In 1998, Paul Tsaparis was appointed CEO of HP Canada, becoming one of the youngest chief executives of a major company in this country. The same year, Tsaparis also received Canada’s Top 40 under 40 award – presented to exceptionally successful Canadians under the age of 40. That was seven years ago. Today, Tsaparis remains at the helm at HP Canada (some would say that itself is an accomplishment given today’s rough and tumble IT environment) – and organizations are still vying to honour him. In this exclusive interview with Joaquim P. Menezes, editor of ITWorldCanada.com, Tsaparis talks about what makes him tick. He outlines his vision for the future of HP Canada in the post-Carly Fiorina era, discusses his company’s commitment to “e-inclusion” – and much more.
The buzz out of Wall Street is that HP is worth more in pieces than it is together. With Carly Fiorina gone, will the HP-Compaq merger be revisited and reversed?
It’s important to understand the whole premise of the merger. [It] was really a tactic…one which, interestingly enough, precedes Carly. It went back to when our board of directors made a strategic decision to spin off Agilent Technologies. At that time the board said, it’s important that HP be the leading technology company in the world. To realize this vision, some things were going to have to happen…some divestitures and acquisitions along the way. So Carly was hired, in effect, to realize a vision that the Board set out some time ago. People are asking how fast can you grow this integrated company. To me that’s the real question, not whether it should be together or in its various parts. Paul Tsaparis>Text
The merger with Compaq was focused on HP being number one or two in the key market places we compete in around the world. There was also an important execution aspect. Our goal was to save $2.5 billion in costs by the end of 2004. We ended up saving $3.5 billion of costs by the end of 2003 – $1billion more, a year earlier. This is a tremendous proof point for the [successful] execution of the merger. Where are we today? Guess what. We’re number one or number two in the key market places around the world. We have a dramatically reduced cost structure. But most importantly, we have never been in a better position to serve our customers’ end-to-end technology needs than today. And customers tell us this every day. People are asking: how fast can you grow this integrated company. To me that’s the real question, not whether it should be together or in its various parts.
So you’re saying the merger was a success, and its goals have been met and exceeded. Isn’t that an argument that HP and Compaq should remain one company?
The quick answer is we [want to] get the most out of the world-class assets we’ve put together. That’s what Mark Hurd [HP’s new CEO] is focused on right now, and what we are focused on at HP Canada. Hurd has talked about spending time understanding the business, understanding [its] dynamics…When I think about the focus of running a company…it all starts with your customers, their needs, wants, and desires; that’s a wonderful place to begin.
Direct PC sales are currently only a small part of HP Canada’s business. Do you have any corporate mandate to increase direct sales in Canada?
In the Canadian context we have focused on how customers want to buy from HP. Our customers here are very supportive of what we think is the best channel partner network in Canada. There’s no technology company that puts more product through the channel than HP. Hundreds of thousands of people across Canada want to have a relationship either with HP’s retail or channel partners. [It’s] the way they choose to buy technology and services from us. A part of the marketplace wants to have a direct relationship with the manufacturer, so we’ve been improving our ability to serve those customers’ needs [and] working very hard to do that as well.
You’ve admitted that only 10 per cent of people in the world can afford to buy HP products. What is HP Canada doing to make its technology more affordable and accessible to the remaining 90 per cent?
It starts with ensuring our e-inclusion strategy (that’s what we call it) is tightly integrated with our overall business strategy at HP. It’s not a sideline. It’s not something we do for the sake of doing it. It’s connected into our strategy to be a truly global company. How are we going to reach out to under-served marketplaces around the world? It has to be through rethinking how we do R&D, how we do marketing, how we do supply chain, and how we do pricing. In some communities, infrastructures just don’t exist. Power, for example, is not a given. In one area in Africa, we were able to use solar power air conditioning [to enable] hundreds of engineers to be trained in an old shell of a building. In fact the whole country’s engineers were trained with technology and capabilities that they never had before. For us the win was understanding how this technology can now be applied in areas where infrastructure can’t be taken for granted. That’s the innovation that will come out of the new strategy we are working on.
Tell me more about your personal involvement, through ITAC (Information Technology Association of Canada), in issues like anti-spam, digital rights protection and e-waste disposal.
I have been both past chair of ITAC and am currently chair of the board of governors. From the ITAC board’s perspective…one of our mandates is the role information and communications technology (ICT) can play in improving competitiveness of Canadian businesses. By any objective measure, ICT investment by Canadian small businesses relative to their US counterparts is different (the US has performed demonstrably better than Canada). In the ITAC board, we consider how the private sector and governments may use ICT to enable economic reforms. We also look at societal issues we need to be savvy about. Rather than individual companies, taking individual stands, we try to collectively respond to issue such as spam (that can debilitate consumers and businesses), environmental waste, privacy and digital rights. We figured by pooling our collective energies, we would get better results.
Recent legal battles have sparked a fierce debate on the digital rights (of music companies) versus the privacy rights of consumers. Where do you stand on this issue?
HP, both through ITAC, as well as globally has worked collaboratively with the recording industry and artistes themselves to ensure that we are not using traditional approaches to what is really a new age problem. Things like levies with respect to media and MP3 players – are really an old world solution. There are technologies out there that protect artistes’ rights. Artistes can benefit from those as opposed to some of the ways we’ve tried to solve these problems in the past. So we’ve putting our energies and innovation [into providing] technologies that protect rights of artistes, the recording industry and the film industry as well. We also respect and adhere to all the privacy legislation that’s in place. We are very careful about the information that we have [on] consumers and companies. That’s very important especially in our outsourcing business, where we manage the technology infrastructures of major financial and government institutions. These organizations entrust important information to us. We have the utmost respect for their privacy and do our best to protect it.
At Linux World you provided impressive statistics on HP’s current use of Linux. Is there an enterprise-level shift within HP towards Linux and Open Source in preference to proprietary operating systems?
The quick answer is an unequivocal “no.” What HP has always been about is choice. We are strong believers that it’s never about one OS. That’s just not the reality of our customers’ environment. A lot of our large enterprise customers, and in fact our small and medium sized customers as well, have a blend of operating systems: it could be Unix, Microsoft [Windows] and now, increasingly, Linux. We can be most credible as a technology provider when we can discuss clients needs with them and then apply the right technology solution – whatever it may be. Candidly, if I only had one solution, and I was coming through your door, what do you think the answer to any potential problem would be? The reverse is much more important: you get much more credibility with clients when you support the environment that makes sense to them. That’s where we put our strategy, energy and efforts. We’re excited at the way the [Linux] marketplace is growing; we’re embracing it and thankfully profiting from it as well. But we can’t do that at the expense of the other operating systems out there.