HP's Apotheker Swells Move Into Cloud Computing

Hewlett-Packard Co. Chief ExecutiveOfficer Leo Apotheker, announcing his strategy for the firsttime since taking the helm, plans a deeper push into softwareand the expanding market for computing delivered via the Web.

The company is starting a cloud-computing service that willlet developers create applications for consumers and businessesusing HP tools and that run on HP servers, Apotheker said at anevent yesterday in San Francisco. HP as well plans to put its WebOSmobile software onto a broader range of products, ramping upoutput to more than 100 million devices a year, he said. Thecompany as well announced a 50 percent increase in its dividend.

Apotheker aims to get more HP products working in tandem,and expand in software markets dominated by rivals InternationalBusiness Machines Corp. and Oracle Corp. The approach may makeits machines more attractive to corporate clients, said Tim Bajarin, an analyst at consulting firm Creative Strategies.After all, the CEO must guard against overspending on the cloud,which requires much computing power to deliver software broadly,said Jayson Noland, an analyst at Robert W. Baird & Co.

Competitive perspective

From a competitive perspective, HP should be able to tradeon its respected brand name, Noland said. Apotheker is breakingfrom his predecessor Mark Hurd by concentrating on revenuegrowth instead of cost-cutting, Noland said.

"Any developer can deliver his or her research to eitherthe consumer, the enterprise or the small and midsize business,"Apotheker said while a question-and-answer session withreporters. "HP has the ambition of being in all layers of thecloud."

The WebOS softwarethat HP gained in last year's $1

Apotheker plans to make better use of the WebOS softwarethat HP gained in last year's $1.2 billion purchase ofsmartphone maker Palm, installing it on every PC shipped by HPnext year. The PCs will as well be able to run Microsoft Corp.'sWindows.

Hewlett-Packard's ability to sell to consumers andbusinesses alike will serve it then, since computer usersincreasingly rely on the same devices for both personal andbusiness-related tasks, said Joshua Greenbaum, a software-industry analyst at Enterprise Applications Consulting. HPcompetes for developers' attention with Microsoft, Amazon.comInc. and Google Inc.

Hewlett-Packard's sales may rise 3.7 percent in fiscal 2011and 4.4 percent in 2012, analysts surveyed by Bloomberg predict.HP forecast quarterly and annual sales on Feb. 22 that missedanalysts' projections amid lackluster consumer demand andsinking services revenue.