HP Moves Towards Becoming Your One-Stop Tech and Telecom Solution: 9,000 Jobs Cut Along the Way

by Jeff Wiener on June 3, 2010

When news breaks of some minor acquisition by one of the larger technology or telecommunications companies it barely makes news anymore. But what few see is that with these minor acquisitions and other such moves, several of the larger companies are quietly working towards becoming one-stop shops for all your personal or corporate IT and telecommunications needs.

With that in mind, from a strictly technological news standpoint, the report that Hewlett-Packard (HP) is laying off 9,000 jobs is barely noteworthy, as large companies frequently reshuffle the deck, especially those routinely acquiring and incorporating other companies into the fold. But what is interesting about this story is that buried beneath the headline is evidence of HP’s grand scheme to master both the IT and telecom sectors, and if they pull it off, HP may well in fact become one of the world’s most powerful technology companies.

I was surprised that with HP’s well-publicized acquisition of Palm just over a month ago that there were so few others in the tech or telecom sectors who recognized the sheer brilliance of the purchase on HP’s part. With that purchase, HP set itself up as one of the only companies that dominates both ends of the telecom market, as it now controls its own mobile division, complete with one of the market’s best mobile operating systems, and, with its purchase of 3Com last year, acquired the means to compete with the likes of Cisco and Avaya in the enterprise voice market as well.

The interesting thing about this most recent story is not the mass layoffs, although I do always regret the negative effect on those individual employees impacted by such necessary restructuring, but that HP has finally entered the last phase of integration of Electronic Data Systems (EDS), a company it acquired back in 2008. While this news is evidence of just how long it takes a company like HP to fully integrate new technological acquisitions—meaning don’t hold your breath if you were hoping HP would quickly integrate Palm’s webOS into anything new in the near future—it is also evidence of HP’s increasing technological dominance.

The reason for the layoffs, it turns out, is that HP is freeing up capital to reinvest in its next generation Enterprise service business, which will include fully automated data centers and enhanced IT support for businesses the world over.  

As a one-stop shop for your corporate tech and telecom needs, HP will now be able to competitively challenge IBM in the IT and data center markets, compete with Cisco and Avaya in the enterprise voice market, and rival with the likes Google, Apple, and others in the mobile market. While there are other companies competing with HP in each sector, as Dell and Xerox are improving their IT department and as innumerable mobile companies rise and fall, there are simply no other companies that I can think of that can boast the same sort of end-to-end, all-encompassing, (soon-to-be) fully integrated technology and telecommunications experience that Hewlett-Packard has built for itself over these past few years.

While it’s clear that HP can put the pieces together, it remains to be seen, however, if they know what to do with them. Although I sincerely doubt HP will dominate any one market, if they are able to provide competitive technological devices, service, and support, they may very well become one of the strongest tech companies in the world.

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Written by: Jeff Wiener. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Identi.ca, or Friendfeed

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