I was intrigued by today’s announcement that HP is going to purchase Palm. Unlike many of the folks in the investment world and technology analyst community, I think the decision makes a lot of sense – and could possibly be a worthy investment by HP. While some have stated that the $1.4 billion price was a bit much, I’m not so sure I see it that way.
While most view the Palm acquisition to be a mechanism for HP to quickly become competitive in the smartphone business, I actually think this acquisition gives HP something more valuable than a smartphone hardware platform, it gives them a flexible operating system for a variety of hardware devices.
Why does this matter?
It gives HP the secret sauce to offer products across a number of consumer and business product lines that would allow them to flex their manufacturing muscle, innovative talents, and marketing might. They could easily leverage this acquisition to deliver some very captivating offerings: an alternative Slate/Tablet, a home media server, an e-reader, and possibly a hand-held media player to name just a few.
Now many of you might think – does HP really want to take on Apple and the iPad? Why not? The iPad suffers from limited expansion, a non-replaceable battery, and an Orwellian architecture that limits software development, distribution, and innovation. The iPad also boasts a manufacturer with a draconian policy that hinders (or prevents) vendors from delivering new products (e.g. Adobe flash). HP could deliver a tablet device that is priced lower (no OS license fees), more attractive to developers (well documented, open software architecture), and supports a non-1984 software distribution mechanism.
How about a home media server that actually works as reported, installs without requiring a 90 minute, Redmond-based software registration and installation process, runs a multitude of different video and music formats, and possibly even providing DVR functionality? If any of you have tried to install and setup a PC-based home media server, you know what I’m talking about. HP could deliver simplicity to the home media server market.
Now I’m sure that many of you might be puzzled by the idea of an eReader. While Amazon, Barnes & Noble, Sony, and several other players have delivered offerings, none of them have focused on the business market. An HP eReader could easily be positioned as a documentation platform for business (as well as consumers). Consider the world of business documentation, manuals, and reference materials. While many sources exist on CD and some offer internet access, I’m not aware of any that allow for a hand-held portable use (you know…like a real book or manual). Maybe I’m the only one with a bookshelf in my office—but I doubt it. Consider linking a eReader with a media server. HP is ubiquitous in the laser printer space—what’s to keep them from becoming ubiquitous in the business documentation space?
HP has a great reputation working with 3rd party vendors (software, maintenance, accessories, supplies, etc.) . They realize the importance of the channel, the value of a customer relationship, and the benefit of sharing revenue with partners. Oh, and they don’t extract a pound of flesh (or a royalty fee) based on their partner’s product sales like that fruit-logo’ed company.
At the recent Gartner MDM Summit in Las Vegas I was approached at least a half a dozen times by people wondering what MDM vendor to choose. I gave my usual response, which was, “What are you trying to accomplish?”
Normally a (short) conversation ensues of functions, feeds and speeds, which then leads to my next question, “So, what are your priorities and decision criteria? The responses were all the same, and I have to admit that they surprised me.
“We know we need MDM, but our company hasn’t really decided what MDM is. Since we’re already a [Microsoft / IBM / SAP / Oracle / SAS] shop, we just thought we’d buy their product…so what do you think of their product?”
I find this type of question interesting and puzzling. Why would anyone blindly purchase a product because of the vendor, rather than focusing on needs, priorities, and cost metrics? Unless a decision has absolutely no risk or cost, I’m not clear how identifying a vendor before identifying the requirements could possibly have a successful outcome.
If I look in my refrigerator, not all my products have the same brand label. My taste, interests, and price tolerance vary based upon the product. My catsup comes from one company, my salad dressing comes from another, and I have about seven different types of mustard (long story). Likewise, my TV, DVD player, surround sound system, DVR, and even my remote control are all different brands. Despite the advertisers’ claims, no single company has the best feature set across all products. For those of you who are loyal to a single brand, you can stop reading now. I’m sure you think I’m nuts.
The fact is that different vendors have different strengths, and this causes their products to differ. Buyers of these products should focus on their requirements and needs, not the product’s functions and features. Somehow this type of logic seems to escape otherwise smart business people. A good decision can deliver enormous benefits to a company; a bad decision can deliver enormous benefits to a company’s competitors.
What other reason would there be for someone saying, “We’re a [vendor name here] shop?” Examples abound of vendors abandoning products. IBM’s Intelligent Miner data mining tool, OS/2, the Apple Newton, Microsoft Money are but a few of the many examples.
Working with a reputable vendor is smart. Gathering requirements, reviewing product features, and determining the best match creates the opportunity for developing a client/vendor partnership. So why would anyone throw all of that out and just decide to pick a vendor? I guess lots of folks thought that Bernie Madoff was their partner. Need I say more?
photo by xJasonRogersx via Flickr (Creative Common License)