I loved WebOS.

When former HP CEO Mark Hurd bought Palm’s mobile operating system in 2010, I thought that the company had struck gold. Everything about HP and WebOS was dreamy. WebOS was one of four mobile platforms in the marketplace, but with HP’s business model WebOS was a legitimate contender.

HP’s advantage was that it could potentially install its WebOS platform in everything it made – inkjet & laser printers, desktop & notebook PCs, monitors, scanners, tablets, and smartphones. Through its wide swath of products, HP could quickly grow its WebOS installation base to tens of millions of users that touched both the living room and the board room. WebOS had the potential to be a single platform that spanned both the consumer and enterprise markets, linking our home and work in powerful ways.
Oh man….it would have been awesome.

But nothing ever happened with WebOS. In 2012, HP decided to put the operating system “out to pasture” and today LG owns the WebOS technology that powers the company’s SmartTV” platforms currently sold in stores.

Well before Mark Hurd purchased Palm and WebOS in 2010, HP’s long term vision was to evolve beyond the PC and printer business and eventually become a global power in IT infrastructure consulting. Who could blame HP’s leadership? Companies like IBM and Oracle were cruising through the blue ocean of Enterprise Services and making billions along the way.

In 2002, HP started purchasing consulting and software companies with the fervor of a start-up with a limitless credit card:

  • Peregrine Systems for $425 million in 2005.
  • Mercury Interactive for $4.5 billion in 2006.
  • Electric Data Systems for $13.9 billion in 2008.
  • 3Com for $2.7 billion in 2010.
  • 3Par for $2.35 billion in 2010.
  • ArcSight for $1.5 billion in 2010.
  • Autonomy for $11 billion in 2011.

Listed above are $36.5 billion in acquisitions and represent just a handful of the companies HP acquired within the last decade to bolster its Enterprise Services business, all of which were paid for by ink and toner profits the company had stockpiled during the previous 30 years. If HP’s Enterprise Services effort was a start-up, then the company’s printing business was the angel investor.

And therein lies the rub, HP’s overall strategy was to grow its printing business and use those profits to expand the company’s Enterprise Services business. HP’s two pronged strategic plan was simply not sustainable. It has been proven time and again that no company can succeed with multiple visions and strategic initiatives. IBM admitted as much when it sold its PC business to Lenovo. Concurrently, HP’s PC and printer business could not sustain its position as leader in its respective industries without extremely healthy R&D and sales budgets. Ultimately, HP’s Enterprise Services business grew at the sacrifice of the company’s PC and printing business.

HP should have split up 10 years ago.

Last week, HP CEO, Meg Whitman, announced that the company will cut itself in two. HP’s Enterprise Services business, poised to duke it out with IBM and Oracle, is now called “HP Enterprise”. The remaining $60 billion PC and printer business will continue to carry the original “HP” corporate name.

The split comes as no surprise and is long overdue. For observers such as myself, it will be interesting to see how HP Enterprise will survive without the endless backing of ink and toner dollars to support it. Similarly, I am equally intrigued to see what will become of the new/old HP, now that it has a fresh supply of R&D dollars to “re-Invent” itself.

With absolutely zero evidence to support my theory, I believe that HP Enterprise is for sale. During her announcement, Meg Whitman, indicated that she will remain CEO of HP Enterprise, while Dion Weisler will assume the helm at the plain ‘ole HP, which is a curious move. When Whitman took on the role of HP’s CEO, her biggest critics pointed out her clear lack of experience and acumen in the enterprise market. Meg’s background is selling to Joe Consumer through her time at eBay and her run for California’s Governor. Why would Meg, who clearly has strengths in the consumer market, insist on staying on as CEO of HP Enterprise? My thought: that’s where payout will be. Meg will get paid handsomely at the time of sale and ride off into the retirement sunset.

For plain ‘ole HP, last week’s split is a wonderful opportunity to re-Invent itself (again). It’s a chance for HP to return to its engineering roots, which were driven by the backyard garage, entrepreneurial spirt of Bill Hewlett and David Packard. Refreshed with R&D funds and re-invigorated by its new CEO, the “re-Invented” HP could return to its former glory as the industry’s original innovator.

And that’s what HP’s new CEO, Dion Weisler, has to do – find the old HP. So far, Mr. Weisler has promised to protect HP’s R&D budgets and restore relations with channel partners both new and old.

An avid ocean goer, Mr. Weisler used a surfing analogy in a recent interview with analysts.
“When I look at the ocean, I think about it as a dynamic environment. Waves are always rolling by.” Mr. Weisler said.

Mr. Weisler then described rows of surfers; the first two rows catching the easy waves to ride on the inside, but the third row of surfers sitting outside the breakers and staring deep at the horizon.

“The really astute ones are looking out for Big Wednesday — that massive wave,” he said. “When you think of the business in this way, you can think about how you can play for today and also the future.”

And that’s where HP is today: sitting on the outside and waiting for the waves to come in. Meg Whitman will ride the money wave to retirement. Dion Weisler hopes to catch a wave out of HP’s Garage with an ocean of ink money to hold him up.

I just can’t help but think that WebOS was a “Big Wednesday” moment.

What if HP had spent a fourth of that $36.5 billion to catch it……