News
 

Bookmark and Share

(0) 

For a number of years now Hewlett-Packard kept its internal research and development (R&D) budget relatively limited, but at the same time acquired numerous new companies to compensate the lack of technologies. For over a year now the company is attempting to change its strategy and boost its own R&D instead. But while Leo Apotheker, the previous chief executive, failed to accomplish the plan, the board of directors remains very committed to it.

"Over the past five or six years, R&D has been cut back too much. We have got to increase that number. HP Labs has not stopped inventing things, but it may be licensing some of its patents outside of HP. We've got to start looking at HP focusing on nearer term opportunities to take things down to [HP Labs]," said Ray Lane, the chairman of HP, in an interview with InformationWeek.

For the fiscal 2011, HP spent $3.25 billion on R&D, or around 2.6% of its $124.7 revenue. But chief executive officer Leo Apotheker made a number of very expensive acquisitions during the year and the R&D budget was somewhat capped. Yet another former CEO of HP, Mark Hurd, cut HP's R&D budget to $2.8 billion, or 2.5% of HP's revenue, in its last fiscal year from $3.5 billion, or 4% of earnings, in 2005, when he took over as CEO. By contrast, IBM has been investing around 6% of revenue into its own R&D in the recent years.

But not only HP wants to boost its own R&D, its wants to somewhat rebalance the spending so to develop both software and hardware efficiently. The chairman of the company claims that while IBM has transformed itself into a service and software company, whereas Dell remained to be a pure hardware firm. Thus, HP's balanced hardware-software approach seems to be the most competitive and balanced one.

"I do think that we're more of a technology company than Dell and IBM. That is where we went off course slightly in the last year - thinking that we could increase, more rapidly than physically possible, the amount of software we do. HP is fundamentally a hardware company surrounded by software and services," said Mr. Lane.

Tags: HP, Business, Hewlett-Packard

Discussion

Comments currently: 0

Add your Comment




Related news

Latest News

Monday, April 14, 2014

8:23 am | Microsoft Vows to Release Xbox 360 Emulator for Xbox One. Microsoft Xbox One May Gain Compatibility with Xbox 360 Games

Tuesday, April 1, 2014

10:39 am | Microsoft Reveals Kinect for Windows v2 Hardware. Launch of New Kinect for Windows Approaches

Tuesday, March 25, 2014

1:57 pm | Facebook to Acquire Virtual Reality Pioneer, Oculus VR. Facebook Considers Virtual Reality as Next-Gen Social Platform

1:35 pm | Intel Acquires Maker of Wearable Computing Devices. Basis Science Becomes Fully-Owned Subsidiary of Intel

Monday, March 24, 2014

10:53 pm | Global UHD TV Shipments Total 1.6 Million Units in 2013 – Analysts. China Ahead of the Whole World with 4K TV Adoption

10:40 pm | Crytek to Adopt AMD Mantle Mantle API for CryEngine. Leading Game Developer Adopts AMD Mantle

9:08 pm | Microsoft Unleashes DirectX 12: One API for PCs, Mobile Gadgets and Xbox One. Microsoft Promises Increased Performance, New Features with DirectX 12

3:33 pm | PowerVR Wizard: Imagination Reveals World’s First Ray-Tracing GPU IP for Mobile Devices. Imagination Technologies Brings Ray-Tracing, Hybrid Rendering Modes to Smartphones and Tablets

2:00 pm | Nokia Now Expects to Close Deal with Microsoft in Q2. Sale of Nokia’s Division to Close Next Month