Wow. This one's gonna be taught as a B-school case for decades to come. The question is whether it's going to be taught as a cautionary tale for future CEOs or as a role model of what to do once the s*it hits the fan.
Let's separate out the four parts of the story. First, there's the story of Palm and webOS. Then there's the story of the orphaned users of TouchPads and those silly phones. Then there's the whole earnings bit. And, finally, there's the buy (for a whopping 10x valuation) of some random enterprise software company.
My history with Palm goes way back. I was PalmPower's editor-in-chief back in the 1990s and worked closely with them until, well, they started to stray from sanity.
But I'm not here to talk about Palm today. I'm here to talk about HP's breathtaking moves -- and try to decide if they were moronic or ballsy.
I've thought about this all night. I've thought about the announcement that the number one PC vendor is dumping its PC business. I've thought about how people who shelled out more than $500 on TouchPads are basically being screwed.
I've thought about what you do when faced with a big-ass failure and you still have a company to run.
HP could have stuck with the TouchPad and refined it, like Microsoft often does with their products. Microsoft is famous for first releases sucking, but by the third or fourth release, the product is unstoppable. HP could have done that.
But HP is competing with Apple in this space and -- face it -- HP is not going to win. Apple has a lock on the hearts and minds of consumers and while HP might generate some price/performance respect, it'll never generate the level of infatuated love that Apple does. In a consumer market, lust not only sells, it wins.
So, what do you do? What. Do. You. Do?
I've often talked of the business necessity of ruthless prioritization. That leaders need to put the ship first, meaning that the enterprise as a whole must remain standing for any division, operation, product, or employee to be relevant.
Apotheker, standing on the bridge of the U.S.S. Hewlett-Packard, saw an iceberg ahead. The PC market is transforming at an epic rate, to one that's less PC and more, well, Apple. HP's tablet and phone offerings were essentially imploding under his feet.
On the other hand, the good ship HP is a strong vessel. It's got an amazing array of enterprise and data center offerings that are best-of-breed. It's got an enormous services business, and many of the world's most important enterprises run on top of HP gear.
So, he had a choice. Keep the ship pointed at that consumer iceberg or veer (heh!) suddenly away. He had the choice of shaking up his passengers something awful for a few seconds, or possibly killing them all by crashing into the 'berg.
He chose to turn that ship away from the iceberg. He shook up the passengers, broke some of the precious china as it fell off the shelves, and probably scared the bejesus out of his stockholders.
It was a smart move. It was, sadly enough, the obvious and only move.
It was a ballsy move.