Hewlett-Packard was right where Wall Street expected when it reported third-quarter revenue of $30.7 billion Thursday.

That's exactly what HP said it would report when it previewed its third-quarter earnings earlier this month--the same day it announced CEO Mark Hurd was resigning. Wall Street was looking for revenue between $29.7 billion and $30.7 billion.

In a statement, Chief Financial Officer and interim CEO Cathie Lesjak said the financial results "demonstrate the power of our strategy and the discipline of our execution."

That follows the company's--and Lesjak's--same message since Hurd resigned following an accusation against him and eventual settlement with a former contractor over sexual harassment. Thursday was the first earnings report following Hurd's exit, and Lesjak made a point of emphasizing that the company will continue along the same path it's been on for the last several years even without the former CEO.

"Let me reiterate: our strategy hasn't changed," she told reporters Thursday.

"When you have a winning strategy, I don't see motivation to change it," Lesjak explained later. "It's something we've been building for the last four-plus years. It's a well-thought-out strategy that's working very well for us."

One of the bright spots during the quarter was the company's PC business. Shipments rose 12 percent, and revenue 17 percent to $9.9 billion. Revenue from notebooks increased 10 percent, but desktops did even better, with revenue up 27 percent during the quarter.

When asked when the company would be getting into the tablet market, Personal Systems Group VP Todd Bradley said that HP will have two products over the next few months. "You'll see us with a Microsoft product out in the near future and a WebOS-based product in early 2011."

The "Microsoft product" is likely the reworked Windows 7 Slate that HP first showed at CES in January but then put on the backburner as it decided what to do with newly acquired Palm and its WebOS mobile operating system.

This story last updated at 3:36 p.m. PDT with information from a conference call, and previously at 2:58 p.m. to correct net earnings for the quarter.
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That figure is an increase of 11.4 percent from the same quarter a year ago. The PC maker also reported net earnings of $1.8 billion, or 75 cents per share, excluding costs related to a legal settlement and taxes.

That's exactly what HP said it would report when it previewed its third-quarter earnings earlier this month--the same day it announced CEO Mark Hurd was resigning. Wall Street was looking for revenue between $29.7 billion and $30.7 billion.

In a statement, Chief Financial Officer and interim CEO Cathie Lesjak said the financial results "demonstrate the power of our strategy and the discipline of our execution."

That follows the company's--and Lesjak's--same message since Hurd resigned following an accusation against him and eventual settlement with a former contractor over sexual harassment. Thursday was the first earnings report following Hurd's exit, and Lesjak made a point of emphasizing that the company will continue along the same path it's been on for the last several years even without the former CEO.

"Let me reiterate: our strategy hasn't changed," she told reporters Thursday.

"When you have a winning strategy, I don't see motivation to change it," Lesjak explained later. "It's something we've been building for the last four-plus years. It's a well-thought-out strategy that's working very well for us."

One of the bright spots during the quarter was the company's PC business. Shipments rose 12 percent, and revenue 17 percent to $9.9 billion. Revenue from notebooks increased 10 percent, but desktops did even better, with revenue up 27 percent during the quarter.

When asked when the company would be getting into the tablet market, Personal Systems Group VP Todd Bradley said that HP will have two products over the next few months. "You'll see us with a Microsoft product out in the near future and a WebOS-based product in early 2011."

The "Microsoft product" is likely the reworked Windows 7 Slate that HP first showed at CES in January but then put on the backburner as it decided what to do with newly acquired Palm and its WebOS mobile operating system.

Bradley reportedly told employees recently that the WebOS tablet will arrive during the first quarter of 2011.

 
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With McAfee deal, Intel to bake in security
   
In the future, you may not have to buy antivirus software for your laptops and

mobile devices if Intel is able to live up to the promise of integrating technology

from acquisition target McAfee, experts said on Thursday.

In announcing its plans to acquire security company McAfee for $7.68 billion, Intel

executives said they see security as being as critical to computing as performance

and connectivity and that they plan to combine security with its hardware and expand

further into the mobile market.

While Intel has been pushing more and more functionality down into the chips, a

marriage with McAfee will mark a shift away from the security firm's traditional

product strategy, experts told CNET.

"Delivering security in Intel products and platforms is a huge departure from the

way McAfee has delivered security technology in the past, as an add-on software

product to an insecure platform," said Chris Wysopal, chief technology officer at

Veracode. "This is where security needs to be, baked in."

The strategy dovetails nicely with the fast adoption of mobile devices and the more

guarded move to cloud computing, where data is stored on remote servers instead of

on local computers and accessed over the Internet, he said.

"I think this acquisition shows the critical importance of security in our now

mobile, increasingly cloud-based, everything-always-connected world," he added.

"Everyone building hardware and software needs to be thinking about the security of

those products from the very beginning of their design, and customers are going to

demand it. Anything less is not going to cut it in the computing environment of

today."

For businesses in the mobile security market, the deal is seen as further validation

that they are on the right track.

"Intel's acquisition of McAfee signals to the industry that smartphones and other

connected devices are joining the web of devices we trust with critical data and

that these devices need to be protected," said John Hering, chief executive of

Lookout. "We have seen threats rising across the major mobile platforms and expect

this trend to increase as mobile devices continue to become the dominant computing

platform."

Don't expect to see security software hardwired onto the chip, said Tim Bajarin,

president of analyst company Creative Strategies. Rather, there will likely be a

bridge on the core CPU (central processing unit) to a security element, much like

there are bridges to additional graphics chips and modems, he said.

"This particular deal allows Intel and McAfee to work together to tie future

generations of software security to the processor via some sort of SOC (system-on-a

-chip) solution," Bajarin said. "Today if a hacker wants to come into a system it

almost always is done through software. But Intel and McAfee are capable of adding

even another level of security, which would make a hacker have to break the hardware

code as well as the software code."

McAfee will still sell antivirus and other security software, but their work with

Intel could change the technology landscape fundamentally down the road, according

to Bajarin.

"Intel becomes their strategic partner for them to innovate with on next-generation

security software that can go all the way down to the chip level, and that has not

been done yet by anybody," he said. "It will be fascinating to watch not only how

they innovate, but how they go about securing everything from servers and PCs to

wireless devices. That will be their challenge."

Marc Maiffret, chief technology officer at eEye Digital Security, predicted Intel

would add the security in hardware at the device level but not necessarily at the

chip level, while eventually phasing out McAfee's software-based products.

"TVs and other devices and cars continue to have more and more embedded Internet

connectivity and really are becoming computers, and Intel sees the opportunity to

bring McAfee's intrusion prevention and antivirus across all the devices," he said.

"Intel was in the antivirus security market in the late '90s with the LANDesk

product, but they sold it off to Symantec, so they definitely are not going to be

getting back into that classic security software business."

Several analysts questioned why Intel executives felt they need to acquire McAfee to

get the security enhancements in future products when they already have development

partnerships with McAfee and others.

"I think it's going to be more of a chipset assist than embedding everything in the

chip," said Josh Corman, research director for enterprise security at The 451 Group.

"And many of those opportunities will be open to McAfee's competitors...and have

been happening with joint development. They are going to continue to have

multiplatform support."

Peter Firstbrook of Gartner was similarly skeptical.

"If Intel creates some firmware hooks for McAfee to exploit, then other security

vendors can exploit those APIs as well," he said. "Most significantly, all the

antimalware vendors have had security products for cell phones for years, but nobody

has been willing to pay for it because the threat environment has been relatively

benign and the ISPs or device manufactures are building security into the network or

the device."

The shift to "baked-in" security and the focus on integration that the deal will

require will definitely impact McAfee's existing business, Chris Silva, a senior

vice president of research and service delivery for research firm IANS, predicted in

a blog post.

"We'll see a stagnation of innovation for McAfee's existing product line and a drain

of talent who leave the company seeking greener pastures at smaller, more-focused

vendors that are iterating on a product and security approach," he said.
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Hewlett-Packard was right where Wall Street expected when it reported third-quarter revenue of $30.7 billion Thursday.

That figure is an increase of 11.4 percent from the same quarter a year ago. The PC maker also reported net earnings of $1.8 billion, or 75 cents per share, excluding costs related to a legal settlement and taxes.

That's exactly what HP said it would report when it previewed its third-quarter earnings earlier this month--the same day it announced CEO Mark Hurd was resigning. Wall Street was looking for revenue between $29.7 billion and $30.7 billion.

In a statement, Chief Financial Officer and interim CEO Cathie Lesjak said the financial results "demonstrate the power of our strategy and the discipline of our execution."

That follows the company's--and Lesjak's--same message since Hurd resigned following an accusation against him and eventual settlement with a former contractor over sexual harassment. Thursday was the first earnings report following Hurd's exit, and Lesjak made a point of emphasizing that the company will continue along the same path it's been on for the last several years even without the former CEO.

"Let me reiterate: our strategy hasn't changed," she told reporters Thursday.

"When you have a winning strategy, I don't see motivation to change it," Lesjak explained later. "It's something we've been building for the last four-plus years. It's a well-thought-out strategy that's working very well for us."

One of the bright spots during the quarter was the company's PC business. Shipments rose 12 percent, and revenue 17 percent to $9.9 billion. Revenue from notebooks increased 10 percent, but desktops did even better, with revenue up 27 percent during the quarter.

When asked when the company would be getting into the tablet market, Personal Systems Group VP Todd Bradley said that HP will have two products over the next few months. "You'll see us with a Microsoft product out in the near future and a WebOS-based product in early 2011."

The "Microsoft product" is likely the reworked Windows 7 Slate that HP first showed at CES in January but then put on the backburner as it decided what to do with newly acquired Palm and its WebOS mobile operating system.

Bradley reportedly told employees recently that the WebOS tablet will arrive during the first quarter of 2011.

This story last updated at 3:36 p.m. PDT with information from a conference call, and previously at 2:58 p.m. to correct net earnings for the quarter.
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