mixed to turn over bite by traditional platoon different? Right " the path of HP " different attitude, make the dividing line of the m dvd discovery best buy ost conclusive success or failure between two CEO



Dong Le of reporter of exercitation of reporter Feng Yu Ding



  The cost hierarch in in the winter



The IT company with the biggest whole world how around " cost " undertake self-remoulding, and pattern of new exploration business, the person that make oneself make the benefit of this economy crisis?



" base course of study is evergreen " , " from outstanding arrive outstanding " Collins of author Jim · (Jim Collins) , most popular selling dog stairs write newly in what he rolled out below the economic crisis setting of at present " how does big company fall " (How The Mighty Fall) . "Fall " one word lets a person remember the aviation accident that in the sky produces in Atlantic recently, investigation makes clear be in probably when encountering powerful air current, flight speed adjusts the pressure that causes afoul with air current, make plane disintegrate falls. Allow our disrespectful ground to make an example please: The big company that is in cold winter of brutal competition and merciless economy to fall also is like the aircraft of headroom cruise, need maintains the balance of systematization, greet with accurate flight horn is with attitude take advantage of an opportunity, still must have solid structure and powerful engine.



In this strong air current, some hundred years aircraft has fallen, some is tumbledown, some is acuteness and bumpy, only minority is able to maintain moderate flight stance, continue climb, HP company is among them one of.



Let us look to contrast in the outstanding achievement of the HP in economic crisis and other high-tech company. Be in up to the 2008 money October 31 year, HP annual sale 118.4 billion dollar, grow 13% compared to the same period, according to standard of American general accounting (the operation profit of GAAP) is 10.5 billion dollar, every accrual after fry batter in a thin layer is thin is 3.25 dollars, grow 21% compared to the same period.



In contemporaneity, microsoft appeared 23 years to come first income falls, net drops compared to the same period 1/3; Intel income decreases exceed 1/4, operatio the most popular selling dog crates large n profit drops greatly compared to the same period 68% , give out deficit early-warning for a time; The net that wear Er falls 48% ; Sun, AMD, Motolora, associate the money that wait signs up for the group is miserable more green.



Egg is not had under Fu mew, doesn't economic crisis have an influence to the outstanding achievement forms for reporting statistics of HP? The fact is not such. There are product of information of PSG(of branch of 3 big major servicings and business to use channel group below HP banner) , IPG(is printed picture with consumer goods group) , TSG(enterprise computation and) of professional service group, 2009 money year first quarter, HP sale is compared on year the corresponding period grew 1% only, operation profit (GAAP) drops compared to the same period however 5% . Because demand is atrophic, business of its personal computer (PSG group) with print like business (IPG group) sales revenue than going up the quarter all glides 19% , enterprise memory and server branch (ESS) income falls 18% , but service business (EDS) income grew 116% however, amount to 8.7 billion dollar, contributed the 1/3 of 3.1 billion dollar operation profit of company.



Newest the newspaper of money of the 2nd season that publish shows, HP only run closes to drop compared to the same period growth 3%) is after 3%(exchange rate is adjusted, operation profit drops compared to the same period 12% . PSG income falls compared to the same period 19% , IPG income falls compared to the same period 23% , ESS income falls compared to the same period 28% , but service business income grew 99% compared to the same period, amount to 8.5 billion dollar, operation profit is 1.2 billion dollar, exceeded company GAAP profit (2.3 billion dollar) half.



Make us comparative the history. 2009 season of the 2nd money, the income of HP PSG, IPG, ESS and service is respectively 8.2 billion dollar, 5.9 billion dollar, 3.5 billion dollar and 8.5 billion dollar, and 3 years ago, namely after heart of mark · conspicuous takes up the post of HP CEO formally one year 2006 season of the 2nd money, the income of branch of major servicing of these 4 HP is 7 billion dollar, 6.7 billion dollar, 4.3 billion dollar is mixed respectively 3.9 billion dollar.



In other words, the income of branch of the IPG of HP, ESS has glided under the level 3 years ago, the income of PSG glides under two years before, and service business achieved twice growth however, contributed company income nowadays 31% 52% with operation profit. because serve the strong performance of business, HP is able to carry relatively dovish state on income and profit, the acquisition that achieves a record the operation cash reserve in a bank of 5 billion dollar flows.



Structure of the income of HP, profit had produced essential sex to transform. Before He Delai HP, whole HP " the hen of egg issueing gold " it is IPG(print with into like business) , profit specified number was as high as 3.8 billion dollar 2004, occupied the 3/4 of entire company gross profit specified number. And serve business and IPG to go up to begin stand up to sb as an equal in income and profit contribution now, the profit that goes up to serve business first quarter / income comparing is achieved 13.8% , compare IPG in HP interior 18.2% low, but income is bigger than IPG 50% . The profit of PSG and ESS / income score is 4.6% with 7.2% , glide considerably than all having last year. IT website ZDNet.com is He Deping " 2008 year 10 have leader of consequence science and technology most greatly " one of reason of first are: Buy EDS and its antenna is outspread serve a field to IT, the printer business of HP also is able to withdraw house second line quietly.



So, if do not have service business to act as new engine, the other aircraft as good as in the add boat ability of HP and economic crisis. loony tunes golden



"After economic crisis came, everybody just knows He De bought EDS last year this pace chess has much key. " a HP stuff is right " business affairs weekly " say.



   "There is a scenario in our hand "



When HP is explaining nearly a few quarters serve the growth of business, all add on money newspaper note " main reason is EDS incorporates " . Before a few quarters, he De had proved " operation ace " deserve the reputations one enjoys, under the group that heads in him, the outstanding achievement of PSG and IPG had driving growth, condition was reversed already completely in hardware and consumptive market HP, but real challenge is in TSG(enterprise computation and major serve group) , the rival that it faces is blue giant IBM, and the cost killer that comes from India people. To EDS buying card to understand He De also is ace of a strategy.



But on May 13, 2008, announce when HP the price with ready money of 13.9 billion dollar is bought when IT serves tycoon EDS, when buying PC tycoon Kang Bai with the HP 6 years ago same, industry was full of the sound of doubt, personage of a lot of analysises thinks this is Hede lift harum-scarum.



With · of Li of card of CEO of the HP before doubt Feiaoruina differs, this the doubt of people does not buy an IT to serve a manufacturer around this, why want however and buy EDS.



EDS You Peiluo is special (H. Ross Perot) was built 1962, it is the originator that IT serves. He Kangbai is same, EDS also is once industry leader, it is turned over to exceed at acting 1990 end by the blue giant IBM that transition serves, it is right only then the tide that spends move at the Bao Xiangyin outside the IT 2000 reacts not as good as, although many later hire hands is abroad employee, bought company of MphasiS of an India person of the same trade accuse equity, but when be late already. EDS had the income of 5 billion dollar first quarter 2008, net income is 63 million dollar only, and the income of company service business of IBM of the corresponding period grew 17% , reach 14.5 billion dollar, and operation profit reached 1.57 billion dollar. Gartner data shows, EDS income growth was only 2007 3.4% , market share is cut to 3% , and the market share of IBM is 7.2% , income grows 12.2% .



In a few analysises the personage looks, EDS is undeserved buy, its employee salary is too high, the concept is old-fashioned, profit margin under HP, can pull the hind leg of HP only. And it does not go up to the competitive side of HP and IBM busy, because it tore apart its high-end business 2006,seek advice from Buddhist nun of sectional division Er (A.T. Kearney) , after buying it so, HP still cannot be mixed in advisory business domain IBM, dust the competition such as Sen Zhe. They think HP should be bought, or is dust Sen Zhe, the bag outside its BPO(business flow) with software business more valuable, or buys a dimensions less growth is rapidder outside the bag serves a company, for instance Indian CTS or Infosys, "Why should HP buy an old horse and be why should HP buy an old horse and young foal? "Why should HP buy an old horse and be why should HP buy an old horse and young foal??



The competitor also holds same point of view. According to " fortune " report, language of IBM vice-president department is special (say in the letter that Michael Svinte) gives him to sell a branch after HP buys EDS, "What HP buys is to be in what having a large number of able-bodied person high into competence region yesterday chrysanthemum, should catch up with at present the experience of IBM is mixed ability, HP and EDS spend time of several years even at least. This is the inning that we enl dog crates large best buy arge portion! This is the inning that we enlarge portion!!



Be asked about several times when He Demo why to choose EDS when this one problem, he always is the answer says, "No matter match a respect from financial redound or strategy,we just feel, EDS is our optimal choice. " the person that he urges those to worry for HP, "There is a scenario in our hand, we know how advantage of dimensions of utmost ground play, we spent what number hour will make this pile and buy to fulfil our duty to investigate and plan " .



Under the integral strategy that will buy EDS to put HP TSG group, see He De " the play in the hand " .



Do great service business, it is hertz heart at the beginning of assuming office with two assistant -- TSG president Li Fuma Er (Ann Livermore) holds chief strategy and technical Guan Luobin concurrently to inferior with executive vice-president (Shane Robison) , discuss the consensus that after how enlarging income to make HP becomes a big company, reachs. Ceng Zaihui general group of 4 big business has worked before Zhang Jian recalls general manager of department of facilities of government of ministry of sale of client of Chinese HP business, HP interior has realized at that time, "Should do the business big, have to rely on a service; Should do the business long, have to rely on software " .



A Li Fuma Er is HP " veteran " , she once crossed CEO position with competition blocking Li 1999, she took over TSG branch at the beginning of 2004, the state how terrib dog crates large breed le of this one branch arrives to be inspected at that time " the person do not amount to mark with the most conspicuous industry of information science and technology " , in those days in August, its quarter outstanding achievement makes of HP whole beforehand appraise income fell 33% , share price dropped 15% , wall street analyst thinks this branch value is very few.



In the market, the server of TSG, memory and service business get IBM and the converging attack that wear Er, its serve business basically is around his hardware the product spreads out, till 2007, above of the half in HP service revenue is to come from the computer that is his, printer and software to provide the income that supports a service. Can say, the service business of HP is main before buying EDS get hardware business drive, of this one tradition " after service " the as it happens of IT service mode of mode and IBM place delegate is contrary.



   "The La Hai of HP "



In August 2003, HP obtained company of clean of consumable tycoon treasure to be as high as contract of the bag outside the service of 10 years of IT of 3 billion dollar, this is HP is like service territory milepost project. Allegedly, overcame one pile challenge through this project HP, acquired the way to do sth that the business includes outside many services.



And the most significant gain, it is HP realizes the product of traditional research and development, trade pattern that provides after service must transform, because of the ceaseless progress as the technology, the IT defray of the enterprise more and more the carry safeguard that apt has IT system is optimized and dig go, is not to buy new product to undertake upgrading.



"CIO people care more today how the server from them, PC presses crush out efficiency even in the mobile phone, and rather than buys the machine that configured newest microprocessor. " collect guest abdicate says. It is especially in economic low ebb, more centralized hardware buys the home, need sells the home to offer from server, memory, all fronts product of the bag outside arriving again to software and service ability.



Should be in an enterprise IT market base oneself upon, HP must fill on oneself service is short board. But serving a field, HP how as powerful as actual strength IBM, and does cost wrap a tycoon to realize poor dissimilation outside cheap India? Li Fuma Er and the poor dissimilation that hertz heart chose a clarity are politic, that devotes oneself to to help business client control cost namely.



This is meant, the business that shows level HP TSG is main around move infrastructure and applied service spread out the IT of the enterprise. What Li Fuma Er depicts to the client is " involving the lamp " data center, basically do not need labor power. "Enterprise IT center is HP ' La Hai ' . " Chinese HP vice-president, software and Xie Shaoyi of solution department general manager are right " business affairs weekly " say, "We discover the IT section that serves for company automation, it is actually least of all of automation. Begin from 2006, the target of HP TSG is made so that mix with respect to the IT center that is a client surely business section is same automation. The target of HP TSG is made so that mix with respect to the IT center that is a client surely business section is same automation..



And the fixed position of IBM is the person that the advisory kimono Wu that uses oneself assists business management design business is politic. The CEO that because this someone says what IBM contacts,is a client people, HP is main with CIO people contact with. This also can explain, why of HP buying an object is not same with strategic be good at dust Sen Zhe.



HP does not plan to be in with IBM now same a fractionize market is direct competition -- it is a company that still is main income source with hardware business after all, and the 50% above that the service revenue of IBM already held gross earnings, smooth advisory personnel has 68 thousand person.



"HP won't develop the competition of give tit for tat with IBM instantly, had done oneself business first however. " Hede expresses.



Of course, also won't be India " young foal " , the company is included outside because the target of HP is not,becoming a low end to serve.



Hertz heart and Li Fuma Er know early to the understanding degree of EDS with respect to place of prep above industry, because be in 2005, of EDS " the member that gold is sold " Sidifu Smith (Steve Smith) finds new job to take up the post of TSG server branch to be in charge of to HP. He De values EDS, be it in the dominant position that IT includes a field outside infrastructure, and the actual strength in respect of business application software. In application software domain, EDS and SAP and Microsoft are maintaining close alliance; Business is safeguarded to go up in application, the income of EDS is achieved 4 billion, 5 billion dollar, for industry old.



More important is, EDS and HP have product line jackknife is few, "Match degree " highest. On complementary sex, the Mercury of vendor of application development software with the greatest whole world had been bought by HP 2006, the software of Mercury + the uses service capacity combination Ling Hede of EDS is excited unceasingly. At the same time EDS is the biggest client of the Opsware of supplier of data center automation that HP bought 2007. "If you notice data center automation and server government market, the software combination that we can offer will bring a client the largest dominant position. " He De says. The group of HP EDS business that holds leader of president Ron Rittenmeyer concurrently by former EDS president, CEO is current and dedicated at outside bag and applied service business, and HP TSG criterion still dedicated serve at server, memory, software and technology, and specific seek advice with compositive service.



In announcing to buy the press release of EDS, the strategy that HP described him wishs scene, this is He De " the play in the hand " : The first phase is to make professional work of global first-r dog stairs for car ate hardware; The 2nd phase is dedicated apply at developing a series of banner software, will put in administrative automation respect mainly particularly, aim to optimize the function of HP hardware, make its show itself in the market; The 3rd phase puts focus on the service, the target is the global tip supplier that becomes service territory.



IT industry analyses personage Sun Yongjie to think: "Buy EDS, in its and IBM competition were being made up for for the HP that surmounting IBM to hardware domain waiting in the server ' soft ' the inadequacy of actual strength, HP is cut from hardware likely, shake first the basis of IBM, serve the market to launch attack to its IT then. Serve the market to launch attack to its IT then..



  ata pciFrenzied scare buying



Be in afore-mentioned " He De's play " in, software business is regarded as coupling " hardware phase " and " service phase " bridge, such mission to the software business that income still is less than 1/30 of company gross earnings now, listen go up a bit exaggerative, but this is He De is sent with what Li Fuma Er has no alternative really look.



As the client more and more apt goes to having IT establishment to dig, hardware product turns standardization into likely the product below intense competition (Commodities) , and software criterion forever won't. And, software is a lever, pass software, HP ability sale gives more usury embellish products, if bit server, data analyses system and IT center,seek advice from a service. "We had calculated Zhang, the software income of 1 yuan of money can bring the gross income of 8 yuan of money, accordingly we now the stratosphere software park TSG, recommend to the client above all, in software the conformity that product level has below this umbrella. " Xie Shaoyi is right " business affairs weekly " the explanation says.



Next, the software business that industry sees income amounts to 16 billion dollar brings IBM " the client binds calm effect " , ceng Ren post is the controller of HP software business at IBM, senior vice-president Huo Gen (Tom Hogan) gets more purposely to this of course: "Software is the hardware that lets us and the key that serve business extraordinary. "Software is the hardware that lets us and the key that serve business extraordinary..



Accordingly, the politic target in Li Fuma Er -- through making full use of software is mixed automation technology, cut technical staff of the client 90% -- in, software is the mainest strong point. HP served as software even in hertz heart speech in December 2006 first of direction of 4 great progress: It is software above all, not be application software, need form a complete set around IT infrastructure place however " run software " ; It is next outside the bag serves; The 3rd it is for the whole world 1000 many big clients undertake throwing; The 4th investmen dvd discovery 4 t that is pair of individual spending markets.



See software business in HP the growing speed in all business is mixed profit margin knowable, afore-mentioned targets are not the job that obtains impossibly.



2009 money year the 2nd quarter, HP software income is 880 million dollar, profit 157 million dollar, till,consider 2006 money year software branch returns loss 49 million dog crates large dogs dollar, 2007 money year gain 85 million dollar, 4 years of growth rate it may be said of a software business are breathtaking. And, the profit income of software compares the tendency that has the hat that contends for HP interior greatly, compare profit margin only highest IPG is low 0.4 percent, amount to 17.8% , and spend in the end 2008 the four seasons before, this one word is as high as 22.8% , profit reached 195 million dollar.



The methodology of HP software business and service business are not had 2 send, also be to buy + integrated. 4 years, the deed that HP buys 12 software company early or late is by what industry says " frenzied scare buying " , include to bought data center to manage software business Mercury with 4.5 billion dollar 2006 among them, with one action makes his software business enlarges one times; Bought Opsware of business of software of data center automation with 1.6 billion dollar 2007. Only a year 2006, HP reachs 7 billion dollar to the investment of software branch, in going 3 years, HP invests 6.5 billion dollar to software. It is reported, had taken a company to the investment of software business annual 70% what research and development of 3.6 billion dollar throws. Explain to this collect guest abdicate: "Same investment, can have on software business bigger yield. Can have on software business bigger yield..



Although HP causes the vigilance of Microsoft, SAP and inscriptions on bones or tortoise shells of the Shang Dynasty in the outspread meeting of software market, these companies also are the partner of HP advisory business, but HP already was a pair of annals on software business in the attitude that must. The explanation of HP is, be opposite from the client the consumptive customarily of software, HP can use radical strategy only, "Our major client has a such habits: When selecting a product, more times can see independent advisory company be like the report of IDC, Gartner, very how old client can choose a rank the first with second company, and the 5th and the sixth after, they won't consider again. " Huo Gen says. HP now is the world company of the 6th old software, software business has stuff of many 10000 full-time.



An issue that is placed before HP software business is, although HP says his software can be used at administrative data center to mix,optimize company flow, the client on the tradition does not think HP is a company that provides sophisticated software product however. "We need to tell a client ceaselessly, HP software is not that HP software of the past any more, that famous Mercury that for instance you know, Opsware, had been of HP. " Xie Shaoyi is right " business affairs weekly " say, "We want already wide and the actual strength of the HP software that announce, want aggrandizement again ' HP ' this unified brand. " at present, combination of HP software and solution includes IT management (BTO) , information management (intelligence of IM) , commerce (BI) and communication and media solution (CMS) 4 big fields, the client that is in China includes insurance of Chinese shift, friendly nation and each big bank.



"In market of automation of domestic movement dimension, our HP software should be a when have successful case exclusively. " Xie Shaoyi says.




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