Cloud Computing and tablet computers have re-written the IT business model

The recent announcement from Hewlett-Packard – the world’s largest manufacturer of PC’s – that they are shedding 27,000 jobs by the end of 2014 is due to a seismic shift in the way IT is delivered to modern businesses according to Gary David Smith the co-founder of Prism Total IT Solutions.

“The business IT sector is rapidly moving towards tablet computers and hosted applications. The old business model of selling hardware is rapidly disappearing,” said Mr Smith – whose company supplies complete IT support to over 1000 SME’s nationwide.

“The sector is now seeing a shift towards other value added services and advice led support as opposed to product sales, hence the declining margin and demand that the manufacturers are seeing is filtering through the business and supply chain.”

“At Prism we have been working for some time to improve our support of mobile devices and develop security and delivery of cloud based applications,” he said.

Hewlett-Packard (HP) say that the 8% cut in their workforce will reduce their balance sheet by $3.5bn (£2.2bn) per year.
A company spokesman said it was too early to predict exactly where the job loses would occur but that all HP sites would be affected. HP employs over 20,000 people in the UK.

California-based HP reported a 31% fall in profits in the second quarter to $1.6bn at the same time as the news of the job losses.

HP’s chief executive Meg Whitman said: “This quarter we exceeded our previously provided outlook and are executing against our strategy, but we still have a lot of work to do.”

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