HP to develop cloud products in China

HP, the world's No.1 PC maker, is investing heavily in China and plans to develop cloud-computing products there to sell globally, chief executive Leo Apotheker said.

This week, HP opened a cloud computing centre in the port city of Tianjin, announced a server computer networking and development centre in Beijing and said its Personal Systems Group will establish a China headquarters in Shanghai to develop hardware and Internet products.

"China is not only a huge market, it's also a great place to develop products and develop R&D," Apotheker said at a news conference in Beijing.

"Ultimately, we intend for HP to become the centre of the cloud and connectivity," he said.

Cloud computing refers to users of computers, smartphones and other devices accessing programs and files kept on server computers rather than installed on individual PCs.

The concept is gaining attention as PC makers contemplate making PCs and other linked devices portals to information and content stored elsewhere.

Apotheker is leading a group of some 20 senior HP executives on a visit to China after a recent management reorganisation that put emphasis on developing market share in China and India.

Both countries are crucial to HP, as it duels with Dell in North America and Lenovo and Taiwan's Acer in China.

Apotheker said a dispute with Oracle over Intel's Itanium microprocessor for servers would not have any impact on its partnerships.

HP and Oracle became intense rivals after Oracle's purchase of Sun Microsystems pushed it firmly into the server hardware market, in which it previously cooperated with HP.

Oracle said it will end development of database software for Itanium systems, and HP filed a lawsuit to try to force Oracle to continue developing such products.

Both Intel and HP have insisted they are committed to customers who have invested in HP-Itanium systems, a position Apotheker repeated on Wednesday.

"They have a 10-year roadmap," Apotheker said, referring to Intel's commitment to Itanium. "And HP is committed to keep our promises to our customers."

No layoffs

With the management reshuffling in recent weeks, some senior HP executives left the company while others were reassigned or took on added responsibilities.

The reorganisation will not entail any layoffs, Apotheker said.

"The answer is no," he told Reuters, "and you can quote me on it."

Todd Bradley, head of HP's Personal Systems Group which includes personal computers, was put in charge of developing HP's China strategy.

Bradley told reporters that he wants to accelerate HP's growth in both major Chinese cities and in rural areas.

"Many of our products, PCs, and printers etc will be focused on accessing content that's on the clouds," he said.

HP is set to introduce its tablet computer in the United States on Friday, and is developing a Chinese-language version for Chinese customers, Bradley said.

The tablet will run on the webOS operating system and will have multitasking capabilities and industrial-strength security that Bradley said would set it apart from rivals in the hotly contested market.

WebOS "is the only OS designed to always connect seamlessly and safely to the cloud. There is never a need for a white cable to get your information," Bradley said, an apparent reference to Apple Inc's iPods, iPads and computers, which use white cables to synchronise data with each other.

Apotheker denied HP had any interest in acquiring SAP, the enterprise software maker of which Apotheker himself was chief executive before joining HP last November.

"SAP and HP are good partners and will stay good partners," he said. "There's nothing I want to add to that."

(Editing by Jonathan Hopfner and Vinu Pilakkott)