HP’s Acquisition Frenzy 10 Potential Ramifications of HP’s Spending Spree
1. No Cash? No Go.HP has boatloads of cash. In fact, the company is one of the richest companies in the technology industry. But that doesn’t mean that it will be able to stay that way indefinitely. It has spent a lot of money recently. And all that cash could have been used for investment in new technologies. It’s not the end of the world, but it’s something that should be kept in mind.
No Title
2. Security ImprovesIt’s entirely possible that with ArcSight now part of HP’s services, the company will have a far better security platform. Previously, HP was behind companies like IBM when it came to security. But ArcSight provides several outstanding services that make it an ideal acquisition target. Expect HP’s security solutions to be vastly improved.
No Title
3. Storage Solutions ImproveAs bad of a decision as it was for HP to acquire virtual-storage company 3PAR for such a high premium, it’s likely that the firm’s storage solutions will be much better for the company. 3PAR might not seem like the most ideal choice for HP, but it will help the company appeal more to corporate customers.
No Title
4. It Becomes GoogleThe last thing HP should want right now is to become Google. The search giant has been on a spending spree over the last few years, and in the process has done away with many of the firms, and simply taken what it has needed. HP can’t do that. HP must use the talent it has acquired, along with the products. An acquisition is more than just taking over a single firm’s technology. Acquisitions are about deriving quality from a firm. HP must remember that.
No Title
5. It Forgets About ComputersHP’s latest acquisitions seem to suggest that the company has forgotten about computers. Palm is about mobile. 3PAR is about virtual storage. And ArcSight is about security. But what about its computing business? With Mark Hurd gone, the firm needs to ensure that it stays ahead of the competition. If it doesn’t, real trouble could ensue.
No Title
6. Its New Leader Changes EverythingSpeaking of Mark Hurd, the time has come for HP to finally find itself a new leader. But with all of these most recent acquisitions, it’s entirely possible that the new leader will follow a much different strategy than the board currently has in mind. HP’s current leaders might have found value in these acquisitions, but there’s no telling what the company’s next CEO will think.
No Title
7. It Becomes Too Mobile-FocusedWhen HP announced that it had acquired Palm, some wondered what it would be doing with the mobile firm. So far, it hasn’t done anything worthwhile. But that could change. In fact, it’s possible that HP becomes entirely mobile-focused as it attempts to get something out of Palm. At this point, no one knows what the future holds for HP’s mobile division, but something will eventually give.
No Title
8. It Forgets About MobileAlthough it’s possible that HP will become too focused on its mobile division, it’s also possible that the company forgets about that space. Palm was acquired months ago. Now, it has been focusing on its enterprise solutions. Is it possible that Palm will fall by the wayside? It’s perhaps more possible now than ever.
No Title
9. It Forgets About the CEOWith all of this focus on acquiring new companies, it’s possible that HP will simply forget about its desire to land a viable Hurd replacement. It seems that someone at HP thinks they know how to run the company and carry it forward. Rather than find someone on the outside, maybe the company is grooming that person to lead it forward.
No Title
10. It Makes More Bad MovesIt’s tough to see what HP was thinking when it acquired 3PAR. The virtual-storage firm is undoubtedly a worthwhile purchase. But for the price HP paid, it was too expensive. And HP’s board was panned for acquiring the firm at such a high price. It’s understandable. But as it continues to make moves, it seems somewhat likely that HP will make even more bad moves going forward.