HP CEO Says Intel and Microsoft Turning Into Competitors

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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  • g-unit1111
    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.
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  • threehosts
    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.
  • g-unit1111
    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.
  • monsta
    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.