HP's 7.1 billion acquisition of software company Autonomy has been a disaster, according to financial services firm Magister Advisors.
The company, which advises technology firms on their exit strategy, said the hardware giant has not succeeded in using the merger to transform itself into a "larger solutions business."
HP completed its acquisition of Autonomy last October and, since then, has seen a number of its senior management team leave the company, including the firm's chief executive, Mike Lynch, in May.
In a statement, Victor Basta, managing director of Magister Advisors, said HP is "failing to keep pace with its competitors", including IBM and Dell.
"HP has started pursuing a buy software to get out of hardware' strategy...[but] the acquisition of Autonomy has been a disaster," claimed Basta.
Autonomy is effectively a write-off.
"Autonomy was a pure software license business, around which HP could have built a much larger solutions business. [However], within a few months it is effectively a write-off."
To succeed as a software-touting hardware player requires a "fundamental shift in corporate culture," he added, and is not something that can be easily bought.
"The trouble is that HP, like California, the state in which is it headquartered, is an ungovernable entity," said Basta.
"Its CEO, Meg Whitman, has traded the California Governor's seat for a similar role in the corporate world."
Basta's comments were in response to the publication of HP's third quarter results, which were released this week.
The company posted made a Q3 loss of $8.9 billion (5.6 billion), the largest in the firm's 73-year history.
The loss has been largely attributed to the firm's Enterprise Service division.
HP's software division, which includes Autonomy, achieved year-on-year revenue growth of 18 per cent.
Despite this, Meg Whitman, HP's chief executive, told analysts this week that the firm is "aggressively working" on making Autonomy successful.
"We have a very long way to go, but we are taking steps to fix the problems and help Autonomy succeed," she said.
