The CMB Technology Pulse Blog

HP's Acquisition Of Palm Isn't About Depth But Breadth

Posted by Don Ryan on Wed, May 05, 2010 @ 10:28 AM

Not only does HP continue to acquire companies whose time is running out, but they are also extending their product lines to offer their customers more. 3Com may not have been the first networking company one would choose to acquire, but it did fill in gaps from HP's Procurve business. Similarly, Palm complements HP's iPaq phone line (new OS, touch screen technology, etc). What HP is showing is that an acquisition does not have to be the best, but rather it needs to provide more scope within a growing market and new technology platforms from which they can build new products.

In fact, the HP acquisition may not be as much about the smartphone business as it is about other mobile devices like netbooks and tablets.  There's no question about the importance of developing Web OS applications for all mobile devices. (See WSJ article for acquisition analysis). 

In a recent Bloomberg News interview with Michael Cuggino, portfolio manager for The Permanent Portfolio based in San Francisco, he talks about the Palm acquisition being about much more than the smartphone business and thinks maybe HP can "unlock the real value of the Web OS and fill a hole in their product line." Cuggino also talks about the importance becoming an integrated entity and the breadth of product lines...

In the mobile device space it is becoming table stakes to have a full product line that spans device types, user interfaces and operating systems. The importance of having a robust product line is consistent with technology research CMB recently conducted on consumer electronic device preference and usage. One of the things we asked among a group of approximately 700 US consumers was which device would you replace your current device with when you make a new purchase.

What we found is that there is a fair amount of substitution especially between netbooks and notebooks and tablets and netbooks. Not surprisingly, most smartphone users would likely replace their existing smartphones with a new smartphone, but we did see that 15% will say they will replace their smartphone with either a tablet or netbook.

These shifts underscore the importance of a vendor having a full line of products to maintain overall device market share as consumers switch from one device to another. What HP has recognized is that it is not as critical what the brand is that they acquired, but rather having a new brand in the first place that offers consumers a viable choice when they do decide to switch.

I will presenting more of these findings at the Netbook Summit taking place May 24th- 25th in San Francisco. We hope to see you there!

Posted by Don Ryan. Don is the managing director of CMB's technology practice. Don is an avid tennis player and enjoys reading political commentary and spy novels.

Tags: Tech Pulse, mobile research, chadwick martin bailey, market research, Don Ryan, Google, HP, netbooks, smartphones, Palm

A bridge too far or an opportunity so near?

Posted by Don Ryan on Tue, Apr 06, 2010 @ 11:55 AM

HP's quest to be a service kingpin...

While attending the HP Industry Analyst Conference for the Enterprise Business Division in mid March in Boston - the point that struck me was the emphasis on the new businesses that HP sees as its next growth engines: service delivery and networking solutions. These two areas were stressed throughout all the sessions at the conference. Indeed, the focus on services is well placed as HP's service portfolio has more than doubled in the last 2 years to encompass over 30% of gross revenue mainly through the addition of EDS's business. 

HP's server and storage solutions while well represented took dual billing with the newer areas. The EDS teams presented in-depth case studies and shared their expertise in focused solution areas in telecom, financial services and manufacturing industries. These sessions really highlighted their ability to do large and complex IT infrastructure outsourcing projects.

However, while HP's service revenue is growing, not all service business should be equally valued by HP given its business model at the present time. HP's overall business model and go-to-market strategy is one that is based on scale and standardization.  This works well in the server, storage, PC and arguably the networking businesses. Where this doesn't play fully today is with HP's EDS services business which is typically highly customized and specialized to specific client environments and applications.

While some of EDS's  IT and outsourcing methodologies and practices can be leveraged across different customer environments, many of these cannot be easily reused today for other customers even within the same industry segment. Standardizing ITO and more commodity type BPO is a must have for HP at this point. Determining and taking advantage of delivery leverage points and processes is, in my belief, the number one challenge facing HP today as it migrates to a services based delivery company in the enterprise market.  If HP can successfully apply these core business principles of standardization and scale to its service business as it has done to its hardware and solutions business, then a truly successful and profitable service business model is on the near term horizon.  If on the other hand, the EDS business continues to exist as a set of one-off albeit large scale engagements, (lift and shift, your mess for less) then a successful services business model for HP built on standardization and scale will remain a bridge too far to cross.

Learn more about IT Service Delivery by downloading the full CMB Tech Pulse report: IT Services

Posted by Don Ryan. Don is the managing director of CMB's technology practice. Don is an avid tennis player and enjoys reading political commentary and spy novels. Don was assisted on this blog by Stan Lepeak, Managing Director of Equaterra ( a major outsourcing consultancy.


Tags: technology research, Tech Pulse, CMB, research, market research, Don Ryan, Brand alignment, IT solutions, HP, branding

Market Research Shows Netbooks Are Starting To Penetrate The Enterprise IT Market

Posted by Don Ryan on Tue, Mar 16, 2010 @ 08:47 AM

When I Google the term "netbooks" I get close to 16 million results. 16 million results for a new market entry!

The netbook market is growing rapidly for consumers, but we are also seeing growth in the enterprise. Similar to how smartphones slowly infiltrated the enterprise market, growth is slow but steady as the consumerization of IT continues.

In our CMB Tech Pulse Netbooks in the Enterprise we asked over 150 IT decision makers about their interest in netbooks, deployment strategies, as well as current and future use.

The findings from our netbook research shows a lot of interest with close to 40% considering deployment of netbooks in their organization and 20% already using netbooks in some capacity.

  • 20% are already using netbooks in the company for a handful of selected people
  • 38% have not deployed them yet, but are considering it
  • 29% do not currently have any netbooks deployed and have no plans to do so
  • 13% do not have any deployed, but have it in their budget to do so

Not surprisingly, we also see a trend that has heavier deployments in those organizations with a highly mobile workforce and in those companies that are using cloud computing applications.

Learn more by downloading our report or seeing us at the Netbook Summit taking place May 24th- 25th in San Francisco. We will be presenting our research and sharing our insight with many other thought leaders.

Posted by Don Ryan. Don is the managing director of CMB's technology practice.

Tags: technology research, Tech Pulse, CMB, research, mobile research, chadwick martin bailey, dell, Don Ryan, Google, IT solutions, HP, netbooks, netbook research

Smarter Planet, Even Smarter Brand Alignment

Posted by Don Ryan on Thu, Mar 11, 2010 @ 10:05 AM

On a recent trip to the west coast, I made the grand tour between Seattle, San Francisco and LA. The schedule was hectic, the meetings diverse and I got to stay an extra day in LA because I was denied boarding on an oversold flight. (Always remember to have a seat assignment for the last flight of the day). But my free day in LA gave me time to think about the common threads I heard.

There is a general awareness that both brand messages and solutions architecturesSmarter Planet need updating. The business climate is substantially different now and infrastructure vendors like IBM, Microsoft and HP are quickly coming to the realization that the old messages and positioning just will not work in this environment.  The recent emphasis IBM has been placing on their Smarter Planet brand with everything from their EPCOT exhibit at Disney to the educational videos of Mad Scientist John Cohn all show how IBM is tackling some of the world's most challenging problems from the global water shortage to the energy crisis. IBM is branding themselves as part of the solution to fix the infrastructure for a better tomorrow. They are a great example of aligning their brand for the business issues of today and the infrastructure of tomorrow on a global scale.

HP is another very good example with their Converged Infrastructure brand, demonstrating they build the infrastructure for today to be ready for tomorrow. Efforts from both of these companies truly underscores the importance of this change. I expect we will continue to see this new brand alignment have a significant impact on web site design, online advertising and go-to-market strategies, as well as these vendors making significant incremental investments in all three of these areas throughout 2010.

Watch our "Inside Out Branding" webinar from Rich Schreuer, SVP of Chadwick Martin Bailey.  Rich gives an encore presentation from IIR's The Market Research Event about "Inside Out Branding" and what you can do to "Avoid the Brand Death Spiral."

Tags: technology research, Tech Pulse, CMB, Don Ryan, Microsoft, Brand alignment, IT solutions, HP, branding, IBM