HP, Sun : Changing Dynamics Awaiting A Different Future

Till recently HP was Caught in a no-man's land between hyperefficient Dell and technology powerhouse IBM, trying to cling on to an identity. I have never been a great believer in HP’s abilities in the past – See the post here. However with Mark Hurd at the helm, HP has grabbed share in key markets such as PCS and storage gear, and shown crisp execution reminiscent of its glory days. Businessweek thinks that it may be that all of the company's businesses are now profitable, after years in which its $25 billion printer business covered losses at the rest of the $87 billion company. Hurd has unleashed major cost cuttings and has brought operational focus to initiatives begun by the marketing-oriented Fiorina. While it is a leading supplier of bare-bones servers, HP has been trying for years to increase sales of higher-margin software and services. Challenges in the form of delayed itanium system rollouts, falling demand,impending war on printer market and pricing on consumer models remain. I hear lot of good news about HP from multiple sources – Mark has been quite brutal in getting fat pay management layers out of the company and definitely HP is getting an operational facelift – Field reports in fact confirm that HP is getting lot more focused. HP also has notched some succes in global outsourcing deals and has a decent presence in India as well which can help in engineering and services significantly. It appears that Mark has created a silent shakeup internally – and without demotivating employees seems to be unleashing a grater sense of accountability and focus. So far so good. So what about the other beleaguered big name- Sun. Nicholas Carr points out Sun clearly lacks a coherent strategy - One minute it’s the Anti-Dell, then it’s the Leader in Responsible Computing, then it’s the Fastest Chip on Earth company, then it’s the Volume Is Everything company, then it’s the Free Software company, then it’s "The Dot in Web 2.0," then it's challenging Steve Jobs to a “pod duel” – and that’s just in the last two months. I agree with Mr. Carr that if Sun is to succeed, it needs to get its act together - to adopt a single, coherent market positioning and stick to it with relentless, unwavering discipline. Also to note is the fact that changing landscape creates new but big opportunities - Sun has the wherewithal to play well in the emerging utility computing space – it has the breadth and depth to offer full fledged consulting and professional services, also focus in a concerted way in areas like RFID where they moved in early – with frameworks in place and acquisitions like that of SeeBeyond should give it a leg up- Sun needs to move away from ideological cliches to becoming more operationally focussed (HP has been in some measure able to do this in the last six months) and stay commercially successful.