From Innovation to Irrelevance: How HP Lost Their Way

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HP was once known as the father of Silicon Valley having been one of the first companies to have been started in the area, but today, HP is very much on their last legs. In fact, the company has chosen to split into two entities to better focus on their various sectors, but despite this, both sectors have a non-negligible probability of bankruptcy. HP Inc has a bankruptcy probability of 38% while HP Enterprise has a bankruptcy probability of 44%. But, how did such a giant fall so fast? Well, much of HP’s fall has to do with the commoditization of PCs. People don’t place much emphasis on the brand of the laptop or desktop that they purchase unless it's from Apple. When it comes to Dell, HP, Asus, Acer, and Lenovo, however, people are usually just looking for the best performance or best value. And given that electronics margins have been driven down to the ground by overseas companies, HP has had a tough time standing out in either of these sectors. This video explains the rise and downfall of HP and how HP fell towards irrelevance.

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Timestamps:
0:00 - The State Of HP
2:49 - Hewlett & Packard
6:36 - Silicon Valley Giant
10:28 - The Brutal Fall
13:08 - HP’s Biggest Blunder

Resources:

Disclaimer:
This video is not a solicitation or personal financial advice. All investing involves risk. Please do your own research.

[TheDataScienceChannel]

My first computer was an HP. It's really disappointing to see what happened to them. I still remember the time when everyone considered HP computers to be some of the most well designed machines available on the market

[RynardMooreVstar]

If anything it was Carly Fiorina who is ultimately responsible for HP's downfall. Fiorina had all the key components -- particularly in the form of DEC to make HP a company that could have revolutionized computing. Instead Fiorina both squandered that opportunity and those resources because of her shear stupidity and incompetence.

[brucemcintyre]

Back in 1970, I was in a computer club meeting at HP headquarters in Palo Alto, and Bill Packard happened to walk into the meeting. The key message from Bill during his time was a response to a question, "Why does HP invest in so many startups of ex-employees?" The response was "If your company is not the one that innovates and replaces your company products, then someone else will eat your lunch."

[Call-me-James]

The biggest problem for HP was that they had CEOs who didn't really understand technology. Carly Fiorina, Mark Hurd, and Leo Apotheker didn't understand the culture of engineering, and they didn't understand what they were buying when they made acquisitions. These idiots thought they could understand a company by looking at financial statements and spreadsheets, instead of looking at the engineering. It is a hopeful sign that the new CEO, Enrique Lores, has a degree in electrical engineering.

[ffrige]

The founding fathers, being Bill Hewlett and Dave Packard, weren't passionate about computers and printers. They weren't passionate about the life sciences, diagnostics, and applied chemical markets. They were passionate about engineering and building solid, high end test equipment. The souls of these two wonderful individuals live on through Keysight Technologies.

[nandi]

HP's fate was sealed once they put a non-engineer in charge. I remember seeing Carly Fiorina dancing on stage at a company meeting. I sold all of my stock the next day.

[ivanmaglica]

A big portion of HP was left out. They acquired Compaq and with it huge consumer and especially server portfolio. Remember, Compaq were the predecessors of HP rack servers. They also acquired Alpha CPU architecture and ventured into Itanium, which turned out to be a money black hole.

[ramaswamyadisesh]

I used to work for HP. Like the article says, they were known for innovation and highest quality products. They were also known for integrity and HP culture and philosophy. It was a great company to work for. Customer satisfaction was a focus. Then came Carly Fiona, et al and it went down the drain. Buying Compaq was the biggest mistake. Only person benefiting from that was Carly. Instead of innovation, they would buy a startup and peddle that for few days until that became obsolete and buy another and peddle it for few days... you get the picture. Their theory was that the startups could invent products much cheaper than what HP could do with their overhead of a large corporation. But then there was not a clear path as they do not know what product they would acquire next and how they all fit together. I just bought a laptop from HP, and needed customer support. I would never buy another HP laptop. I worked at Roseville and Cupertino locations. I never could never imagine a day when HP would have to sell the Cupertino location just to make ends meet! It sure happened some years ago. They also sold several buildings or demolished few to cut costs at Roseville. Talk about going from Riches to Rags.

[daveayerstdavies]

The downfall of HP started with the appointment of Carly Fiorina as CEO in 1999. She sold off the analytical instruments part of the business and turned HP into "just another PC manufacturer" with the acquisition of Compaq. It was pretty much downhill for the next 20 years.

[JessSimpson]

I worked at HP from 2009 to 2012. In that time I was given 4x role changes from l1 support to l2, then l3, then sustaining. This wasn't cause I was some amazing tech, but because I was the only one who hadn't been on those teams for 5+ years and was applying for the higher roles. Sadly in 2012 they layed off the entire support department I worked for so they could hire cheaper engineers in Georgia. As I was moved to engineering I was kept onboard but wasn't going to stick around knowing what they do to employees so I left for a customer who wanted to bring me in house. This is their doenfall, they shoot themselves in the foot to save a few dollars over and over again.

[lmanstl]

HPE is still one of the largest server hardware manufacturers today. Usually set in 1st or 2nd with Dell. While they don’t have the software (with the massive margins that come with it) that Dell does with VMWare, they are still major player in the server world.

[dorbie]

This is what happens to every tech innovation company when you put a bean counter with no vision in charge.

[jarvisfamily]

When I graduated from high school my big purchase going off to college was an HP programmable calculator. TI calculators were more popular, but HP said "quality" like nothing else. In college I helped with the installation and operation of an HP-3000 minicomputer. When I graduated from college and was heading off to the Navy to work off my ROTC obligation my very first paycheck was used to buy an HP-41C. (Yeah, I'm old... :-). Once upon a time, HP was viewed as a producer of high-quality top-end products that commanded a price premium in the market. Nowadays, they're a producer of commodity products that are very much the same as everyone else's. How the mighty have fallen...

[richardf]

Worked for hp from 2000-2010. Sad to see where it is today. The culture back then was lost with rounds and rounds of layoffs. As a supervisors, I was coached as to when to do the layoffs so the savings would show up in the following quarters earning report. Hp should be a case study of what not to do.

[hanro]

Their printers and ink are overpriced and hostile to consumers.

Furthermore, the laptops they offer towards general consumers have weak hinges in my experience.

Edit: to clarify, I am talking about modern HP machines. Their enterprise grade equipment tends to be solid in comparison as well.

[amptechron]

Their former test equipment division (now renamed Keysight) still makes the best oscilloscopes and other test gear available. I still use an HP audio analyzer and a Keysight 'scope everyday.

[dr.elvis.h.christ]

The destruction of HP can be summed up in two words: Carli Fiorina.

[PO-nbqc]

I worked in HP decade ago. It was a good company. The food in the cafe was very good!

[monolith]

I rode the HP employment train. I started at HP in 1998, went to the Agilent spinoff for a few years, came back to HP, they did he HPE thing and I did the DXC dance before leaving for better opportunities. Back in 1999-2000, that was the place to work...I had so much fun and when I travelled (field engineer), I felt like I was a king. In hindsight it was extravagant but I loved my job back then.

[harshranjan]

Ironically, I am watching this on my HP laptop