OpsanBlog

HP: PCs and Tablets, Services, Autonomy and the IBM Playbook

Just last week, HP announced their departure from the consumer PC and tablet business. Note that HP is the biggest-selling PC maker in the world, outselling second-place Dell by about 40% (based on 84 million units sold during the second quarter of 2011, per research firm Gartner).

Why would HP just want to abandon their #1 place in this business, you might ask?

Economics. Big numbers don’t equate to big profits .. the phrase “.. yes, but we’ll make up in volume” is SO 2001 .. where it didn’t make sense when applied to early dot-COM company sales strategies. Suffice to say: the numbers speak volumes .. but of a different sort.

Hardware margins are tiny. Ever since IBM started producing PCs based on commodity hardware components, PC makers are increasing speed, power and value .. all while decreasing prices and profit margins.

IBM abandoned the PC market in the dark ages of 1994, turning instead to services and value-added business strategies. This gets their business model further away from the metal, and into higher-margin territory.

HP took a page from the IBM playbook by ceding this market to Dell, Lenovo, Apple, Acer and a number of smaller PC makers .. and by purchasing the largest software vendor in the UK, Autonomy, rather than building their own.

On Autonomy. They specialize (among other things) in “Meaning Based Computing”, sort of a fancy term for contextual-keyword results, based on the actual meaning of the keyword (hint: autonomy can also mean “stand-alone”, which would certainly skew results). I’m keen on this: discovering the intended meaning of a word and coupling this with user intent will yield significantly better search results. I discussed an early version of this paradigm back in 2005 (this was during the MSN / pre-Bing and Google search wars) in: “Search: MSN and Google, et. al”.

On services? Autonomy has a worldwide services business, with lots and lots of kudos from customers. I won’t dig into that here, but I do see similarities from the IBM playbook  .. except with the addition of a pragmatic ‘buy versus build’ approach.

In the news:

• Paul Thurrott: “By Exiting, Slow-Moving HP Will Help Reshape the PC Market”
• The Economist: “Seismic Shift in Silicon Valley”
• BBC: ”Hewlett-Packard agrees deal to buy Autonomy for £7.1bn”

Your Brand in Triple-X (and I don’t mean “times three”)

Back in 2005, I posted “Delay for the .XXX Domain?” .. and then I promptly forgot about it. My primary concern at the time was better filtering for routers and the Web at large .. perhaps even giving us back some ‘expected-to-be-safe’ domain names like WhiteHouse.com and Craigslist.com (don’t navigate to either of those).

In reality, there is an important branding question at hand .. with proposed changes to Top-Level Domains (.TLDs .. the .com, .net, .org, etc.), and despite assurances from ICANN (the organization that manages TLDs), it’s possible that your brand could be hijacked. Microsoft.xxx, or Google.xxx perhaps?

Not likely, of course. Powerhouse names are going to be immediately recognized .. likely, for a price. Case in point: do you recall the kerfuffle over superbowl.com? I do (but cannot find a reference; if you have one, please forward to me). Seems a fan registered the domain name and the NFL sued to get it back. I wonder what would have happened if they had just asked nicely.

Reasonable? Actually, it is. There are a lot of cases of this; pages and pages and pages of them, in fact (any of those are an interesting read), where names and variations are purchased and turned to unintended purposes.

Others aren’t so nice, and deserve some legal action .. cybersquatting is the act where someone buys a domain name and then negotiates with another to arrange a purchase. I get the ‘buy low, sell high’, and in the case of non-brand names, I see a business model .. BUT, let’s be reasonable kids .. you can presume that the deeper the pockets of the buyer, the longer the squatter is going to try to hold out, and we’re off to the courts.

Another viewpoint: in the .xxx case .. do you really want your brand registered on the web with a .xxx TLD? Probably not. Tongue-in-cheek intended here, but we have a local business called Tacoma Screw. Can you imagine the possibilities? I’m willing to bet the squatters can.

Anyhow .. I don’t think this is over yet. AdAge posts some help: “Video: How to Keep Your Brand Off of .XXX”. If you have a brand that’s worth protecting, it’s worth a watch.

PayPal as Service, versus Method

I put this in my Leap Frogs Category as it’s new to me (although it may not be to you).

Way back when, a few folks (including me) thought that the PayPal infrastructure could be elevated to be used as a payment method .. just like Visa, Mastercard, Discover, etc. In fact, there was a significant evangelism effort going on at the time, providing the necessary HTML code to include the PayPal image, secure interaction with nascent web services and the like.

From the image above, you’ll see that PayPal has up-leveled their game to provide a complete payment service, not only for their own payment method, but as agent to the other services who are ready to collect funds across the web. I’d be curious (and will poke about) to see if this was primarily a defensive move (to ensure they’d be a payment method), or a well-conceived (and decently executed) new business for the company.

Either way, nicely done.