Hewlett Packard (HPQ) Generates Confidence with Cloud Strategy

Hewlett Packard's (NYSE:HPQ) CEO Leo Apotheker in his media event Monday generated some confidence in his strategy to get the company growing again, especially with his cloud computing strategy.

"In his first major public speech since being named to the top HP spot in September, gave his answer to a gathering of press and analysts in San Francisco Monday afternoon. During a presentation that lasted a bit over 30 minutes, Apotheker outlined three major areas of focus for HP in the coming months and years: Cloud computing, a wide variety of Internet-connected hardware for consumers and businesses alike, and software, including pushing HP's (formerly Palm) webOS to hundreds of millions of PCs, tablets, printers and smartphones. The financial upside of this three-pronged strategy, according to HP CFO Cathie Lesjak, will be $7 per share in earnings (non-GAAP) by 2014.

The early word in the hallway filled with financial analysts was mostly good. What drew most of the attention was the public cloud Apotheker announced. With his cloud strategy Apotheker is steering the company away from direct competition at the high-end from the likes of IBM (IBM) and Oracle (ORCL), towards serving large companies and governments customers with less mission critical applications, and small and medium businesses all over the world with just about everything. "It's smart," says Cowen & Co. analyst Peter Goldmacher, "The growth at the top is finite, it's single digits, and that game is over. HP is going where the growth is."

HP was trading at $40.73, down $0.76, or 1.83 percent, as of 1:32 PM EDT.




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