Here's a tale of two PC titans: HP and Dell. One executes well every quarter. The other doesn't. Both see big PC upgrade cycles ahead. Both are looking to ride... Continued »
Here’s a tale of two PC titans: HP and Dell. One executes well every quarter. The other doesn’t. Both see big PC upgrade cycles ahead. Both are looking to ride a bump in enterprise spending courtesy of Windows 7.
Place your bets.
As enterprises ponder the PC upgrade cycle and a move to Windows 7 tech executives are likely to have two primary vendors pitted against each other: HP and Dell.
The earnings conference calls from HPand Dell were very similar. Both talked services. Both talked upgrade cycles. And both talked up Windows 7 (see HPand Dell’s financial results).
HP CEO Mark Hurd said Monday on the company’s fiscal fourth quarter conference call:
The personal systems group also delivered in Q4, extending its market leadership by more than a full point yet again. We saw good consumer acceptance of Windows 7, particularly in the U.S. Given that we gained double-digit points of market share in U.S. enterprise and have claimed the top market position, we are well-positioned to win when corporations upgrade to Windows 7. PSG delivered healthy operating margins despite increasing commodity costs.
Dell CEO Michael Dell also was bullish about Windows 7—and also saw component costs rise. He said a week ago that PC growth could be in the mid-teens:
I think there is an aging installed base for sure. You just have an accumulation of new technologies at the hardware, software, virtualized client and these IT managers really know they cannot extend the life of these client assets forever. While I don’t think it is all going to occur at once, I think it will be a rolling refresh that occurs over perhaps 18 months, I can’t remember a time when a very high percentage of them skipped an entire operating system.
And Hurd and Dell sounded like long-lost twins about the corporate upgrade cycle too. Here’s Dell:
We think we are holding or gaining share in the right kind of price points. Our efforts on the cost side should expand our ability to profitably compete in a larger portion of the price points. What I would also tell you is that the pipeline of client opportunities we are already seeing more client activity in the last 30-60 days than we have in a long time and the pipeline for client activity kind of going forward into next year is the strongest it has been in a long time as well. So if I look at our commercial businesses the second quarter was kind of a bottom. The third quarter was certainly better. October was the best and November will be better than October.
Here’s Hurd’s at bat as he references HP’s share gains and the corporate upgrade cycle:
I think it is important to note we don’t usually start with an objective of gaining share. It’s more the result of us just trying to do the right work for the customer and I think as we mentioned a couple of times, we have increased our sales coverage, which we think is part of the reason that you have seen this performance occur as it has. Second, we’ve worked really hard to work on our service experience and the service experience is a really big deal, So it’s a combination of trying to get more at bats and frankly in the U.S., this is the place that we haven’t had as many at bats as we’d like to have and we have increased sales coverage there. Secondly, trying to continue to focus on service, so yeah, we feel pretty well-positioned that as long as we can maintain the at-bat level and with the service experience that we are delivering now, that we think we will be in pretty good shape. I think you couple that with the product line-up that we have just announced and Windows 7, we think we’ve got a pretty compelling offer so yeah, we’re optimistic about it.
Now it’s possible that this Windows 7 upgrade cycle will be big enough to lift all PC players, but ultimately it’s death match with Dell and HP—especially in the enterprise. The rub: Dell’s financial performance is spotty and that reflects what could be a vicious crunch. HP squeezes Dell from above and Acer hurts the PC maker from below.
Chris Whitmore, an analyst at Deutsche Bank, said that HP gained share at the expense of profit margins. Whitmore wrote:
Although HP’s PC units grew 8% year over year, we estimate HP’s operating profit per unit dropped 30% year over year as ASPs were down about 20% year over year and commodities tightened.
That fact could mean some bad news for Dell. HP is diversified enough to squeeze Dell with minimal impact on its overall profitability. Meanwhile, HP’s scale means it can weather component pricing fluctuations better.
No matter how you slice it HP has Dell outgunned with a larger services unit (acquiring EDS was the best move HP ever made), more foot soldiers and more momentum. Simply put, HP has the arsenal to squeeze Dell in the critical PC business. Dell may be optimistic about the PC buying cycle, but that doesn’t necessarily mean it will harvest all the rewards.
Hewlett Packard today reported its fourth-quarter earnings that were in-line with a preliminary release last week, when the company announced plans to acquire 3Com. For the quarter, the company reported earnings of $1.14 per share on $30.8 billion in sales. Analysts had been expecting of $1.13 per share on $30.4 billion. (Statement)
For the full year 2009, the company reported earnings of $3.85 per share on sales of $114.6 billion.
Looking ahead, the company forecast earnings of $1.03 to $1.05 per share on sales of $29.6 billion to $29.9 billion for the first quarter - which would include the holiday season. For the full year 2010, the company raised its projection to $118 billion to $119 billion, up from $117 billion to $118 billion and also upped its earnings projection to $3.65 to $3.75 per share, up from $3.60 to $3.70. The projections do not reflect any impact from the 3Com acquisition, the company said.
Among the highlights of the quarter was the eight percent jump in revenue, to $8.9 billion, in Services, which has been a darling of the company as its integrated EDS.
On a call with analysts, Hurd said the integration of EDS, which he called an “enormous asset,” has gone well and that the company is just starting to leverage it to position HP in not only services offerings but through hardware and software, as well. In a statement, HP Chairman and CEO Mark Hurd said:
HP’s solid performance in Services drove record profit, and the accelerated pace in signings creates strong momentum going into 2010. Our operational execution and improving cost structure generated strong quarterly and year-end results. We expect to outperform the market due to our significant scale, broad portfolio and market-leading position.
In contrast, the imaging and printing group saw a revenue decline of 15 percent, down to $6.5 billion. Supplies - aka ink - revenue was down 8 percent. Printer unit shipments were down 20 percent, with commercial units down 38 percent and consumer units down 14 percent.
Hurd said the group is positioning itself for recovery with strategic moves, including controlling costs and inventory levels, as well as corporate partnerships and web-connected printers. He said the company sees mergers and acquisitions as a way of quickly entering adjacent businesses that work well with HP’s strategies. He touted the 3Com deal as one that will advance HP’s offerings in security and networking, enabling it to “deliver the next generation of data centers.”
Finally, Hurd said the company is positioned stronger than when it entered the economic downturn. The economy remains challenging, Hurd said, but that there are “encouraging signs of recovery” that are starting to emerge in certain markets.
Shares of HP were up about 2 percent in regular trading, closing at $51.02. In after hours trading, shares saw a slight decline.
Netbooks — those underpowered mini laptops with 7-inch screens and unusable little keyboards — are a dying fad. However, the legacy of the netbook will be that inexpensive notebook computers are here to stay, and they are lighter and thinner than ever.
Analysts and pundits will continue to use the term “netbook” but I’m going to argue that the device that we originally called the netbook is being phased out — and thankfully so.
I have a netbook. It’s small—9 inches—and it now belongs to my daughter. My hands are too big. The screen is too cramped. And I’m inclined to think that Jason’s right. The netbook is just a passing fancy.
And then I follow the numbers. Look at all the people buying netbooks. NPD’s DisplaySearch reckons that netbook sales surged 264 percent in the second quarter from a year ago. Revenue for the overall notebook market declined. Here’s the scorecard.
The special thing about it that makes me happy is that it’s small and so handy. I don’t need to play games or do lots of complicated things on the street. But this one is just 100% what I need and I will never give it up.
And.
I bought a Dell Mini 9 in 2008 and have never regretted it. It’s small enough to carry in my purse, boots up quick, and maybe it’s because I have small fingers, but the size of the keyboard has never been an issue.
That said, it is not my main PC, nor would I ever try to make it such. I bought it to browse the internet and do some light word processing - the heaviest lifting I have ever asked it to do is stream movies across my wireless home network - and it has always performed flawlessly.
And.
I bought mine due to travel restrictions imposed by the airlines on a trip to Australia in 2008 and love it. I use a regular laptop/notebook as my main computer at home but it is too big and heavy to travel with. The Netbook allows me to use almost all my programs, some engineering, spreadsheets, topographic maps and GPS routings. I even use it at home with my wireless network, sometimes in bed at night while reading books on exploring Utah so I can see the topographic maps and the satellite pictures of the area. No it doesn’t replace the desktop notebook but darn near.
Netbooks aren’t for me, but apparently there are a ton of allegedly confused consumers still buying them. Dell and Microsoft have downplayed the netbook to some degree, but what else are they going to do? After all, the netbook is a margin killer.
So what’s the future of the netbook? It’s way too predictable to envision lightweight notebooks replacing the netbooks. Netbook 2.0, 3.0 and 4.0 are likely to have different form factors. Perhaps the Droid and the iPhone are really your netbooks. Perhaps Apple redefines the netbook category with a tablet. Perhaps people keep buying the current versions of netbooks. Netbooks will hang around and probably thrive because people like second and third computing devices. The form factor may change, but the market niche isn’t going anywhere.
In this installment of The Big Question podcast TechRepublic’s Jason Hiner and I talk about the evolving tech landscape as mergers and acquisitions accelerate. There are plenty M&A possibilities ahead, but tech industry may wind up with giant vendors and startups and little in between.
Meanwhile, a lot of companies will have to make some big decisions. Will IBM get back into networking hardware? What should companies like Juniper and Brocade do? Will there be enough strong No. 2 players to go around?
Guest post: HP is purchasing 3Com. With every merger comes some customer trepidation about changes that could be made. TechRepublic’s Scott Lowe lists four items he’ll watch during the merger to decide if Procurve continues to be a viable solution. This ran on TechRepublic’s IT Leadership blog.
HP and 3Com announced that HP will acquire 3Com for about $2.7 billion. Obviously, with HP’s Procurve unit currently the only company other than Cisco to enjoy a spot in Gartner’s leadership quadrant for enterprise LAN and 3Com’s focus on all things networking, there is quite a bit of overlap between HP’s current offerings and those provided by 3Com. At the same time, this acquisition will help HP expand their share of the networking market. But there is a distinct possibility that HP’s expansion in enterprise LAN and the resulting product changes that will probably have to take place could change HP’s current approach, which have been very customer-friendly, to policies that might not be quite as beneficial to the customer but that would improve the bottom line for HP.
At Westminster College, we’re committed HP Procurve customers; we jettisoned our Cisco infrastructure back in the Spring of 2007 and have been extremely happy ever since, both from a functional standpoint as well as from a financial standpoint. Frankly, I’m a pretty big Procurve fan. As far as 3Com is concerned, the company, in my opinion, hasn’t exactly made particularly good decisions over the years. Back in 1999, I had just completed the installation of a 3Com CoreBuilder 9000 core switch when 3Com made the surprise announcement that the company was exiting the enterprise networking space. Part of me is happy to see HP acquiring 3Com and I hope that the merger goes smoothly. There are, however, a few items I’ll watch for. Note that the items on my list are considered as an existing HP customer.
Cisco and HP have been duking it over their visions for the next generation data center architecture and the battle is just getting interesting. Cisco entered the server market and HP has countered by purchasing 3Com for $2.7 billion.
Simply put, both Cisco and HP have encroached on their rival’s home turf. The 3Com purchase gives HP a foothold in security (3Com owns TippingPoint), switches and routers (statement, breaking news). HP also becomes the No. 2 networking vendor. Cisco CEO John Chambers foreshadowed the HP collision course back in August. He declared HP a clear foe.
Hewlett Packard said today that it will acquire networking company 3Com for $2.7 billion. or $7.90 per share, a move that attempts to even the playing field with networking company Cisco, which rocked the industry earlier this year with plans to broaden its data center offerings. (Statement, Techmeme) In a statement, Dave Donatelli, HP’s executive vice president and general manager of Enterprise Servers and Networking, said:
Companies are looking for ways to break free from the business limitations imposed by a networking paradigm that has been dominated by a single vendor. By acquiring 3Com, we are accelerating the execution of our Converged Infrastructure strategy and bringing disruptive change to the networking industry. By combining HP ProCurve offerings with 3Com’s extensive set of solutions, we will enable customers to build a next-generation network infrastructure that supports customer needs from the edge of the network to the heart of the data center.
The boards of directors of both companies have already approved the deal, leaving it subject to approval by shareholders and regulators. The companies said they expect the deal to close in the first half of 2010.
In a call with analysts, Donatelli presented reasons that 3Com and HP is a good fit for a changing industry and said that today’s news would be remembered as the day that the networking industry is being “completely transformed.” He said it was important to note that both companies are entering this deal with “great momentum.” 3Com, for example, already had 30 percent share in networking in China.
HP was pretty straight-forward about its reasons for the acquisition. It made this deal to grow and change what’s occuring in the market today. Donatelli said the deal is part of the company’s bigger Converged Infrastructure strategy, a push that brings networking, PCs, servers, storage into the mix. When the deal is complete, the combined company would be ready “from Day One” to launch its new portfolio of offerings.
Separately, HP also released preliminary fourth quarter results, with earnings coming in at $1.14, beating Wall Street’s estimates of $1.12. Revenue was $30.8 billion, down 8 percent from a year ago but up 12 percent sequentially. Wall Street had been expecting revenue of $29.8 billion, according to Thomson Reuters. In a statement, Chairman and CEO Mark Hurd said:
Solid execution drove exceptional performance for HP this quarter, fueled by significant growth in China, We are delivering on our strategy and are well positioned going into 2010.
The company also raised its earnings and revenue guidance for the fourth quarter and fiscal year. For thej first quarter of fiscal 2010, it expects earnings of $1.03 to $1.05 on sales of $29.6 billion to $29.9 billion. Full year revenue is now expected to come in between $118 billion and $119 billion, up from the previous estimate of $117 billion to $118 billion. Full year earnings per share is expected to be in the range of $4.25 to $4.35, up from its previous estimate of $4.20 to $4.30.
The New York Attorney General’s office today accused chip maker Intel of engaging in “a worldwide, systematic campaign of illegal conduct,” including paying kickbacks and threatening computer makers, and filed federal antitrust charges against it. (PDF of Complaint)
In a statement, New York Attorney General Andrew Cuomo said that e-mails revealed that Intel has scored exclusive agreements with computer makers to use its microprocessors by resorting to “rebates” and threats, such as cutting off payments, funding a competitor or ending joint development ventures. In a press release, Cuomo said:
Rather than compete fairly, Intel used bribery and coercion to maintain a stranglehold on the market. Intel’s actions not only unfairly restricted potential competitors, but also hurt average consumers who were robbed of better products and lower prices. These illegal tactics must stop and competition must be restored to this vital marketplace.
Intel spokesman Chuck Mulloy told the Wall Street Journal that the company will defend itself against the charges and that “Neither consumers who have consistently benefited from lower prices and increased innovation, nor Justice, are being served by the decision to file a case now.”
Cuomo’s office said the company also tried to erase traces of its practices by “eliminating crucial but flagrantly objectionable provisions from written agreements or by camouflaging language about illegal guaranteed market shares with terms like ‘volume targets.’ ”
The AG’s office noted specific instances of the illegal practices involving Intel and Dell, HP and IBM. Among the allegations:
From 2001 to 2006, Intel granted Dell a privileged position vis-à-vis other computer makers in return for Dell’s agreement not to market any products from Advanced Micro Devices, Intel’s major competitor
Intel threatened HP that it would derail development of a server technology on which HP’s future business depended if HP promoted products from AMD
Intel paid HP hundreds of millions of dollars in rebates in return for HP’s agreement to cap HP’s sales of AMD-based products at 5% of its business desktop PCs
Intel paid IBM $130 million not to launch an AMD-based server product
Intel threatened to pull funding for joint projects that benefited IBM if IBM marketed AMD-based server products
The AG’s office also offered examples of instances where PC makers agreed to go along with Intel’s practices, specifically a 2006 deal between HP and Intel that involved payment of $925 million to HP to increase Intel’s shares of HP’s sales at AMD’s expense and a collaboration between Intel and Dell to market microprocessors and servers at prices below cost to “deprive AMD of strategically important competitive successes.”
However, the AG positions the PC makers as victims here, not collaborators. For example, the AG’s office offers these examples, unveiled as part of its 20-month investigation:
Internal e-mail from IBM executive in January 2005: “I understand the point about the accounts wanting a full AMD portfolio. The question is, can we afford to accept the wrath of Intel…?”
Internal e-mail from HP executive in June 2004 after HP defied Intel and launched an AMD product: “Intel has told us that HP’s announcement on Opteron [AMD’s server chip] has cost them several $B [Billions] and they plan to ‘punish’ HP for doing this.”
Internal Dell e-mail in February 2004 regarding the possibility of Dell ending its exclusive relationship with Intel: “PSO/CRB [Intel CEO Paul Ottelini and Intel Chairman Craig Barrett] are prepared for jihad if Dell joins the AMD exodus.
Internal e-mail from Intel executive in April 2006: “Let’s talk more on the phone as it’s so difficult for me to write or explain without considering anti-trust issue.”
I don’t have to design data centers, but I do have to play a knowledgeable wonk on the Web from time to time. With that in mind, I attended two data center presentations at the Gartner IT Symposium to see what I could learn.
My knowledge about the data center essentially boils down to one word: Money. Companies are building new data centers to save money on power and better utilize their computing power. Sure, cloud computing is a factor, but a small one for enterprises at this juncture. These people are building data centers in a big way. The other money point: Vendors are killing each other to be the data center king. Cisco takes on HP. IBM is in there. Oracle too (via Sun). And unfortunately for IT buyers each vendor has a different twist on data center architecture.
Simply put, I’m a data center economics major with a minor in things like raised floors, cooling systems, server racks and other items.
Here’s what I learned:
Companies are only building what they need. A weak economy and green IT initiatives mean that techies are increasingly going to be judged by their data center savings, says David Cappuccio, an analyst at Gartner. An efficient data center design can cut the footprint by 60 percent.
Tiers are being mixed and matched with one data center. Data centers have tiers of availability. Tier 1 is 99.6 percent uptime and Tier 4 is 99.995 percent with Tier 2 and Tier 3 in between. To build a Tier 1 10,000 square-foot facility the cost is $9.94 million. Tier 4 will run you $34.5 million, according to Gartner.
One of the more recent trends is to mix and match tiers within one facility. With this approach, you can segment applications based on the importance to the business.
Everyone has a box for mid-sized and large businesses. IBM, Rackable, Sun, Verari Systems and HP all have trailers (right) that can extend data centers and deploy in 12 to 14 weeks. Cappuccio noted that Microsoft has a large 200-and-more-container deployment at its Chicago data center. Microsoft is also experimenting with wind-powered containers. For mid-sized companies these containers could become an alternative to traditional data centers—slap these boxes on a slab and go.
Pod architecture. Cappuccio noted that previous data center design principles went like this: Build a facility for today, estimate what you’ll need in 20 years, and go. Today, it’s all about pods. With this approach you figure out how much space you need, say 15,000 square feet, and then build out for five to seven years. Then you add pods as you grow. Pods also allow for retrofitting so a data center complex can last 40 to 50 years.
Combine pod architectures with density zones. Cappuccio added that data centers should be designed by density zones. High-density applications (200 watts per square foot) represent 10 percent to 15 percent of a total data center usage. Medium-density apps (150 watts per square foot) account for another 20 percent. The rest is low-density (100 watts per square foot). If you mix and match densities you save money on the build-out. The density zone approach is likely to be used in the majority of new or retrofitted data centers by 2013. Double bonus if you take the pod architecture and use density zones.
The money chart:
Raised floors are passe. Anyone who has been in a traditional data center knows that raised floors, anywhere from 12 to 18 inches to 24 to 48 inches, are the norm. If you design a data center properly you can use a concrete slab for the build out. Building on a slab can be $20 per square foot cheaper than a raised floor.
And once you learn the data center principles all you have to do is evaluate all of these vendor data center visions dancing around. The field: Cisco, Oracle, HP, IBM and VMware. You can toss Dell, Microsoft, Amazon and Google into the mix too. The big takeaways from Gartner’s talk on the vendor data center vision are:
Don’t get locked into anything proprietary;
The tectonic plates between these vendors are still shifting;
Don’t let any one vendor creep to the point where it controls your budget. Data centers aren’t meant to be homogeneous.
That final point is very notable. Most data center players have adjacent products and if you’re not careful your entire enterprise could depend on one big name.
HP CEO Mark Hurd is big on cloud computing, but acknowledges its limits. For instance, HP “wouldn’t put anything material in nature outside the firewall.” The message: The cloud has its place, but there’s a vast difference between private and public computing.
Credit: Larry Dignan
Hurd’s talk, a Q&A with Gartner analysts David Cearley and Donna Scott at the IT Symposium, came amid a weak enterprise technology spending forecast for 2010, the integration of EDS and a scrum over the architecture of the next-generation data center. Hurd chose to stand during the interview and dabbled on a white board to make his points.
The HP chief covered a lot of ground, but his comments on cloud computing were the most interesting. Here’s a guy who was speaking as a CEO running a massive company that happens to sell infrastructure that’ll revolve around cloud computing.
Hurd said he was talking to CEOs about the cloud and representing the tech industry overall. He got jeers. Simply put, the term cloud computing isn’t so clear. CEOs want it broken down into more tools, said Hurd. The disconnect occurs due to business users that don’t quite follow cloud computing and vendors that view the technology as an attractive model.
The company plans to layer cloud services on its infrastructure in the future, but there will be a vast difference between private and public clouds.
“It’s a very attractive model that can drive a lot of innovation into the market,” said Hurd. But there are hurdles. CEOs do question the cloud sometimes and you can add Hurd to that club. For instance, if HP CIO Randy Mott had a big idea and wanted to put general ledger and accounting in the cloud Hurd said he “would send him back to work.”
Hurd clarified that the difference is between internal and external cloud. “We have 1,000 hacks a day and I can’t tell you why, but they keep showing up. We wouldn’t put anything material in nature outside the firewall,” said Hurd.
Data warehousing giant Teradata is outlining its cloud computing strategy including an internal cloud service and a public offering via Amazon Web Services. In addition, Teradata is rolling out an appliance it claims will provide a big performance boost.
The announcements, timed for Teradata’s partner conference in Washington D.C., this week highlight how the stakes are being raised in the data warehousing space. Teradata is battling larger foes like Oracle with its Exadata appliance, HP and smaller players such as Netezza.
Teradata is rolling out a bevy of new initiatives, but the most notable one is its cloud strategy. Teradata has a multi-pronged strategy that includes an internal cloud offering for customers—housed in the vendor’s data center—and a public rollout with Amazon Web Services’ Elastic Compute Cloud (EC2).
Global PC shipments came in at 80.9 million in the third quarter, up 0.5 percent from a year ago, according to Gartner.
OK, a 0.5 percent increase is a bit of a joke in most years, but after the shellacking the tech industry took in late 2008 and early 2009, vendors will take it. Gartner was expecting PC shipments to fall 5.6 percent in the third quarter (statement). Also see:Sam’s take on the IDC figures for the quarter.
Consumers continued to lead growth by gobbling up netbooks and cheap mobile PCs during back-to-school salses. Here’s the worldwide scorecard for the quarter:
And the U.S. picture where Apple, Acer and Toshiba are posting the largest growth gains.
Apple is finally pushing toward double-digit market share with IDC reporting 9.4 percent share in the U.S. for the third quarter - an 11.8 percent jump from the same quarter a year ago - in its quarterly PC Tracker report.
The natural assumption, of course, is that Apple’s gain has been the result of a PC market that has been in a lull as it awaits the release of Microsoft’s Windows 7 later this month. But Loren Loverde of IDC tells CNET that Windows 7 isn’t expected to be a big driver of fourth-quarter growth. Instead, Loverde noted that the growth has already been occurring - ahead of the Windows 7 release - and believes that people are buying systems and plan to upgrade. That may be good news for Windows 7 sales - but hardly a fourth-quarter boost that the PC industry needs.
During its earnings call yesterday, Intel also noted that notebooks seemed to be maintaining their momentum and weren’t necessarily getting beaten by the smaller, less expensive but also less powerful netbooks. Intel execs also said they didn’t expect the release of Windows 7 to have a big impact on the fourth quarter.
But for both Intel and PC makers, growth numbers are relative. Consider that fourth-quarter numbers last year - across many sectors - were in the dumps. Any positive growth this year looks great compared to last year.
IDC had Acer surpassing Dell for the No. 2 spot in U.S. PC shipments, both trailing No. 1 HP, which had 20.2 percent share. Apple was in fourth place with 9.4 percent and Toshiba was in fifth with 8.1 percent.
Gartner also reported PC market share numbers but those were different because Gartner includes x86 servers in its counts and also looks at revenue from vendors.
Dell CEO Michael Dell said that disillusionment with netbooks kicks in after about 36 hours. Assuming Dell’s right, and he may be, does that mean cheap laptops in the $399 range will trump them?
Speaking at the Churchill Club Tuesday night (Techmeme), Dell said that the appeal of netbooks—they are small and light—wears off after a few hours as users want their bigger screens back. I can attest to Dell’s take since I had the exact same reaction and now my daughter has a fine Dell Mini. (Small detour: Sam was on his way to the Churchill Club but got rear ended by a Prius since some folks out West can’t drive in the rain. Given Sam had a pickup so it’s clear who won that collision but it was just enough to keep us from Dell’s talk).
But all the people buying netbooks can’t be completely disillusioned right? Adrian Kingsley-Hughes notes that it’s in Dell’s best interest to trash netbooks at least a little since they hit profit margins. That’s true, but the more interesting issue comes when consumers see full-featured, larger screen notebooks that cost about the same as a netbook. Will you go for the 15.6 inch screen for $399 or the Dell Mini 10 that will run you $349?
I think HP may be on to something with its TouchSmart PC. The new TouchSmarts, which are being unveiled today, are technically computers, complete with mouse and keyboard. (For the specs, check out Andrew Nusca’s post.)
But the heart of the device is the screen, specifically a touch screen display that’s populated with apps that include Netflix and Hulu - and that makes it feel a little less like a computer and more like a TV set.
Stream a Netflix movie or a Hulu sitcom over this screen and suddenly it’s easy to see how close we are to a new age of television, a Web-powered age of television. For years, the PC industry has been talking about bringing the computer into the living room but has never really been able to pull it off.
I’m not saying the TouchSmart is a winner for replacing 50-inch plasma in the living room. But I can see that, through the use of apps, widgets or whatever else we call them, there’s a new experience on the horizon.
The company also highlights the PC as a “digital sign,” the type of screen that could find a home as an interactive touchscreen display - maybe something at the airport that offers travelers information on hotels, car rentals or restaurants or an interactive directory at the shopping mall that not only gives users a route to to the store inside the mall but also an opportunity to learn more about what the store is selling.
In the meantime, I can see this sort of device finding a home in dorm rooms, kitchens and home offices. At $899 and $1,049 for the 20-inch and 23-inch models, respectively, you get both a TV and a PC - which makes it more of a value add.
In the video below, HP’s Mindy Fournier offers a demo of some of the features for the TouchSmarts.
Brocade Communications Systems, which makes networking and storage gear for data centers, has reportedly put itself up for sale and Oracle and HP are among the interested parties.
The fact that HP examining a Brocade purchase isn’t surprising. HP and Cisco are on a collision course and HP CEO Mark Hurd could use Brocade’s portfolio to target more networking hardware (Brocade owns Foundry Networks).
But that fact that Oracle is interested raises a few interested possibilities. Brocade and Sun are partners. If Oracle bought Brocade it would shed any doubt that it was serious about the hardware business. Oracle CEO Larry Ellison has said he wants to provide complete systems, much like T.J. Watson’s IBM did.
While Oracle and HP are interested in Brocade it’s worth pondering IBM’s role too. IBM is also a Brocade partner and may conclude that it needs a hardware play as other vendors notably HP and Cisco are pitching next generation data center architectures. Dell would be another company possibly interested in purchasing Brocade.
Updated: Xerox said Monday it will buy Affiliated Computer Services in a cash and stock deal valued at $6.4 billion. The move is a big bet to transform Xerox into a services company that does everything from collecting tolls and installing government systems to retooling business processes and information technology outsourcing.
Xerox is valuing ACS at $63.11 a share, up from ACS’ closing price of $47.50. The transforms Xerox into a services company that can focus on business process management and outsourcing (statement, Techmeme).
The company, which is in a dogfightwith HP for print managed services, is apparently looking for more foot soldiers to cross sell everything from process overhauls to document management programs. After all, HP can use its EDS army to sell print managed services in addition to other items. ACS had $1 billion in recurring revenue during fiscal 2009.
For Ursula Burns, Xerox CEO, the ACS deal is a defining moment that comes early in her tenure. In a statement, she said:
Hewlett-Packard has given EDS a new name a year after acquiring the company. The new moniker: HP Enterprise Services.
The acquisition has delivered handsome returns to HP as the key hardware businesses were whacked by the recession. HP said the name change comes following a year of integration moves. In a nutshell, HP is signaling with the name change that the EDS integration is complete.
HP’s Technology Solutions Group business will be renamed HP Enterprise Business. That group will include servers, storage, software, networking and technology services.
With all the naming conventions clear, you can expect that HP will go after IBM’s services unit with more fervor.
Dell’s $3.9 billion acquisition of Perot Systems gives the company a better foothold in the IT services market, but it’s really just the beginning. Dell’s purchase of Perot Systems is a down payment on the company’s big plans to transform its business.
As noted earlier (statement, Techmeme), Dell is paying $30 per share for Perot Systems, which is heavily focused in the only two industries growing these days—healthcare and government. Perot and Dell had been long-time partners.
Dell had been talking about diversifying away from its core PC and server businesses for months, but the Perot purchase is the first move that illustrates the company is serious about its transformation.
CEO Michael Dell said on a conference call the Perot purchase is a platform that the company can use to acquire more companies. Dell specifically said it will look for more deals similar to the EqualLogic purchase. Dell also said that Dell and Perot would be able to grow faster combined. “We will leverage Perot’s services capability across Dell’s customer base,” said Dell. “This acquisition makes great sense.”
Indeed, Dell is certainly focused on making sure the Perot integration goes smoothly. Perot CEO Peter Altabef will head a services unit comprised of joint Perot-Dell services units.
HP said Thursday that Marc Andreessen will join its board of directors.
Andreessen, co-founder of Andreessen Horowitz and co-founder and chairman of Ning, will join HP’s board immediately. The total board members will move from 10 to 11.
Andreessen knows HP well since the company bought Opsware from him. Andreessen used to be chairman of Opsware, which now plays a critical role in HP’s software lineup.
Larry Dignan is Editor in Chief of ZDNet and Editorial Director of ZDNet sister site TechRepublic. See his full profile and disclosure of his industry affiliations.
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I have a netbook. It’s small—9 inches—and it now belongs to my daughter. My hands are too big. The screen is too cramped. And I’m inclined to think that Jason’s right. The netbook is just a passing fancy.
Everyone has a box for mid-sized and large businesses. IBM, Rackable, Sun, Verari Systems and HP all have trailers (right) that can extend data centers and deploy in 12 to 14 weeks. Cappuccio noted that Microsoft has a large 200-and-more-container deployment at its Chicago data center. Microsoft is also experimenting with wind-powered containers. For mid-sized companies these containers could become an alternative to traditional data centers—slap these boxes on a slab and go.
more interesting issue comes when consumers see full-featured, larger screen notebooks that cost about the same as a netbook. Will you go for the 15.6 inch screen for $399 or the Dell Mini 10 that will run you $349?
Perot Systems, which is heavily focused in the only two industries growing these days—healthcare and government. Perot and Dell had been long-time partners.
Larry Dignan is Editor in Chief of ZDNet and Editorial Director of ZDNet sister site TechRepublic. See his 
