Had decline in HP shopping anything to do with the rise in the earnings of three including Apple, IBM, and Teradata? HP earnings in the first quarter plunged sharply 44 per cent in the first quarter. And still, the company is planning to dare diverting capital investments to new fields of information security, data storage, etc.
Will it be successful in venturing out into different areas at the time when investors are more comfortable in pouring in money in IBM’s shares because of its strong financial position and appreciation in share value?
Experts do not consider it a rational decision. “Reports indicate that the company intends to boost its purchasing of Taiwanese electronics by 25 per cent to reach $30 billion in expenditures. I am not really sure what HP thinks is the point of such a move,” wrote an analyst in an article at seekingalpha.
“At a time when the company should be looking to cut costs, increasing the amount of money it is spending in certain areas seems like a bad idea to me,” he commented.
Importantly, HP is all set to jump to cloud computing by launching its own platform. Observers are seeing the entry by the company into cloud computing as intensification of market competition and tough time for the leading e-retailer Amazon.
“Hewlett-Packard’s alternative to Amazon Web Services (AWS) has been underway for over a year, and is likely to be the most ambitious project yet under Meg Whitman, who became chief executive of the Palo Alto, Calif., technology company last September,” said The New York Times' Quentin Hardy. “While seemingly focused on Amazon, the company is also looking at the project as a new way to compete with its traditional rivals.”
The sale of cloud resources is likely to prop up sagging net income of a world’s leading technology company and be compensation to floppy HP shopping.
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