Hewlett-Packard stakes its future on the 'cloud'

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The Independent Online

Leo Apotheker, the German software executive parachuted in to run Hewlett-Packard (HP) after the traumatic ousting of Mark Hurd last year, has adopted "cloud computing" as a unifying theme for the troubled IT giant.

The trend towards consumers storing more of their data on internet networks such as Facebook, and businesses outsourcing their computing and data storage needs, plays to HP's strengths, Mr Apotheker said, making his debut presentation to the financial community after four months travelling around HP's global businesses.

The event, at the Yerba Buena Centre in San Francisco that has often been the setting for product unveilings by Apple's Steve Jobs, was Mr Apotheker's first major opportunity to counter doubts over his appointment, disappointment over HP's sales performance, and growing concern over the company's position in an increasingly competitive technology landscape.

"The world around us is changing faster than ever," he said, saying that consumers and businesses are living and working online, and boundaries are collapsing everywhere. "The old paradigm of one person with separate consumer and professional lives is over," he said. HP, with businesses ranging through consumer smartphones, corporate servers and IT services, would be "the platform for the cloud and connectivity", he said.

But his visionary language masked the fact there will be little immediate change to corporate strategy, and his promise to launch new cloud services – including an "open app store" to rival Apple's and a "public cloud" to rival Amazon's popular business-to-business service – invited more questions than he appeared to have answers.

The app store, and the technological architecture behind it, will be unveiled later this year or in 2012, he said. The public cloud will use existing HP resources such as data centres and server farms, he insisted, to analysts who suggested it must involve major investment if HP is to catch Amazon.

The incremental nature of the strategy was revealed in financial details given by the company. Chief financial officer Cathie Lesjak said there would be no change to capital allocation at HP.

Ananda Baruah, an analyst at Brean Murray Carret, said HP had begun much of the work to integrate its hardware, software and IT services offerings under Mr Hurd. "Mr Apotheker has now communicated the message in his own way and added his own wrinkles and a framework which he can now work from and point to."

The well-respected Mr Hurd was fired after an investigation into accusations of sexual harassment – which were themselves not proved – found evidence of other ethics violations. Mr Apotheker had been ousted from German software giant SAP a year ago after disappointing performance there.

The giants of technology are increasingly stepping on each other's toes: as phones become computers; as software shifts from being something people loaded on to their computers and instead becomes a service they access on any device; and as businesses rent spare data-storage space and computing capacity from giant IT companies, such as Amazon, instead of buying their own hardware.

HP – while still the biggest shipper of personal computers and printers – has catching up to do in many of these new businesses.