By John Shinal
Hewlett-Packard CEO Leo Apotheker's new strategy will likely result in new job opportunities for software engineers inside and outside the tech giant as his plans to build a cloud computing platform and launch an applications marketplace will require significant software development.
In his first presentation to investors, press and analysts since being hired in September, Apotheker said that the company planned to enhance its applications and operating systems for businesses and consumers.
Making the shift will present challenges to H-P, which has traditionally been known for its hardware such as PCs, laptops, printers and servers. If the company executes properly, it could drive increased sales in higher-margin markets for software and consulting services, one analyst said.
"It won't be easy, but if he has the resources, they're capable of pulling it off," said Tim Bajarin, president of the technology research consulting firm Creative Strategies, based in Campbell, Calif. "He's talking about a major software undertaking."
Rather than rely solely on long-time partner Microsoft's Windows operating system, Apotheker said H-P will develop the Web OS system it acquired with Palm Computing for $1 billion in cash last year into a unified platform that will run all H-P devices connected to the Internet.
Betting on Palm's Web OS
"Web OS is an unbelievably attractive technology for seamless connectivity... an outstanding Web operating system. We will be shipping it on dedicated devices, including smartphones and tablets," Apotheker said.
H-P will ship a tablet computer running a new version of mobile Web OS in June and "will have the next version of desktop Web OS at the end of the year."
However, the software will work alongside Microsoft's Windows, not replace it, Apotheker said.
"Just to be clear: Microsoft is a great partner and will remain a great partner," he said.
While that partnership could become strained if Hewlett-Packard moves to raise the profile of Web OS by spending on marketing, Apotheker "could pull it off," said Bajarin, of Creative Strategies.
Apotheker declined to say many workers might be hired or enlisted by H-P as part of the shift to software, or in what countries or business units they would be added.
"We're here to talk strategy," Apotheker said during a question-and-answer session after his presentation in downtown San Francisco.
A Crowd in the Cloud
The company plans to enter the crowded market to provide cloud computing services, where rivals such as Amazon.com and Salesforce.com already offer the types of services Apotheker said H-P planned to roll out.
Related: Cloud computing has arrived
"H-P intends to build and operate an H-P cloud. We are moving toward software as a service," he said.
Much of the coming software development will be for programs and architecture that sit between applications and the underlying operating systems that run them.
"If you want to be in the cloud business, you have to be in the infrastructure business. I can't stress enough (H-P's commitment to) platform-as-a-service, what used to be called middleware," he said.
The company plans to invest faster than its rate of revenue growth in the hope that greater sales of software and services will boost profit margins in the future.
"Will H-P have a larger software business? The answer is 'yes,'" said chief financial officer Catherine Lesjak, who spoke after Apotheker. "But we are focused on next-generation technology. We don't want to invest in the old (software) stack," Lesjak said.
As part of its cloud offering, H-P will operate an applications marketplace that will offer its own software and those of outside developers, Apotheker said.
"It will be a cloud marketplace open to third parties; it will have a combination of our software and services and those from our trusted partners," Apotheker said.
In what may have been a dig at Apple, which has been criticized by some developers for what they say is an opaque and arbitrary app approval process, Apotheker said it will screen the applications in its app marketplace only for interoperability and security concerns.
"This will be an open marketplace for developers," he said.
Write to John Shinal