The HP Way and the Rise of SAP

Joshua Greenbaum
Here's my post-mortem on Carly Fiorina and HP: No enterprise software strategy meant no future. The HP Way took a company that was a leading provider of what passed for enterprise software in the 1980s and bankrupted that legacy through the 1990s and into the current century. The fact that SAP was just beginning its steady climb to the top of the enterprise software heap as HP was beginning its slow march south is more than ironic -- it's emblematic of how shiny Silicon Valley stars lose their luster and upstarts from the beet fields of Germany come to replace them.

HP was a leading partner of SAP in the 1990s, and had a lot of clout and influence in key verticals like oil and gas. HP also understood Unix, client/server, and relational databases in a way that IBM mainframe-focused companies like SAP couldn't grok. HP's problem is that it never extended that vertical knowledge and deep technical know-how into anything more specific than faster hardware. SAP, by contrast, kept moving up the value chain by building business knowledge into software, and showing that business process, not fast processors, was what drove business competitiveness and innovation.

By the time Carly showed up, coming from a similarly software-challenged Lucent, the die was cast. Her big deal was to buy more hardware -- Compaq -- and her big goof was to let that other value-add -- consulting and services in the form of PriceWaterhouseCoopers -- get away. The result was descending innovation capacity

    Requires Free Membership to View

where it counted the most and a growing capacity for the things that matter the least -- more hardware.

Meanwhile, SAP was showing that software can really transform companies in ways that HP's hardware couldn't. HP focused on harvesting wheat, SAP baked bread. The SAP Way has turned out to be by far the better strategy. Which is all the more ironic because HP didn't have to become the has-been it is today. IBM has showed that hardware companies can bake bread too, though with a vastly different recipe book.

What's left for HP? It's time to move up the food chain, not down. There is actually a lot of software and business knowledge at HP, it's just been buried in bad management and bad strategy for too long. Unleashing this knowledge might be the foundation of a new HP. If Carly's departure proves one thing at all, it's that HP has definitely lost its Way.

There are Comments. Add yours.

TIP: Want to include a code block in your comment? Use <pre> or <code> tags around the desired text. Ex: <code>insert code</code>

REGISTER or login:

Forgot Password?
By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy
Sort by: OldestNewest

Forgot Password?

No problem! Submit your e-mail address below. We'll send you an email containing your password.

Your password has been sent to: