HP is closing down its PC operations and is instead "sharpening" its focus on the Cloud and infrastructure solutions and software with a focus on commercial markets.

 

It made the announcement last week at the same time as releasing its Q3 financial results and its intentions to buy UK infrastructure software company Autonomy.

 

The move, it said, will push HP into higher value and high margin growth categories and increase investment in innovation to give it a new standing in the market.

 

The announcements have sent HP’s share price down by 25%, and according to the Financial Times, HP CEO Leo Apotheker has scheduled a flight to the UK today where he is to talk with investors in London.

 

HP has offered Autonomy for £7.9bn. The news pushed Autonomy’s shareprice up by 71.5%.

 

The deal with Autonomy is expected to take about a year to close, and analysts have warned that HP could face problems selling its hardware products while it waits for new revenue streams to start to flow.

 

Autonomy makes software for mission-critical applications, including for information governance, records management, archiving, business process management, web content management and more.

 

HP said the purchase will "accelerate HP’s ability to deliver on its strategy to offer cloud-based solutions and software that best addresses the changing needs of businesses".

 

It was not the first software company HP had on its list, however. According to a report by Bloomberg, HP had also considered buying application connection software maker Tibco Software and Teradata, a US-based software maker with a focus on data warehousing earlier in the year. 

 

As for its PC business, HP said it is still exploring what options it has for its Personal Systems Group, and did not deny a spin-off or even a sale of the department.

 

It said it will discontinue its webOS lines, especially for TouchPad and webOS phones which have not met internal milestones of financial targets.