Goodbye Palm, Compaq, Digital and HP

DEC Alpha based Mini-supercomputer

Image by carrierdetect via Flickr

It’s a sad, sad day for those of us who’ve been around for a while.  HP’s Q3 numbers going forward aren’t impressive and their solution is to axe technology that they’ve acquired over the last decade.  You know, the technology that they got great deals on, and which helped them become the dominant player in a number of markets?

Let’s tally some numbers:

HP Acquired Compaq for $25 Billion Dollars of 2002 money (remember that we’ve lost about 20% of our dollar value in the last decade).

Why?

To gain a prominent position in the latop, consumer and server marketplaces.  Compaq was well established as the leading laptop and portable computer vendor.  Remember that Compaq purchased Digital Equipment Corporation in 1998 for $9.6 Billion Dollars to gain its business server technology, including the impressive Alpha chip set.

HP went on to purchase Palm’s WebOS operating system in April, 2010 for $1.2 Billion so that it could gain an excellent mobile operating system and be able to develop a strong position in the tablet and cell phone space.

That’s $35.8 Billion Dollars worth of mergers and acquisitions to establish the leading laptop, tablet, cell phone, desktop and server company in the world.  All of that wonderful technology, patents and acquired technology leaders on the decline must have put HP is a dominant position in quite a few markets, right?  Big time wrong, especially when you consider the costs and the lack of payoff.

The result?  HP’s “retiring” Palm’s WebOS, its tablet and cell phones, has killed the Alpha processor family, is spinning off its Personal Systems Group (much of what’s left of Compaq) and is hoping to make more money going forward.

If I owned their stock, I’d be wondering where my $35.8 Billion dollars actually went.  Every one of these acquisitions was made when the rest of the market place had well established 800-pound gorillas, and when entering those markets was clearly a bad idea.

Looks like it might be time for a serious series of changes at the venerable Hewlett Packet — and I don’t think its just because I miss their calculators.  They’ve been floundering for more than a decade and these most recent write-offs just won’t be enough for them to re-establish themselves as a leader in any industry sector.

PA-Risc and IA64 server technologies aren’t going to be HP’s savior, and in-fact most of their partners have already abandoned them.  Ouch.

And to add a little more insult to their injury, Lenovo has announced its quarterly profit nearly doubled this past quarter.

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