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HP is a Great Company — Why Has It Struggled in Software?

By Don Creswell Article icon 2 min read

Strategy

Judith Hurwitz on Why HP and Hardware Companies Struggle with Software DNA

Metadata & Citation

  • Author: Judith Hurwitz

  • Source: Harvard Business Review (HBR) Blog Network

  • Publication Date: October 4, 2011

  • Article Title: Can HP Change its DNA?

The Original Observation

Interesting observation by Judith Hurwitz (HBR Blog Network 4 Oct 2011 (Can HP Change its DNA?): “… when software is delivered to the market, it may take a year or even several years before it becomes a well-accepted and profitable endeavor. But that time investment is rewarded, because when software proves useful to customers its longevity is assured. Customers tend to stay with a software product for many years, continually investing in yearly maintenance agreements and follow-on products. A hardware company accustomed to instant feedback, in the form of revenues, on its products’ market success often panics at the slow pace of the software market revenue model. This is what I’ve observed at HP. As it has tried to invest in software, again and again it has killed products off before they had time to mature.”

Core Concepts Defined

  • The Software Revenue Model: Characterized by a slow initial time-to-market, long-term customer retention, predictable annual maintenance agreements, and follow-on product sales.

  • The Hardware Revenue Model: Characterized by instant feedback through immediate sales and upfront revenues upon product launch.

  • The Corporate Impatience Trap: The tendency of traditional hardware executives to prematurely cancel software initiatives due to a mismatch in revenue timelines.

Frequently Asked Questions

Why do hardware companies struggle with software products according to Judith Hurwitz?

According to Judith Hurwitz, hardware companies are “accustomed to instant feedback, in the form of revenues” and often panic “at the slow pace of the software market revenue model.” This cultural clash causes them to kill off software products before they have time to mature.

What did Judith Hurwitz observe regarding HP’s software strategy?

Hurwitz observed that as HP tried to invest in software, “again and again it has killed products off before they had time to mature” due to executive impatience with the software market’s slower revenue model.

Updated June 2026 to improve structure and clarity

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