The technology company HP has announced a new strategy for its research division, cutting back projects as it attempts to accelerate the commercialisation of ideas within the company.

HP Labs will abandon four fifths of its research projects to focus on 20 or 30 ideas, down from about 150.

"We are going to make fewer, bigger bets," Mark Hurd, HP’s chief executive said.

The company also revealed details of several projects currently underway, ranging from face-recognition software that analyses digital photographs and indexes them according to who appears in them, to a system that predicts corporate information such as sales figures or component prices based on bets placed by employees.

Shane Robison, the company’s chief strategy and technology officer predicted that product development across the technology industry will focus intensely on internet-based applications for the next decade.

When the PC established itself as the core device for computing within the home and the office, he said, there was a decade of prolific development of PC applications. “Now we’re at that same stage with the internet,” he added. “You can assume that it is stable and pervasive.”

He identified five areas in which research areas would be concentrated:

- Information analysis: with so much data available via the web, businesses and individuals need sophisticated software to make sense of it

- ‘Cloud computing’: instead of storing data on individual PCs, cloud computing allows people and companies to store files and software on the internet, accessing them via a range of digital devices from anywhere in the world

- Content transformation: people will need to be able to transfer text, pictures, sound and video from analogue to digital formats, from computers to phones to MP3 players, and from digital formats back into physical products such as posters and books

- Intelligent infrastructure: people will demand smarter, simpler devices and ways of making them connect to each other to access content and services

- Sustainability: increasing energy costs and environmental sensitivity will encourage the development of products that consumer less energy and require fewer resources to build.

The company declined to name the areas in which it would cut back development, but insisted that it was not reducing its commitment to research. “This is not a cost-cutting exercise,” Mr Robison said. “We’re keeping the same resources and distributing them more effectively.”

The change in direction comes after a review of the business conducted by Prith Banerjee, director of HP Labs, who was hired six months ago to revitalise the company’s research and development program.

Despite being the world’s biggest computer and printer manufacturer, HP’s research activities have been less fruitful than those of some rivals. Last year, IBM was granted more than 3,100 US patents, compared with the 1,470 awarded to HP.

Mr Banerjee said that he hoped to inject the spirit of a start-up company into the technology giant by bringing together researchers, engineers and marketers in small teams dedicated to developing an idea. When a project could not be developed by HP itself, it would consider licensing them to other companies, he said.

He insisted that a sharper focus on commercialising ideas would not put a stop to undirected research. A third of resources would be devoted to “blue-sky projects”, where no commercial purpose had been identified, he said, and a third would go to applied research, during which technology would be tied up with a practical application. Product development would take up the remaining third, he said.

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