Should Google Buy HP's PC Business?

So the biggest PC maker is getting ready to dump its PC business. That's the gist of HP kills tablets, confirms PC spin-off plans, in .

HP's first move is discontinuing operations for its (Linux-based) WebOS devices, including phones and tablets. The next is unloading its Personal Systems Group (PSG). In a press release titled HP to Evaluate Strategic Alternatives for Personal Systems Group, the company explains,

HP today announced that its board of directors has authorized the evaluation of strategic alternatives for its Personal Systems Group (PSG), including the exploration of the separation of its PC business into a separate company through a spin-off or other transaction.

PSG has a proud history of innovation and technological leadership as well as a strong operating track record and industry-leading profitability. PSG is the leading manufacturer of personal computers in the world and had annual revenues of approximately $41 billion in fiscal year 2010. PSG enjoys leading global market positions in consumer and commercial PCs.

HP is implementing a plan to fundamentally transform the company. An important component of the plan is focusing its investments, resources and management attention to drive higher value solutions to enterprise, small and midsize business and public sector customers.

So they want to be big and dull. Fine. Go do that.

From the Linux angle, there is much more potential excitement in what they're giving up.

According to the Computerworld piece, HP shipped 14,888,086 PCs in Q2/2011, for a 17.5% share of a worldwide total of 85,219,865 units. (Source: Gartner, July 2011.) But PCs are commodities now. Microsoft's Windows OS, for which new PCs have been designed for a generation, has gone blah. Used to be Microsoft led the clone-makers around by the nose. Now Microsoft is walking Nokia around the barnyard while the clone-makers are losing interest in the whole show.

It would be way cool if Somebody Big stepped up for Linux, and took over the PC bus that's coasting along in the slow lane while Apple rockets by in an aluminum-anodized blur. Who might that be? There's only one possibility: Google.

Hey, they just went vertical in the phone hardware business with Motorola, which everybody's calling Googlerola now. Why not with PCs? Will we call that move gHooPle?

Does anybody want Microsoft to buy HP's PC business instead? That's a possibility this piece in the Seattle PI suggests. Microsoft would do to the Windows-based PC business what Google did to the Android-based smartphone business.

The buzzphrase du jour here is "vertical integration." Apple's success has given a new caché to it. Never mind that Apple is a industrial mutant and an example only of itself.

In fact vertical integration has been around since Industry won the Industrial Revolution. Getting past it is one of the great achievements of both the PC and the Internet (and of Linux with both). The horizontality of both has created a vast foundation for innovation and wealth-building out the wazoo.

Google saw that, aligned with it, and went horizontal big-time with Android. But horizontal (the commodity play) has drawbacks. This afternoon I met with a smartphone developer that makes an identical app for iPhone and Android. He said actual usage of the app on iPhone is 10x that of the same app on Android. (Note that we're talking usage here, not installs. His first point: iPhones still make apps easier to use. His second one: Google buying Motorola is ideal for him, because Googlerola is sure to raise the bar on usability, and create a single development target across all the different Android smartphones.

Another way of looking at the gHooPle prospect: Google can lead PC growth and evolution the way Microsoft did the generation before, and the way Google is doing with smartphones and hand-helds, right now. gHooPle might even leap ahead of Apple, because Apple still has a two-OS problem (iOS and OS X). Can Android be a one-OS for all personal devices? Why not?

At this point we're moving into the realm of pure speculation. (Which is fun. We like that.) But what's not in doubt is that the PC business is dull and languishing, and the biggest player in the business is folding its cards and walking away from the game.

Something is about to go down here. What is it? And what should it be?

Tell us quick, before it happens.

______________________

Doc Searls is Senior Editor of Linux Journal

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Everybody is moving to

gbaker119's picture

Everybody is moving to mobile, in fact software companies now start developing the mobile version first and then then the desktop. HP is looking ahead, they know what they are doing.

Google should not buy HP's PC

Anonymous's picture

Google should not buy HP's PC business because it is full of bug's with no cutting edge technology that would make difference. Google and rest buyers should leave HP's PC business to die naturally.

Google Join PC Family

jonathanlht's picture

Don't know what will be the impact on the pc market. To my understanding, Google is strong in its search engine and advertising programs: Adwords & Adsense...

consultant oriflame

consultant oriflame's picture

Would be cool if HP made webOS open source and let the community further develop it.

I think it is a terrible idea

Dolf Teuscher's picture

Google does not need to waste time supporting a dead operating system, or trying to bring it back to life!

Apple is a PC

jacatone's picture

It's interesting that the regular OEMs like Dell and Asus have razor thin profit margins while Apple has created this aura around their products even though they're selling Intel machines running Unix for really inflated prices. Which explains their having 76 billion in cash. Maybe the other PC makers should adopt aqua and polished gun metal on their machines as well.

Google having great support

FrancisConley's picture

Google having great support in market with its OS. Google should go with Android. It having great requirement in today's market.

bathroom cabinets

Google buy HP PCs

grahamc's picture

Google are currently giving away Chromebook PCs to large educational establishments in order to spread the use of their os.

They obviously don’t care about making a profit from the hardware, so maybe it would make sense for them to buy HP PSG?

They would own their own PCs and acquire a worldwide sales and support organisation with established reseller channel. They could then standardise on their Chrome os and increase its uptake dramatically quicker than via organic growth.

http://grahamsblog4444.blogspot.com/

Google buy HP PCs

grahamc's picture

Google are currently giving away Chromebook PCs to large educational establishments in order to spread the use of their os.

They obviously don’t care about making a profit from the hardware, so maybe it would make sense for them to buy HP PSG?

They would own their own PCs and acquire a worldwide sales and support organisation with established reseller channel. They could then standardise on their Chrome os and increase its uptake dramatically quicker than via organic growth.

http://grahamsblog4444.blogspot.com/

Google -> HP?

David Williams's picture

I think it should rightfully be called Googletpackard

Dave

I believe that oracle will be

Anonymous's picture

snapped up as well. SAP is a ridiculous ERP tool.

Google should buy WebOS and pillage it for Android

Daevid Vincent's picture

I think this is a prime time for Google to acquire WebOS and just make it OSS like Android and let developers start porting the interesting parts into it. It would also be nice to see Android phones that charge via "Touchstone" (or whatever Palm called it). The stuff they do with touching your phone to a tablet is also very very cool.

As for HP PC's ... meh. Yawn. who cares about built PC's anymore. Dell owns that business and they're so cheap to build yourself, let them go the way of Gateway.

If MS bought HP and favored

FredT's picture

If MS bought HP and favored them. Then all the other PC makers may start looking for another OS, Linux

PC prices

zykoda's picture

A bid to increase the profit margin of PCs by reducing the manufacturing/seller base?

Canonical

Anonymous's picture

How would it be if Canonical were able to buy HP's PC division?

Imagine desktops sold with Ubuntu as the primary OS and Windows as a secondary system (just to help slow adaptors).

It would do wonders for the uptake of Linux.

Yes, if they wanted to kill any chance of profit

Spamhater007's picture

This would be the headline: "Cononical purchases HP PC Division, converts to Ubuntu and files Bankruptcy"

Simply put, 95% of the computer users are just ignorant and need things very simple. Why do Apple products sell so well, cuz a 4yr old can make it work.

Sad but true.

cwl's picture

Sad but true.

hp selling off their main

alletto05's picture

hp selling off their main business is sad to hear. hp dates back to my first computer; vectra 500. I am hoping a company like Acer or Toshiba would make the move. It's a ticket to the front of the pack. Apple is like corporate America now; people jump ship cause everyone's doing it. but nobody realizes nothing is free with apple. You have to pay for just about everything and you never truly own it. how many can actually say they own their music after purchase and can we say.... open source? this is why Linux is a true hidden treasure. I think any product running linux based is a way of sticking it to corporate America.

Forget the HP....Its not

Anonymous's picture

Forget the HP....Its not worth all the trouble...Too many mistakes for one company.
http://myblog-lyuba.blogspot.com/

freeness

anonymous's picture

patents are a waste of time and money. you blame people for being freeloaders which really isn't a big problem most people barely kno how to operate computer and those few who do take advantage of it, just like anyone else in different situations. once someone comes up with a new and awsome idea they get it patented only to have some manufacture/ entrupenor who has the money to change the idea enough to call it their own and produce and sell for less. this is a way worse problem then a few people downloading stuff from the internet for a few bucks to a person to capitalize on an idea to make bank off of it. now you tell me how fair that is. we as a society will never get anywhere anymore because of people reaping the benefits of having money to those who will almost never get it. why would anyone in their right mind want to come out with a new idea for someone to steal it, and human life ends from greed. we're essentially killing ourselves awsome!

Sorry to see HP's possibly/probably dumping PC's...

dgreenhouse's picture

I'm a little sorry to see that HP's possibly/probably going to dump its PSG, but I really can't blame them. Their focus on HPC, workstations (I hope), and high-end servers is a better fit - IMHO.

As far as a "gHooPle" play is concerned, I think that would probably be a stupid idea for Google; unless of course they want to build "6'x3' 'ole-skool' wire racks" in their server farms filled with HP PC's that are eating up excessive amperes! :D

I think Google should probably continue focusing on software and mobile and leave the pain of producing commodity hardware to those silly enough to do so! :D

selling off HP

xarmyvet02's picture

If HP was smart they would not sell off its PC division and keep webOS. They could work it such as Red Hat does with Fedora, Canonical does with Ubuntu, or Attachmate aka Microsoft does with openSUSE. By utilizing an open source format they could improve webOS at a lower cost while preventing devaluation of the HP brand. If there was a need to sell off then sell it to Google so the evil Rockstar consortium would not have a foot to stand on its pattent trolling and FUD practices. Just my opinion though.

HP and Linux

Doc Searls's picture

The sad fact is that webOS lost in the mobile marketplace to Android and iOS — and even to Windows Phone. Good or not, it failed to compete, and HP is at least partly to blame for that. They could have jumped into the mobile device game in a serious way, but they decided instead to have a "presence" in a market that needed real aggression

On the PC side, all the hardware makers have been following Microsoft's lead, just as the Android makers have been following Google's. And Microsoft just hasn't done a good enough job of staying ahead of Apple. Remember, you have to see this from the hardware maker's point of view. All of them are Microsoft partners. They make devices that say, right on them, that they were designed for Windows Whatever, and have a Windows key on the keyboard. What little differentiation they had was what Microsoft led or allowed. The failure of the PC hardware marketplace today is therefore to some degree Microsoft's failure. It's also Apple's success. Right now, Apple is a juggernaut. It won't last. (Nothing does.) But HP isn't in a position to make a truly unique PC, that can demand even a fraction of Apple-grade margins. So, even though the volume is huge, they're dropping out.

There are still plenty of boxes to run Linux on, of course. but Linux still needs one hardware maker to smell the opportunity, step forward, and make a truly unique and compelling non-Windows, non-Apple PC -- one that demands to be bought by everyday folks and not just the technical ones. I've been on record, here in LJ, predicting that since the mid-'90s, and it ain't happened. Maybe Google can do it with Chrome or Android and some hardware company. But I don't think that's a motivation for them right now. Not when their revenue per employee is $1 million, and they're used to higher profits than hardware usually brings. But I don't see anybody else, which is why I wrote this piece.

Doc Searls is Senior Editor of Linux Journal

Android of Chrome OS are really free?

sc's picture

Doc it's a long time since I continue to ask myself a question but I have no clear answer: are android and chrome OS just other walled gardens? Perhaps with lower fences but still closed?

As a Linux and free software user and advocate I just have some doubt.

Stefano Canepa aka sc: sc@linux.it http://www.linux.it/~sc
Three great virtues of a programmer: laziness, impatience and hubris.
Le tre grandi virtù di un programmatore: pigrizia, impazienza e
arroganza. (Larry Wall)

Obviously

PXLated's picture

Obviously you don't like Apple - But when a company spends billions of dollars doing R&D, actually makes a product and sells it, they aren't patent trolling, they're just protecting their investment from you evil freeloading freetards. Get used to it, you'd do the same if you'd ever spent money and actually developed anything patentable.

Apple did not invent touch

Kyle's picture

It might come as a surprise to some but Apple did not invent touch. Touch devices have been around since the early 80's and maybe even earlier.

Most monopolies destroy the things they crave, "absolute power etc" and Patents on UI design is crazy and destroys innovations, design should be copyright like any other creative efforts. New engineering that creates new and innovative processes objects and actual software written should be capable of patent protection, but there should be a size limit - once a business is say more that 15% of a market it should be required to open source its designs and "Pay it Forward" (great movie) so that the entire community can get back something for the "total community investment" that allows a company like Apple actually prosper.

Touch and patents

Doc Searls's picture

Apple holds touch patents, plus lots of others. Who invented it first almost doesn't matter. The Big Boys are at patent war now, and the rest of the bazaar is getting shot up in the process.

I agree about patents. For what it's worth, here's what I wrote about the topic for Linux Journal way back in 2000. The problem now is worse. Nobody following patent reform that I know likes what's proposed in Congress right now. Depressing.

Doc Searls is Senior Editor of Linux Journal

Apple did not invent touch

Kyle's picture

It might come as a surprise to some but Apple did not invent touch. Touch devices have been around since the early 80's and maybe even earlier.

Most monopolies destroy the things they crave, "absolute power etc" and Patents on UI design is crazy and destroys innovations, design should be copyright like any other creative efforts. New engineering that creates new and innovative processes objects and actual software written should be capable of patent protection, but there should be a size limit - once a business is say more that 15% of a market it should be required to open source its designs and "Pay it Forward" (great movie) so that the entire community can get back something for the "total community investment" that allows a company like Apple actually prosper.

You tend to forget that

DeadLock's picture

You tend to forget that tablets are not invented by Apple(nor the smartphones). 99% of Apples R&D expenses are for advertisement, 0.5% for UI(which is ridiculus to patent!), and rest is for copy others researchers old stuff and put it in new shiny package.

2 vs Many

PXLated's picture

"Apple still has a two-OS problem (iOS and OS X)"

Even with that, aren't they a lot closer than all the android variants out there, especially with different UI additions?. And then Google has the Chrome problem to boot.

2 vs. Many

Doc Searls's picture

I don't know, but I'm sure it will make a good future LJ article. :-)

Doc Searls is Senior Editor of Linux Journal

Actually, I kind of hope Google DOES buy it.

Brett Glass's picture

Google would see it as a way of doing vertical integration (and it would surely integrate its spying into every single machine shipped, just as it plans to with the cell phones it makes), but the business would be a huge dead weight around Google's neck. Which it deserves. There never was a more unscrupulous monopolist that Google (it's won the title away from Microsoft by using the same tactics -- including horizontal monopoly leverage -- but going much further).

As with Lenovo

Doc Searls's picture

crb3, agree that it's likely to be a Chinese taker for the business. So maybe Hauwei can be HP's Lenovo. It would certainly fill a hole in their large portfolio. And they're good at turning profits on commodity products. That also argues against Google, since Google has been a high-margin company for some time, and Wall Street (not just myopic MBAs, though the overlap is huge) likes that. One big knock on Googlerola is that the margins on hardware are lower than what Google gets with its advertising services. (Never mind that Google's margins on stuff it gives away are negative.)

One difference for a Hauwei is that HP doesn't make a ThinkPad, which remained the most distinctive of the laptop clones after Lenovo bought the PC division from IBM. A Pavilion is not a ThinkPad. That said, Lenovo might buy the division and keep making Pavilions.

But the biggest difference of all is that IBM never announced that it was unloading its PC division. HP just did. That's a signal to the market that they haven't found a buyer.

So consider the possibility that nobody will buy the division from HP. It's a reasonable one, because that is exactly HP's experience so far. With that press release, they just put a big "GOING OUT OF BUSINESS! EVERYTHING MUST GO!" sign on their biggest division, and the biggest seller of PCs on the planet. It's hard to imagine a more desperate message, or one that could devalue the division more.

No wonder its stock was already tanking this morning, even before the market opened. (Down 20%, so far, and dragging all of tech down along with it.)

Carly might have been nuts to make HP buy Compaq, but at least she was bold and optimistic. Apotheker and his board seem determined to make HP into another Unisys.

What might HP be today if Hewlett and Packard were still running the place? Back at the end of their day the line was "Computers and instrumentation for business, medicine, education and science." It was a scattered collection of competencies, but there was a coherence to it, which was "The HP way."

When I got to Silicon Valley in '85, The HP Way still meant something. To work at HP was a privilege and an honor. It also meant you were on a first name basis with Bill and Dave, whether you knew them or not, because HP at heart was a collegial collection of engineers and scientists. Now it's just another big old company, kind of like Microsoft is also becoming.

Bill and Dave must be spinning in their graves. (And Bill Gates must be going nuts too.)

Doc Searls is Senior Editor of Linux Journal

Going out of business sign?

dgreenhouse's picture

@Doc Searls: "... With that press release, they just put a big "GOING OUT OF BUSINESS! EVERYTHING MUST GO!" ..."

Let's hope so, so we can get some pc's on the cheap! :D

@Doc Searls: "What might HP be today if Hewlett and Packard were still running the place?"

One could only hope for those bygone days... Wistful, wistful... Tear, sniff, tear… :) --> :(

webOS

Anonymous's picture

Would be cool if HP made webOS open source and let the community further develop it.

I think at this point that's

crb3's picture

I think at this point that's the only way they're going to be able to realize any value from it: put it out on github and invite the world's inventors in to play, since clearly they have none of their own left. Let others do the finessing they failed to do, and scoop up the work under GPL (and maybe the devs as well the same way Cyanogen recently got hired).

The problem with that is, they're still thinking about making it the common dashboard for their printers, but they've got trade secrets to protect in those printers, secrets such as how to get around the security chips in those expensive ink cartridges (they can shut down a few hackers and refillers under DMCA but if everybody's doing that it's unenforceable). Protecting that defacto monopoly on ink, IMO their only remaining real revenue source for awhile, is incompatible with a fully open platform.

Googlerola?

Anonymous's picture

.. Motoroogle sounds much better.. :)

The parent company always

thegripmaster's picture

The parent company always comes first.

Old/New

chas's picture

Completely makes sense that Google bought Motorola Mobile as it really shows how we are now transitioning from "desktop" to "mobile" computing. Apple has started to move 10.7 into the iOS realm and is exiting the enterprise hardware market. I can't imagine anyone buying the desktop/laptop segment, unless they're already in that biz, like Lenovo or Dell (and they'll get a GOOD deal). WebOS may have been cool, but without hardware or developers, it would have been a distant third or fourth to iOS and Android. May it RIP.

"Transitioning" is the wrong word...

GaryM's picture

While mobile computing seems to be all the rage these days I think it is premature to say that a "transition" is taking place. "Transition" implies leaving one for the other. And I do not think that this is the case.

Many are finding increased productivity by using mobile devices along with their desktop at home. But to say that mobile devices are going to supplant the desktop and render them historical novelties misses the mark.

Until someone can duplicate the desktop metaphor with nice screen size and easy-to-use input devices, I think we will see the desktop hang around well into the future as one of many devices used in our daily computing activities.

gHooPle

Doc Searls's picture

Good point, Vinob. At least Chrome and Android are both Linux-based.

Doc Searls is Senior Editor of Linux Journal

Yes i agreed, but if we move

Vinob's picture

Yes i agreed, but if we move into deep the concepts are different for chrome OS and Android, i think chrome they intended it as a cloud client, without cloud its useless (if google can do something in that area i am sure that will be another success like android) but in the case of android it can perform without cloud.. and indeed its a great piece of work from Google.

selling off hp

Anonymous's picture

well won't that be nice! Any body man enough to admit that finding a printer that works in linux are few and far between for the average user. so we all turn to hp printers. that error will also end. do not kid your self's there will come a time when searching for old hp printers on ebay will be all dried up.

Brother

Anonymous's picture

Really? No readily Linux-compatible printers??? My Brother MFC490CW works quite nicely, thank you. Brother even has an entire site dedicated to drivers & utilities for Linux, to utilize all the functionality of their hardware (http://welcome.solutions.brother.com/bsc/public_s/id/linux/en/index.html).

Granted, they *should* be supplying at least some release of the drivers on the install CD every printer ships with these days, to avoid even the step of having to download them. You could DL newer versions, the same way you'd grab newer versions for Windows and probably Mac OS-X.

Few and far between?

Anonymous's picture

Epson printers work pretty much plug and play these days. Most of the later Canon ones do too, from what I understand. And this doesn't get into the color and black and white laser printers- which most of them work as well.

HP PSG and Microsoft? etc

crb3's picture

Nahhh, Microsoft would do to PSG what it did to Danger/Sidekick/Kin: finish the job Carly began of destroying it. Microsoft suddenly competing with its partners is as ingrained nature to MS as its being incompetent at it due to internal faction-fumbling; this time it'd devalue its cash cows Windows and Office by tying them to a sinking hardware brand. No panic for Linux there, in fact there'd be a lot more "beige boxes" left at the roadside in the wreckage, ready to reformat and install something useful.

Whyever should Google want to make such a purchase? They just invested in Mote; that'll take awhile to digest and turn to account. Making another big buy of an existing operation just-because isn't creating value, it's brokering value, something Google has historically avoided in favor of doing something productive and new. If we're all pointing and laughing at HP and the $12bi cost-of-opportunity it's just paid out to become a mere broker, why should we cheer Google into doing likewise, immobilizing its agile self with such a cash burden just when there're patent wars to be fought and won?

Having Oracle buy HP PSG would devalue the HP brand for all but enterprise (and the enterprise PC market is doing *so* well just now); they've already got more hardware than they can handle with SPARC... Another disposal for a once-productive system.

I think HP PSG will do better spun off into its own entity, freeing it of a near-decade of Stupid Narcissistic Management and their momentum towards yet more stupidity. If anybody buys them it's likely to be Huawei, because they're big enough and China hasn't forgotten how to turn a profit in a low-margin market (i.e. Lenovo), unlike the lethally myopic American MBAs.

And now HP, the corporation, will fade into irrelevance like Borland did; from now on the only HP worth reading about is written by JKR.

Don't forget the sauce!

Janne's picture

Don't forget the sauce!

HP and Oracle

Anonymous's picture

I believe Oracle will buy HP PSG and Mark Hurd can happily watch Leo drive HP into vaporware (cloud).

Have you heard this CEO speak, no doubt SAP was happy to zap him.

gHooPle

Vinob's picture

Google also having multiple OS Chrome and Android, so its again a confusing matter for Google to stick with which OS.

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