HP Inc: ‘The Future Is Whatever You Make It’

Rob Enderle

Yesterday, HP Inc. released financial results toward the high end of guidance. That doesn’t seem like much, but the industry perception was that Meg Whitman had basically thrown Dion Weisler, HP Inc’s CEO, under the bus with what was a no-win scenario of massive debt, declining revenues and dying markets. But apparently, no one told Weisler, because HP Inc. is actually doing surprisingly well. He is even fighting the unstoppable trend of declining printing impressively well (and has a good chance of reversing it).

I think we should pick up on a lesson here and see a common mistake that large tech firms almost always make. HP Inc. is smartly ignoring and avoiding it. Here’s an example. Steve Jobs took over Apple, which was in terrible shape and, in the face of folks declaring that company dead, in about a decade, gave everyone a raspberry as he turned Apple into the most valuable company in the world. We should maintain a better list of CEOs who do the impossible as a matter of course, but I’d like to focus particularly on the mistake of accepting a death sentence.

The “He’s Dead, Jim” Mistake

In the old Star Trek series, Dr. Leonard McCoy would almost always have a scene in which he declared a throw-away character dead. Fans know that these were generally folks wearing red shirts. Someone even wrote a fun book about these poor plot elements.

In tech, we often declare things dead prematurely, and we often make the statement less an accurate pronouncement than a self-fulfilling prophecy. The first time I saw this was when Sun Microsystems effectively declared the IBM mainframe dead. IBM believed it and pulled resources. Decades later, Sun Microsystems is dead and IBM still sells a ton of IBM mainframes, even though it nearly starved the technology to death for decades.

Fax machines were effectively dead in the 1990s, taken out by email, but damned if they aren’t still in use decades later, even though they haven’t been resourced. Even in medicine, we have instances where people are given a diagnosis that they will die in months, fight it, and end up living for years. Others, who give up, pretty much die on time.

Right now, the market has declared PCs and printers dead, but old habits die hard. We are still printing, albeit less (though I’m noticing some physical magazines are reporting increased circulation), and every major PC manufacturer is reporting growth. Some, like HP Inc., are in double digits.

You see, there are two paths from a death pronouncement. You can choose to accept it and plan for the demise, or you can choose to fight it and have a chance of survival. Fax machines could have evolved into high-speed scanners feeding email and digital storage systems automatically (some kind of did, but largely through different firms), for instance.

So reality suggests that I should use the old Monty Python “I’m not dead yet” example, where the poor old guy doesn’t want to die, requiring someone else to actually whack him on the head. If the industry, instead of agreeing that tech was dead, focused on getting rid of the folks doing the whacking, I think it would be far healthier.


HP Inc. and Success

In HP Inc’s latest financial results, we see some pretty amazing things from a firm that is supposedly selling dying technology. Overall, it beat the market on the top line, showing good growth. On PCs, growth in consumer at a whopping 15 percent and corporate on a more modest 7 percent but, at this rate, PC sales will continue until the sun burns out. Debt remains a problem, but it is slowly paying it down (it isn’t growing), and printing wasn’t that bad. Yes, it declined 3 percent, suggesting that printing will surely be dead in around 30 years, but it actually sold more printers to companies and individuals this last quarter, which is what is keeping the supplies revenues from falling more quickly. You see, it is fighting the decline trend, not making the mistake of embracing it. If it can just get 3D printers into market in sufficient quantity, it could even pivot. And removing the printer drag would result in huge gains to both bottom line and debt reduction improvements.

Wrapping Up: Rejecting Premature Tech Pronouncements

I’m still fascinated by the fact that the “PC is dead” thing started with the success of the iPad and that tablets are now dying off relatively quickly while PCs seem to be resurging. The “PC is dead” mindset is still pretty deeply imbedded into key players like Intel (which is why AMD is suddenly making a comeback).

We don’t live in a Star Trek world where one person can call an industry dead and make it happen unless the vendors agree. HP Inc. is a great example of a firm rejecting that pronouncement and showcasing that if you have the proper focus, good people, and a vision for the future, you can make a better future for your firm. I’m going to end with one final media quote, one we should all remember: “Your future is whatever you make it,” from Back to the Future.

 

Rob Enderle is President and Principal Analyst of the Enderle Group, a forward-looking emerging technology advisory firm.  With over 30 years’ experience in emerging technologies, he has provided regional and global companies with guidance in how to better target customer needs; create new business opportunities; anticipate technology changes; select vendors and products; and present their products in the best possible light. Rob covers the technology industry broadly. Before founding the Enderle Group, Rob was the Senior Research Fellow for Forrester Research and the Giga Information Group, and held senior positions at IBM and ROLM. Follow Rob on Twitter @enderle, on Facebook and on Google+


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