HP, Nokia, SAP Face The FutureHP, Nokia, SAP Face The Future

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For a moment, anyway, all felt right in the world as the week and, largely, the month started coming to a close. The Dow was up, if briefly; Europe had a debt plan, more or less; and we know nearly every tidbit of Steve Jobs' life . . . 800 pages worth. If that wasn't enough, HP decided it was still in the PC business, Nokia began its plan to be a dominant force again in the mobile smartphone market, and SAP boasted another quarter of stellar performance.

What's next, Rick Perry playing Bob Dylan songs on an Ocarina iPad app for the crowd in Zuccotti Park?

HP's decision wasn't much of a surprise, and a good, quick, decisive first step by the company's new CEO Meg Whitman, who many have criticized for her lack of experience running a company whose customers are largely enterprise IT buyers; information reader AdamS1 commented with acidity about the HP CEO's moxy: "Meg Whitman doesn't know enough about what HP's competitors do to talk trash."

information's Tom Claburn summarized HP's announcement to keep its PSG division on Thursday thusly: "In a conference call held to elaborate on the decision, CFO Cathie Lesjak estimated that the cost of spinning off PSG would amount to a one-time charge of $1.5 billion and diminish operating profit by $1 billion annually. She explained that HP gains significant supply chain and procurement leverage by being one of the largest purchasers of PC components. The company's scale helps its margins, she said."

A start, to be sure, but there's plenty more for Whitman to do. As I recently wrote in HP's Whitman or Leo: It's The Strategy, Stupid, "HP needs to shore up customer sentiment for the company's core business: Hardware and software infrastructure. It needs to make a very quick decision on its PC business, preferably to keep it as is. It needs to clarify its services business and outline a game-plan for its cloud ambitions, including what it will deliver, and when."

Nokia's challenge is both more simplistic and more difficult to achieve: It needs to become relevant again. By teaming up with Microsoft, it made a big bet and the next few quarters will demonstrate the payoff. Windows Phone 7 is just getting its legs and the most recent version (7.5 or Mango) has been well received, and rightly so. But Nokia must battle the new dominant hardware manufacturers, HTC and Samsung. Both make Windows Phone 7 and Android phones, and both enjoy favor with U.S. carriers.

As information's Eric Zeman points out in How Nokia Must Fight Back In U.S., "For years, Nokia insisted on making phones the way it wanted to and was not willing meet operator requests. ... In the past, Nokia has modified phones primarily targeted at Asian and European markets to work in the United States rather than design new phones specifically for the United States."

Specifically Zeman calls out features like user-facing cameras, video chat, expandable memory, and support for 4G and mobile hotspots, not to mention bigger high definition screens. The Lumia 800 and 710 phones Nokia CEO Stephen Elop rolled out earlier this week (available only in Europe and Asia initially) were missing most of these features. But Elop also said Nokia will be tailoring phones for U.S. networks.

Gizmodo also pointed out that 512 MB of RAM--one of the so-called weaknesses of the new Nokia phones--was plenty, noting that the new iPhone 4S was also getting along just fine with the same memory footprint: "Mango lets apps run in the background, but in a suspended state, with APIs running for doing things like playing music and transferring files. When you switch back to the app, it 'rehydrates' itself, but apps aren't truly running parallel in the OS, like they do on Android. WP also limits the amount of memory that an active app can use, so even if a handset were loaded with bonus RAM, it wouldn't matter."

Like HP, Nokia made a good start; but only a start. At the Web 2.0 Summit a week earlier, Microsoft CEO Steve Ballmer admitted that Microsoft and its hardware partners would have to get really aggressive on pricing, perhaps hinting that, as with so many other Microsoft products, the company aimed to be a leader in cost-effective solutions. Web 2.0 host John Battelle also pressed Ballmer on whether Microsoft would ultimately make hardware, like smartphones, and Ballmer cleverly sidestepped the question, saying that the business model of creating software that hardware manufacturers could license had worked well for the company so far . . . an answer that won't necessarily haunt him if Microsoft decides to consummate its heavy investment in Nokia with an acquisition.

While HP and Nokia began heading on new journeys, SAP was continuing one that has been working well for it lately. As information's Doug Henschen wrote about SAP's excellent earnings announcement on Wednesday: "Enterprise applications vendor SAP reported Wednesday strong third-quarter financial results highlighted by record revenue, a seventh consecutive quarter of double-digit growth, and a double-digit gain in market share against rival Oracle."

While much of the continued growth came in software revenue, SAP executives are optimistic about other aspects of the business. Wrote Henschen: "The Hana appliance, in particular, was the focus of attention during calls with financial analysts and journalists. [SAP co-CEO Bill] McDermott said the technology would easily meet its first-year goal of generating 100 million Euros ($138 million) in revenue and that the forward-looking annual sales pipeline is now 600 million Euros ($829 million)."

McDermott made a stopover in information's offices later on Wednesday. Tanned and smiling, he was in an unflappable mood. He, too, said that all felt a bit right in the world.

While McDermott had good reason to say so, he is also hedging his bets a bit for the fourth quarter and beyond.

But so too are we all.

Fritz Nelson is the editorial director for information and the Executive Producer of TechWebTV. Fritz writes about startups and established companies alike, but likes to exploit multiple forms of media into his writing.

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