Hewlett-Packard doesn’t need your money

August 19, 2011

Hewlett-Packards CEO Leo Apotheker made the surprising announcement, that the company wants to get rid of the personal computer business, stops the development of WebOS devices and buys Autonomy, a British software maker, for 10 billion US$.

The takeover of Autonomy makes sense, because HP wants to offer more special services and cloud computing to corporate and government customers. Autonomy makes software that searches and keeps track of corporate and government data, BP, Ford Motor and the US Defense Department are among its customers.

HP and Palm phones like Veer and Pre as well as the new HP TouchPad will be discontinued. HP just dramatically slashed the price of its tablet, but the TouchPad was not well received and did sell poorly despite the price reduction; it was never a serious competitor to Apples iPad.

HP will not make PC’s anymore, could you ever have imagined?

Don’t be surprised, Hewlett-Packard doesn’t need your money, because the Pentagon pays so much better. In 2010 Hewlett-Packard was the sixth biggest defense contractor in Silicon Valley, with 28 contracts worth $69.9 million.

HP provides for instance the software for the F-35 Joint Strike Fighter. In June 2010 HP won a US Air Force contract for a Cyber Control System (CCS) designed to identify and respond to cyber threats. The 12-month government contract calls for HP (NYSE: HPQ) to implement the CCS for what the company said is a key part of the Air Force’s cyber warfare strategy. In July this year HP renewed an IT support contract with the U.S. Navy, adding another three years of support services for as much as $3 billion in cash (the Navy network is among the largest IT installations anywhere and this is serious cash even for a giant like HP).


Who needs to sell crappy PC’s or smart phones, when the surveillance and data mining business is just taking off in a big way and the prospect of cyber warfare opens new business opportunities. Supplying one Big Brother will be for sure more profitable and easier than the cumbersome business with the little brothers and sisters could ever be.


Top military contractors in Silicon Valley in 2010:

Lockheed Martin, 277 contracts worth $3.6 billion.
BAE Systems, 218 contracts worth $610.6 million.
Northrop Grumman Marine Systems, 227 contracts worth $159.8 million.
SRI International, 203 contracts worth $140.3 million.
Granite Construction, 47 contracts worth $111.8 million.
Hewlett-Packard, 28 contracts worth $69.9 million.
Vision Systems International, 173 contracts worth $49.1 million.
Oracle Corp. 266 contracts worth $40 million.
Fresh Express, 8 contracts worth $34.6 million.
Communications & Power Industries, 57 contracts worth $29.7 million.

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