Hewlett-Packard Company Is Becoming Microsoft's Biggest Enemy
Jan 22nd 2014 10:00AM
Updated Jan 22nd 2014 10:02AM
Forget Apple and Google -- Hewlett-Packard is quickly emerging as the biggest threat to Microsoft . Although the company remains the largest seller of Windows PCs in the US (and the second largest in the world), Hewlett-Packard is increasingly undermining Microsoft's business.
Based on a number of recent initiatives, it is clear that Hewlett-Packard is in the midst of a transition -- from Microsoft's partner to Google's. As the manufacturer many turn to when they need a new PC, Hewlett-Packard is uniquely positioned to devastate Microsoft's business.
Hewlett-Packard pushes Windows 7
Earlier this week, Hewlett-Packard made headlines by "bringing back" Windows 7 "by popular demand." While the promotion is more marketing gimmick than actual policy change -- Hewlett-Packard never stopped selling Windows 7 PCs -- the move is still not good for Microsoft.
On the surface, Hewlett-Packard is inherently siding with Microsoft's critics, tacitly admitting that Windows 8 is a terrible product. But more significant is the long-term consequences the move could have on Microsoft's attempts at transiting to a world centered around mobile computing.
Microsoft needs people to use Windows 8. The sooner they start using it, the sooner they'll come to terms with the major interface revisions (like the removal of the start button), and the more interest developers will have in Microsoft's Windows 8 App store.
The longer people stay with the Windows 7, the more Microsoft's operating system will remain dependent on traditional PCs. If Windows is going to have any place in the world of mobile computing, Windows 8 needs to become ubiquitous and familiar.
Going after Windows Phone in emerging markets
Then, there's Microsoft's attempt at bringing Windows to smartphones. When Microsoft announced that it was acquiring Nokia's handset business, it argued that the success of Windows Phone would boost PC sales -- that users of Windows Phone would naturally choose PCs running Microsoft's Windows.
Evidently, Hewlett-Packard doesn't buy that logic. Or if they do, they don't plan on selling many Windows-powered PCs for much longer. When the company unveiled its two smartphones earlier this month, it could've used Windows Phone to power them -- but it didn't. Instead, it chose Google's Android.
Hewlett-Packard's decision is all the more noteworthy given the market Hewlett-Packard is competing in -- India, one of the only countries where Windows Phone is popular. Nokia's (soon to be Microsoft's) Lumia 520 was a major success in India, helping Microsoft's Windows Phone become the second-most popular mobile operating system. Launching a Windows Phone-powered device in India could've helped the operating system to grow further -- instead, Hewlett-Packard backed Google.
Chromebooks and an Android-powered desktop
Hewlett-Packard's support of Google isn't limited to smartphones. The company embraced Google's Chrome OS with both hands last year, releasing three different Chromebook models in 2013.
More recently, at the Consumer Electronics Show earlier this month, Hewlett-Packard unveiled a radical new desktop PC. Instead of using Microsoft's Windows, Hewlett-Packard's new 21-inch, all-in-one PC is powered by Google's Android.
Obviously, Google's operating systems are a threat to Microsoft's Windows, as any consumer that buys Hewlett-Packard's Android desktop or one of its Chromebooks is probably substituting it for a Windows machine. But it isn't limited to lost Windows revenue -- as Microsoft has not released a full version of Office for Android, and its cloud-based version of Office remains limited, Chromebooks and Android-powered PCs weigh on Microsoft Office as well.
From ally to competitor
Last fall, Hewlett-Packard's CEO Meg Whitman labeled Microsoft a "competitor" -- the company is living up to that label.
As users increasingly flock to mobile devices, Microsoft needs Windows 8 and Windows Phone to be successful -- otherwise it's operating system business could fade into irrelevancy. Moreover, as it has stubbornly refused to release full versions of Office for other operating systems, fewer Windows users results in fewer Office customers.
Rather than support its longtime partner in this transition, Hewlett-Packard is increasingly working to block Microsoft's progress -- pushing Google's operating systems over Microsoft's, and limiting Windows 8 adoption.
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The article Hewlett-Packard Company Is Becoming Microsoft's Biggest Enemy originally appeared on Fool.com.Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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