CEO Meg Whitman told HP shareholders today that the company is a hardware company and proud of it. It isn’t trying to transform into a software company.”Our infrastructure business — PCs, printers, storage, networking is 70% of revenue of HP. We’re proud of it,” she said. “We’re in the software business, but we’re not in the software business to expand HP into a software company. Software differentiates and adds value to our customers and our infrastructure.”
That’s a break from the strategy that was pursued by her predecessor when she was merely a board member — to get out of low-margin hardware businesses and grow a higher-margin software business.
She defended the new-old strategy by pointing out that even though HP’s PC business has a slim 5-6% operating margin, margins on its servers, networking and printer products are “in excess of 20%.”