I don't care what Meg Whitman has to say about Hewlett-Packard HPQ . The only thing that would move the needle for this dog would be to say that it will merge with Dell DELL to take out the capacity overage.
That would at least start to rationalize an industry that has way too much competition, and it would also allow the combined company to focus on more value-added businesses, such as consulting and enterprise tech needs.
Of course, though, Hewlett-Packard won't merge with Dell. The personalities are too different. This isn't like when a leaderless Compaq merged with Hewlett-Packard 11 years ago. Michael Dell is not going to surrender his baby to Hewlett-Packard, and the keepers of the H-P tradition would never agree to such a give-up.
Some would say that you would be just putting two drunken sailors together. Far better would be to do what IBM IBM did with its personal computer division: Get rid of it. That was the beginning of the great ascendance of IBM, as it recognized that when you assemble Intel INTC chips with Microsoft MSFT software, you aren't doing anything value-added.
Hewlett-Packard and Dell remind me of Data General and Digital Equipment, two value traps that people kept betting on right into the ground. Data General shareholders got saved by EMC EMC , but there was no saving of Digital Equipment investors.
I think of Hewlett-Packard as Apple AAPL carrion. Apple took aim at the open system that Microsoft propagated, opting for a closed system that could be controlled by one man, Steve Jobs. One look at the market capitalizations now, though, shows the wisdom of Jobs' position, as Apple is now worth about two and a half times what Microsoft is worth.
More important, though, the customers of Microsoft ended up in a business that reminds me of uncoated free-sheet paper, the archetypal commodity where there can virtually be no valued added. Yes, the customers are the true losers of the Gates experiment.
Of course, Hewlett-Packard isn't just personal computers. It's also printers and consulting. While I use its printers, I, like so many others, hate them, because each machine seems to have a different cartridge type. As far as consulting goes? Take a look at how well SAP SAP , IBM and Accenture ACN are doing. Hewlett-Packard is a distinct also-ran compared with those players, and I believe it is being left behind, not catching up.
Of course, Hewlett-Packard is a huge company that has quite a hold on the big corporation budgets. But without a credible tablet and without a cell-phone, Hewlett-Packard will eventually be ripped out of the enterprise. Products that younger people hate cannot win forever.
So, good luck to the new team. But you've been given one terrible hand, and I just don't see a way to improve it in time to win for shareholders.
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