PALO ALTO, Calif. (TheStreet) -- The stakes are high for HP (HPQ) CEO Leo Apotheker, who will reveal his long-term strategy for the tech giant next week. With HP's shares down almost 19% over the last 12 months, the new CEO must conjure up a road map capable of lifting the company's stock.
Up first, predict analysts: software as the next big item on Apotheker's to-do list. Software sales accounted for just 2% of HP's overall first-quarter revenue, compared to 25% at rival IBM, during its most recent quarterly report.
"At this point, HP's largest challenges relate to enterprise software, a point underlined by Apotheker's original hiring and the company's ongoing tussles with Oracle (ORCL)," said Charles King, principal analyst at Pund-IT research, in an email to TheStreet. "Despite the financial benefits HP enjoyed under Mark Hurd, he left the company high and dry so far as business software assets are concerned, [so] on March 14, I would expect Apotheker to outline a workable plan for repairing those shortcomings."
More specifically, King said that Apotheker may unveil new solutions involving integrated hardware and software. The tech giant has already made moves into this space, recently ramping up its partnership with Microsoft (MSFT) to launch pre-packaged bundles of hardware and software aimed at corporate customers looking to analyze their data.Apotheker has also promised a major focus on cloud computing and connectivity. "I believe that Apotheker has a software vision that will circle around cloud," said Jessica Breen, an analyst at Technology Business Research (TBR), in an email to TheStreet. "I expect that there will be a heavy emphasis on refreshing the software after lackluster performance." There has also been speculation that Apotheker will bolster HP's OpenView systems management product, to better compete with IBM's Tivoli offering.
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