Q&A: HP’s strategy chief on the Palm acquisition by Jon Fortt @FortuneMagazine April 29, 2010, 9:21 AM EST E-mail Tweet Facebook Google Plus Linkedin Share icons Shane Robison is both HP's Chief Strategy Officer and its Chief Technology Officer – putting his in charge of both M&A and R&D. Photo: HP. Hewlett-Packard’s Shane Robison is one of my favorite guys to chat with in Silicon Valley. As chief strategy officer and chief technology officer for the top-ranked tech company on the Fortune 500, Robison doesn’t just have a great sense of where tech M&A is going, he’s in the driver’s seat. He’s also a savvy executive. Consider that he’s managed the big picture at HP HPQ under two very different bosses in Carly Fiorina and current CEO Mark Hurd. So I was glad to get Robison on the phone for a few minutes on Wednesday, just after HP dropped the news that it’s planning to buy Palm PALM for $1.2 billion. He’s had a busy few months integrating digesting EDS, closing 3Com and snapping up IBRIX, but Robison certainly has the bandwidth for another acquisition – especially when you consider that the HP Personal Systems Group that Palm will join hasn’t added an outside company in more than two years. And Robison has already proven that HP can plan and execute acquisitions of all sizes in a way that boosts the bottom line. For evidence of that, look at how software buys like Opsware and Mercury Interactive have worked out, not to mention the overachieving results out of EDS. Still, Palm is a bit different. It’s the first consumer brand HP has bought since VoodooPC in 2006. It’s the highest-profile consumer acquisition since Compaq. Success here will mean beating no lesser lights than Apple AAPL and Google GOOG , and doing a delicate dance with Microsoft MSFT . I asked Robison how HP would make it work. Below is an edited transcript. — Why buy this? You guys certainly don’t need Palm for the hardware. Does this mean HP will build its mobile device strategy on webOS? That’s exactly right. They’ve got some cool hardware products, but this is about the webOS and app development kits and the app space that they’re building up. It gives us a chance to really grow in a market that, standalone, is more than $120 billion and has grown 20% annually. We think it’s where a lot of the action is going to be in the next generation. The webOS is a modern, very capable operating system that is nicely differentiated. Palm has a strong IP position and a really great group of employees. It’s a change in our business model. Tell me about that change in your business model. Is this one where you’ll be licensing the webOS out, or will it be exclusively for HP’s use? This will be, in the beginning, exclusively for HP’s use. But the change will be we can do a much more tightly integrated hardware/software user experience for our connected devices because we’ll have control over both. I guess we can declare this chapter of Palm’s story over; with an HP acquisition it will cease to exist as an independent company. And Palm failed. I always thought their software was elegant beyond their market success, but they did fail against Apple and some others. Why do you think you can succeed where they didn’t? I think the acquisition is very complementary. What they needed was a bigger go-to-market arm, the kind of reach and scale that we can certainly give them, to take advantage of what they’ve done. They’ve gone off and they’ve invested in an incredibly interesting and, as you’ve said, elegant operating system that’s very modern. It’s all integrated in with the networking space in a very elegant way. What they didn’t have was the ability to invest in a lot of the go-to-market channel to really make this work. Is Jon Rubinstein going to stay? Have other key people on the team committed to stay for a period of time? Jon’s planning to stay, and we have plans in place to retain especially all the key developers, but all the key employees. We’re very anxious to keep them all. And we’re very focused on that. The last time you and I talked, we talked a bit about Android and the reasons why it’s attractive to use. I take it with this announcement that you’re not going to be using Android at all. You’re in a good position owning the software, but it’s difficult to monetize an OS in an environment where a competitor like Google is giving it away. That’s the advantage of doing the whole system. We’re going to have a very elegant solution, including an app store, and an applications community. I think we’ll be able to, with our tightly integrated approach, be very competitive and very differentiated. What does this say about any plans that you may or may not have to use Windows Phone 7? Will webOS be your exclusive mobile platform, or will you also use Microsoft. At one point, Palm was using both its own OS and Microsoft’s. We’re going to have to sort through all that over the coming months. We’re very, very serious partners with Microsoft. We hope to continue to be their biggest customer. And in this particular space, which is a small segment for us, we’ve got to work with them to figure out exactly what the roadmap looks like. How soon do you hope for this to close, and for the first HP devices with webOS to be in the marketplace? We hope to close sometime in our Q3, which ends at the end of July. And we have not yet announced any product roadmaps.