Has HP Become a Turkey Vulture?

Roland is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Quite possibly the best NCIS quote ever:

“That’s what they call a turkey vulture. 20 years past a cougar, likes to hunt, but too old to take down the prey.” -- DiNozzo

In a way, it is a fitting description of Hewlett-Packard (NYSE: HPQ). No matter what they purchase and try to kill off to promote their own less than mediocre stuff, it keeps coming back to life. In 2002 HP purchased Compaq and instantly set about trying to kill off OpenVMS in order to promote what many (myself included) view as an industry laughing stock HP-UX.

Despite HP’s best efforts, having sales and marketing telling all of the third party software suppliers that HP-UX was the strategic future of the company, getting major names like Cerner (NASDAQ: CERN) to stop OpenVMS development, the platform keeps gaining ground. While many in the U.S. have been brain washed by marketing to believe it doesn’t exist anymore, it has become the platform for successful businesses in China.

In 2006 the Shanghai Stock Exchange was struggling to be ranked within the top 10 stock exchanges globally.  That same year they announced they were throwing out HP-UX lock stock and two smoking barrels to replace it with modern OpenVMS. As of 2011, not only are they running on OpenVMS, they now rank 5th in the world with an awful lot of talk about when, not if, but when they will reach number 1. To be fair, some ranking systems place them 7th based on dollar value of shares traded.

It should be noted that Cerner’s OpenVMS customers didn’t in large part abandoned HP completely. They lost hardware, support, and software sales at thousands of hospitals when they made Cerner drop the platform. Most of these former customers are now running AIX, not HP-UX, for obvious reasons. But hey, this is the management team which spends more time doing things that get it drug before Congress than it does actually running the company.

Another product HP attempted to kill off was Palm.  Not long after buying the company they announced they were no longer going to make hand-held PDA type devices and no longer work on the operating system. Just like OpenVMS, Palm refuses to die. Its first rebirth was the NEO targeted at writers. Its second birth was the NEO2 aimed not only at writers, but the K-12 education market. With a sub $200 price tag and up to seven days of battery life from three AAA batteries, it has settled into a sweet little niche.  Durable enough for very young students to learn keyboarding skills and absolutely no chance of connecting to the Internet which could expose young children to danger, NEO2 has found a niche. Many tutoring and classroom plug-ins exist and many more seem to be in the works. Not only can it teach reading and writing, but there are many math and flashcard type plug-ins so each unit can be customized to each child’s learning needs.

You have been reading about electronic textbooks for years.  It’s a no brainer to purchase laptops and electronic textbooks for high school kids which are already surfing the Web, but for K-12, it is a different story. The NEO2 fills that niche and has existing eBook reader functionality without any chance of the students loading a virus or being endangered by the Web. We are now at a stage where school systems could purchase one of these for each Kindergarten student and update it each year. Printed textbooks range in price from $30-$120 and get damaged in the rain. Many eBook texts can be purchased for around $10/student. If a state chooses to license copies for every student in its school system with the stroke of a pen, it can get an even sweeter deal.

Of course, as the students get older, many won’t want a laptop, they will want a Palm with a full keyboard. Gee, there happens to be one of those too.

One cannot witness stuff like this without thinking that HP’s board of directors never saw the original “Nightmare on Elm Street.”

One two Freddy’s come for you

Three four better lock the door ...

Roland Hughes is the President of Logikal Solutions and author of many titles.  He does not knowningly own a position in any of the companies mentioned.


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