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Rahul Sood, the founder of VoodooPC and a former employee of Hewlett-Packard, said that HP needs to keep its personal systems group (PSG) and not spin it off, as the company plans. Instead of focusing on enterprise customers or services to keep profit margins high, Mr. Sood believes that HP needs to focus on “real people” and try to improve profitability, value and user experience of its PSG unit instead.

Many believe that by spinning off or selling the personal computer business (which also includes smartphones, tablets and other products for personal users), HP wants to reproduce the deal made by IBM several years ago, when it sold its PC business unit to Lenovo Group back in late 2004. But Rahul Sood, who served as chief technology officer of HP’s global gaming business, believes that HP will not be able to duplicate such a deal successfully. Instead, HP is risking losing its PC biz and eventually vanishing into oblivion.

“If they choose to go ‘the IBM route’ HP risks missing the winning formula of IBM and they could end up forgetting about the consumer and focusing on the enterprise. In my opinion catering to the ‘enterprise’ is such an old school way of thinking. Companies should cater to people, and the enterprise will follow, because real people run the enterprise. RIM is having a tough time because the competitor that displaced them is catering to real people, not Wall Street, not the enterprise. […] I believe if you build beautiful products that excite your customers then shareholders will ultimately benefit. I believe if you cater to shareholders then customers will suffer,” said Rahul Sood in an interview with TechCrunch web-site.

Mr. Sood, who currently works as the general manager for system experience in the interactive entertainment business of Microsoft Corp., believes that the main problem of HP’s PSG is the lack of vision for further evolution. The problem worsens by the fact that the PC business is much more than a business for HP, but rather the face of HP that everyone can see and understand.

“I understand that sometimes to fix a disease you need to cut off a limb. Unfortunately I think they’re cutting off more than one limb, and they are missing the synergies required to successfully operate a profitable enterprise + consumer model. Though HP has separate divisions, the company is very much dependent on each other. You can’t simply cut off one head and grow another, you’ll bleed out. You can absolutely fix dysfunctional organizations without breaking them apart. Such a move requires strong leadership (empowered leaders), a believable vision, and a strategy that resonates,” wrote Rahul Sood in a blog post.

The big question is whether HP is generally capable to transform its personal systems business. HP managed to virtually kill the Voodoo brand and created a mess out of its PC products mix. While independent, Voodoo PC used to offer a broad family of various desktops as well as several laptops. But after the acquisition by HP the only Voodoo-branded systems released were Omen high-end gaming desktop as well as Envy luxurious notebook. While initially Rahul Sood believed that HP would offer significant opportunities to leverage the Voodoo technologies, eventually he admitted that the "things got a little complicated" and implied that he no longer could influence the development of advanced gaming products at HP. At present HP does not offer Voodoo products.

Tags: Voodoo PC, HP, Business, Microsoft

Discussion

Comments currently: 5
Discussion started: 08/26/11 10:24:27 PM
Latest comment: 09/04/11 12:52:38 AM
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1. 
A former employee making this kind of statements is a bit ambiguous, but I agree. This is actually obvious and not that groundbraking. Maybe Mr. Sood is doing a closure for his old career this way? A company that caters for the shareholders and disses the consumer is Neoliberal, do anything to anybody, bound to make the consumers suffer. These things phase out usually.
0 0 [Posted by: TeemuMilto  | Date: 08/26/11 10:24:27 PM]
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Hmmm.....he is mostly right. If you sell great products, revenue growth and profitability will follow and shareholders will benefit. If you are just trying to boost your stock price for 3-4 Quarters without a long-term vision, you'll only please shareholders temporarily. HP doesn't have any vision at all. Their firesale of HP Touchpad only highlights how incompetent the management is!

Also, considering their server couldn't even handle the high flow of customers who wants the touchpad, how is someone like that going to try to sell "corporate enterprise services"?

HP managed to buy out Palm and run it into the ground. They also managed to run Compaq and HP into an unprofitable business. They don't know what they are. Expect their printer business to suffer significantly as their PC business spinoff 12-18 months transition takes place.

Keep in mind, if you are trying to sell your business, as a corporate client I am not going to renew my contract with you. So expect recurring revenue to decline even further. They'll be lucky to sell that PC division for $10B (Compaq acquisition cost $25B I believe).....huge fail.
2 0 [Posted by: BestJinjo  | Date: 08/26/11 10:46:20 PM]
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Incompetent management is how Neoliberal companies do business. They are the punch sacks of the aggressive share-holders, with skill or without skill, they are still treated like a helper who's paid by the hour. Other than that, this article was not about business strategy, it was about the distinction of running the company according to the customer's will, what the consumers like, instead of the shareholders. The latter is also one of the Neoliberal feats.
0 0 [Posted by: TeemuMilto  | Date: 09/04/11 12:52:38 AM]
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2. 
While I can see Sood's point of view, I think his vision is a bit tainted by the fact that HP bought Voodoo PC and destroyed it. ... Sood owned and created Voodoo PC.

So I can see him bad mouthing HP's decision, since HP didn't share the same vision as he did. His vision may be better. Who knows.
0 0 [Posted by: MonkRX  | Date: 08/27/11 11:15:30 PM]
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3. 
honestly i had to deal with their 6000/7000/8000 series of printers

always something wrong with them, always a service call. and sometimes dealing with HP support was annoying/time consuming.
i would just list everything i had done, before they could get going...then they'd be like uh...ok we'll send a service tech.


the older printers we still had....never broke down, we'd hook
them back up. we were supposed to "recycle" them, etc

however we kept them as back ups
which was a good thing
0 0 [Posted by: ultimaone  | Date: 08/29/11 07:11:17 AM]
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