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HP CEO Says Intel and Microsoft Turning Into Competitors

By - Source: AllThingsD | B 24 comments

HP CEO Meg Whitman states what has become obvious since the launch of the first Surface tablets.

While talking with Wall Street investors and analysts on Wednesday, Hewlett-Packard CEO Meg Whitman blamed some of the company's growth problems on Intel and Microsoft, pointing out that both companies used to be long-time partners, but are now becoming direct competitors instead.

"HP's traditional highly profitable markets face significant disruption. Wintel devices are being challenged by ARM-based devices," she said. "The disruptive forces are very tough and very real, and they are accelerating. We are seeing profound changes in the competitive landscape. Our competitors are expanding across the IT stack. Current partners like Intel and Microsoft are turning from partners to outright competitors."

At least on Microsoft's part, the move to become more of a competitor than a software supplier couldn't have been more clearer than with the release of the first Surface tablets. Last year the Redmond company entered a hardware space previously grazed by Apple, Samsung, Dell and HP, and now Microsoft is doing it again with the second generation models. Microsoft will likely take an even bigger stab at the smartphone market with the upcoming acquisition of Nokia's devices and services division.

HP seemingly began distancing itself from Microsoft back in May when the company's earnings included a 20 percent dip in revenues for the PC business. Like many other OEMs, HP has discovered that it can no longer rely solely on Microsoft, and instead is quickly turning to Android, Chrome OS and Ubuntu for alternative, cheaper operating system solutions. This is a 180 degree turn from the "we have to stick with this, I am a believer" stance Whitman took regarding Windows 8 back in January 2012.

HP took another blow in the PC department in August, reporting an 11 percent drop. The company also had to admit that total revenues would not start growing in fiscal 2014 as promised. Yet HP has pushed on with its alternative OS plan, and just recently introduced the $279 Chromebook 11 that's currently on sale on Google Play. HP actually worked with Google to develop the device, seemingly flicking its nose up a once-best-buddy Microsoft.

"I am still not pleased that we missed too many opportunities," she admitted. "We are doing a much better job of connecting to our customers and listening to what they need. I don't think we have always done a good job on this. We have to up our game substantially. We have been too insular for too long. This has cost us with our customers, and it has cost us with our partners."

As for Intel, HP competes with the CPU giant in a number of enterprise-based businesses such as computer security and cloud computing. HP competes with Microsoft in the Enterprise systems and services realm as well, and is facing an even bigger threat now that Microsoft's rollout will begin later this month.

AllThingsD has a live blog of Wednesday's speech in San Jose, which can be read here.

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Top Comments
  • 13 Hide
    g-unit1111 , October 12, 2013 4:17 PM
    I can't feel too sorry for HP in this. They had a truly excellent product with Web OS but they did nothing to further its' development or even market it to the right people. Web OS could have truly been a serious competitor to iOS and Android - it had everything going for it, included Flash support, and would have been a hit with IT people. All they did was throw it away.
Other Comments
  • 5 Hide
    threehosts , October 12, 2013 4:09 PM
    It makes sense. Then Microsoft will be more and more like Apple and an open-source operating system such as Linux will have the same role that Windows has today.
  • 13 Hide
    g-unit1111 , October 12, 2013 4:17 PM
    I can't feel too sorry for HP in this. They had a truly excellent product with Web OS but they did nothing to further its' development or even market it to the right people. Web OS could have truly been a serious competitor to iOS and Android - it had everything going for it, included Flash support, and would have been a hit with IT people. All they did was throw it away.
  • Display all 24 comments.
  • 2 Hide
    monsta , October 12, 2013 5:03 PM
    I agree with G Unit , WebOS had a lot going for it , HP did not have any faith in its own product and did not want to take a risk, they surrendered too quickly when WebOS had a lot of potential to be a competitor.
    Now HP is left with having to go Android, which is not a bad thing, but they had their own and they screwed it up.
  • 6 Hide
    iam2thecrowe , October 12, 2013 5:31 PM
    HP are the ball sack of the computer industry anyway, I have never liked their overpriced, under-performing products.
  • 4 Hide
    KenTX , October 12, 2013 5:38 PM
    It's a grand irony really. If Microsoft would just stick with x86, kill retarded 'RT' and keep software development open like it is on the desktop, they could, with the help of Intel and low power x86...crush the competition using their not so dead 'legacy desktop' demographic. Imagine if you will.... an open Microsoft Windows across all x86 devices...I'd be all over it. Instead? Microsoft wants to be just like Apple who with the help of 'mind share' has been able to shoe horn a sizable demographic into their little walled control freak garden where they can abuse the liberties of consumers and software developers alike. (I.e.. now charging developers 30% for in app purchases). Microsoft -may- be able to do this as well but I don't think they will like the margins and what they will be giving up. Personally, I would like ARM to just die a quick a painful death and if MS doesn't change the direction they are going, I'll probably be sharing that sentiment towards them as well.
  • 2 Hide
    jalek , October 12, 2013 6:13 PM
    As many times as HP used to be on top of consumer demand, they've missed the entire tablet run. Funny, because when they killed the project and liquidated them, they were in huge demand.

    The boardroom shenanigans at HP had them distracted apparently, the company's seemed to just languish since the Compaq deal and Carly shutting down so many domestic design labs.
  • 0 Hide
    monsta , October 12, 2013 6:34 PM
    It is funny how they kill it off and liquidated them , they were in huge demand, hitting the panic button was their demise.
  • 2 Hide
    g-unit1111 , October 12, 2013 9:51 PM
    Quote:
    I agree with G Unit , WebOS had a lot going for it , HP did not have any faith in its own product and did not want to take a risk, they surrendered too quickly when WebOS had a lot of potential to be a competitor.
    Now HP is left with having to go Android, which is not a bad thing, but they had their own and they screwed it up.


    Oh I know, I bought a Web OS tablet when HP had their fire sale. I've used it a lot in comparison to my iPad. I really like the multitasking features of Web OS where it could run tons of applications side by side compared to what iOS and Android could run side by side. It just sickens me - HP bought Palm, had a great product with Web OS, and then did absolutely nothing with it. Palm should have refused HP's offer and then gone and developed Web OS on its' own.
  • 1 Hide
    southernshark , October 12, 2013 11:35 PM
    ok back on topic. I don't think MS wanted to compete with Intel. I think it has become exasperated..... How long has Intel been promising a viable mobile chip? Many years. Yet it still doesn't even have a roadmap for when a really competitive chip with decent graphics might become available. I know many will wail about the atom and how it has been put into a handful of tablets... but come on... let's be realistic here.
  • 0 Hide
    sonofliberty08 , October 13, 2013 1:15 AM
    Quote:
    HP are the ball sack of the computer industry anyway, I have never liked their overpriced, under-performing products.


    i'll get Lenovo or ASUS instead of HP and their Compaq
  • -1 Hide
    amk-aka-Phantom , October 13, 2013 4:24 AM
    Oh, HP, never willing to admit the truth. You know what's a REAL problem? You, HP. That's right. Every time someone asks me to recommend a laptop, my first sentence is "Do not buy HP". Their products are cheap underperforming poorly built ugly garbage. The ONLY two decent products is their printers and an HP Folio 13'' ultrabook (but even THAT they messed up by putting a lame "clickpad" that annoys me so on MacBooks!). All other HP laptops I worked with are disgusting. Don't blame Intel or MS for your failure. The latter screwed up a lot but it has nothing to do with you. HP used to be insanely popular back in PDA days, they had best value for money and quality, my HP PDA *still* works, even after not using it for years. Where is that innovation now? Do we see unique, outstanding in ANY way products from HP? No we don't. And that's why the company deserves and will die, at least in that sector of the market.

    Personally, I don't think WebOS would make such a difference. It might have been good, but too many people were already caught up with Apple - it took years of aggressive marketing by Samsung and Google to conquer the market for Android. A third competing OS... we all know what kind of market share it would have, just look at Windows mobile. No, despicable build quality and lack of interesting products in already-existing parts of the market is what failed HP and they're NOT learning a lesson from it, instead whining about how it's all MS and Intel fault.

    Southernshark - Intel has delivered many viable mobile chips lately, namely their ULV Haswell i5s and i7s. They might not go into phones and tablets yet but they go into convertibles with very decent battery life and great performance for such a puny device. As for decent graphics, even now they already have HD 5200 aka Iris Pro - it makes all lower-end discrete GPUs obsolete since it can compete with GT620 (so forget all low-end AMD garbage and so on). For most consumers, that's more than good enough. Don't expect that integrated graphics will somehow magically catch up with discrete, that's not happening.
  • 0 Hide
    back_by_demand , October 13, 2013 6:45 AM
    All due respect to Meg Whitman, but she is wrong. Microsoft have put non-Intel chips in their devices since the very first devices they ever made. Xbox, Xbox 360, Zune, WP7, WP8, Surface RT, Xbox One. The only device Microsoft has ever put an Intel chip into is the Surface Pro and Surface Pro 2.
  • 1 Hide
    back_by_demand , October 13, 2013 6:49 AM
    So to claim that their relationship is eroding is laughable and more testament to how bad HP is doing.
  • 0 Hide
    rantoc , October 13, 2013 8:28 AM
    Hardly surprising that the once partners see MS as a competitor with the surface, perhaps its time to sell the MS shares as the company is moving towards becoming isolated - For a product like Surface i highly doubt its worth seeing the former partners stop pushing the MS main product...
  • 1 Hide
    g-unit1111 , October 13, 2013 5:39 PM
    Quote:
    All due respect to Meg Whitman, but she is wrong. Microsoft have put non-Intel chips in their devices since the very first devices they ever made. Xbox, Xbox 360, Zune, WP7, WP8, Surface RT, Xbox One. The only device Microsoft has ever put an Intel chip into is the Surface Pro and Surface Pro 2.


    The standard Surface and Surface 2 tablets use the ARM CPU which is part of the Tegra 3 platform. The Surface Pro does use a Core i5.
  • 0 Hide
    Ryan Klug , October 13, 2013 5:52 PM
    HP CEO Meg Whitman sounds like a loser: blaming partners for lack of sucess.
  • 0 Hide
    antilycus , October 13, 2013 6:16 PM
    If HP Would Stop All Their Spyware InEvery Driver They Make It Would Help A Lot. TIhe Problem IA That HP Picked Profit Margins Over Quality Products. I'veNever Had A Single Proliant Server NOT Lose Hundred Of ThousandA Of Dollars Worth If Data Because All HP Does Is Ship InteL Motherboards with Crappy Seagate Hard Drives On Intel Chipsets. HP Quality And Customer Care Is Horrid. They Sell Our Info And Clog Our New Computers
  • 0 Hide
    back_by_demand , October 14, 2013 4:32 AM
    G-Unit1111, I believe I mentioned RT already as not having an Intel CPU, which covers the Surface 2 as well - I think the point I was trying to make is the relationship between Intel and Microsoft is mainly projected by OEMs that match those chips with that software - HP are such an OEM and their decision to opt for Chromebook development and erode the link between Microsoft and Intel is not due to either of those parties and wholly down to HP. But it's nice of her to draw attention to how her company has stabbed Microsoft in the back when they have made huge sums off the back of having Windows on their machine, then been a Judas in foisting Chromebooks which have sold only a fifth as many as Surface RT in double the time. Way to go Meg, I would rate this business decision all the way up there with tanking WebOS or destroying Palm.
  • 0 Hide
    hector2 , October 14, 2013 7:27 AM
    How is Intel competing with HP ? I don't see it. MS, sure. They came out with Surface RT & Surface Pro
  • 0 Hide
    Avus , October 14, 2013 7:53 AM
    This is about a [removed] computer hardware manufacturer complaint about competition...

    Watch the language. - G
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