Sept. 2, 2011, 1:48 p.m. EDT
Oracle, IBM loom as spoilers of H-P dream
Tech giant’s shift to software, services puts it in crosshairs of rivals
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By Benjamin Pimentel, MarketWatch
SAN FRANCISCO (MarketWatch) — Hewlett-Packard Co.’s aggressive push into the high-end corporate tech market has been called a smart move, but the company’s bold dream faces two big would-be spoilers: IBM Corp. and Oracle Corp.
Bitter competitors: from left, H-P CEO Leo Apotheker, IBM chief Sam Palmisano and Oracle CEO Larry Ellison.
ReutersThis was underscored by developments this week.
On Tuesday, Oracle /quotes/zigman/76584/quotes/nls/orcl ORCL -2.96% , the software giant that morphed from H-P’s /quotes/zigman/229301/quotes/nls/hpq HPQ -4.13% close partner into its bitter competitor, escalated its legal war with the Palo Alto, Calif.-based company by filing a cross-complaint in their dispute over the Itanium platform.
Then, IBM /quotes/zigman/230066/quotes/nls/ibm IBM -1.47% , which many see as the corporate behemoth H-P is trying to emulate, announced two acquisitions in a row this week.
Both companies IBM has agreed to buy — Cambridge, U.K.-based i2 and Toronto-based Algorithmics — are focused on data analytics, business software geared to helping companies analyze and make useful the enormous amounts of data they collect.
“Analytics is definitely one of the big applications that’s emerging for enterprises,” Sterne Agee analyst Shaw Wu said in an interview. “Companies have lots of information and they need a way to manipulate it and monetize it, to help them make better decisions. It’s very software intensive.”
Two weeks ago, H-P made its own big move into analytics when it said it was buying British software maker Autonomy Corp. for $10 billion.
The acquisition is seen as a step toward H-P’s grand ambition: to build up enough software muscle to attract big corporate customers and win lucrative IT contracts in which the game is not just about helping corporate customers cut costs, but also grow their businesses.
“Most of their [H-P’s] services work is about integration and outsourcing and keeping stuff running,” said Gartner analyst Martin Reynolds. “It’s not about transforming the way you do business — which is the way IBM would go.”
H-P chief speaks out
H-P Chief Executive Officer Leo Apotheker tells The Wall Street Journal why he's spinning off H-P's PC unit.
H-P has sent a strong signal that that’s where it wants to go.
In fact, it unveiled the Autonomy deal the day it also stunned Wall Street by saying that it’s considering spinning off its personal-computer business, effectively getting out of the consumer market.
Autonomy is particularly strong in the area of processing unstructured data, which Gartner’s Reynolds describes as covering a range of mostly random information from “every e-mail to every lunch order” that companies collect and hope to monetize.
“It looks like a very brave move to get into that market,” he said.
An H-P spokeswoman said in an e-mail that the company is “inventing the next-generation information platform to empower enterprises to leverage all information through a natural, search-based interface.”
Pushing deeper into enterprise software also plays into the strengths of H-P Chief Executive Leo Apotheker, former CEO of SAP. “As an executive who has spent most of my career primarily in software, this is a world I know well,” Apotheker told analysts.
But it’s also a world in which IBM and Oracle have established pretty formidable beachheads.
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$ 167.82-2.51 -1.47%Volume: 2.34mSept. 2, 2011 1:51p
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