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Neutral Buoyancy Alert?

August 24, 2011

What do you think?  Are these examples of companies losing their Neutral Buoyancy?

Just a few days ago, HP announced that it was spinning off its PC and Tablet business, and acquiring a software company, Autonomy for a massive $10.3 billion.  And a few days before that,  Google announced that it was acquiring Motorola Mobility for $12.5 billion … in cash.  And Cisco?  Well, Cisco is rapidly jettisoning its consumer forays .. starting with its Flip Camera division, and more recently, its Scientific Atlanta division that it had acquired for a huge $6.9 billion late in 2005.

What do you think? Send in your comments!

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4 Comments leave one →
  1. Viswanathan permalink
    August 24, 2011 8:31 am

    HP was planning to create its own ecosystem around the webOS when they bought Palm. Now nothing ! I couldn’t understand what was going on at HP?

    • guhesh permalink*
      August 24, 2011 11:41 am

      So what do you think, Vish? Are they losing neutral buoyancy?

  2. Viswanathan permalink
    September 8, 2011 10:12 am

    Ofcourse neutral buoyancy alert 🙂 !! Especially because they didn’t give it any time. it looks like a newbie thrashing in water :I . Come to think of it, when I read about HP’s intentions with webOS, it didn’t sound very exciting. What were they changing? What problem were they solving? Any sutra for this ? 😉 ( I will never dive without a check??)

    And isn’t this like the second time that HP is ditching a mobile computing business ?

    Similar storm brewing at RIM. I read that one of their key investor is worried that RIM is putting all its eggs in to one basket (a new series of QNX powered phones / tablets). Definitely loved RIM’s new tablet design and user experience over some competitors like Samsung (Apple not even considered in the picture). BUT, I Can’t find the sweet spot in RIM’s product offering. Apple – good design, Samsung – cheap, RIM – Enterprise systems?

  3. guhesh permalink*
    September 8, 2011 2:57 pm

    The critical piece for all companies … and this is far more complicated than what I make it out to be … is to figure out its own expertise. And yes, that means the expertise of its people. Are the heavy-weights in your organization tuned to a particular industry or domain (for example, Hardware .. PCs, Printers etc and less on the software services side)? Then you’ve got to know that to switch (or invest in) a radically different domain will cause tremors all across the company.

    In HP’s case, I think the move is a good one: they have experience in the services business, and IBM has done it successfully before, so it can be done. But the difference between HP and IBM is that in IBM’s case, it had a buyer in hand (Lenovo) well before it announced its move to exit the hardware business (atleast partially). In HP’s case? They didn’t have a buyer in place … and from what I read, they still don’t. Enough to rock the boat, don’t you agree? Classic case of the First Sutra: I will never dive without a check.

    In Google’s case … well, every company is trying hard to get into the next generation of computing devices: truly mobile devices. That includes a totally new category (from the past three years) such as touch-driven tablets, and yes, phones. But to actually acquire a hardware company to do this? Google has little or no experience with hardware businesses … a brutal market. My feeling is that this is one of the things that Google will regret sometime down the line: I could be wrong if there is stuff I haven’t got full information on the reasons for this acquisition. A case for losing neutral buoyancy.

    And Cisco … they’ve been following a policy of acquiring revenues to boost stock prices for quite some time … classic case of ignoring their neutral buoyancy.

    RIM .. RIM is in trouble. They forgot the triggerfish (Android .. and earlier: iOS) and today these two have become their biggest nemesis. Their reaction to throw all their weight behind one platform … the equivalent of trying to maintain neutral buoyancy … is interesting. But it just might be a case of too little, too late: they forgot their 50 bar limit: and they should have remembered this. Al Ries and Jack Trout have said this earlier again and again: Strong competitive moves must always be blocked!

    What do you think?

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