So the dirty work at HP, or hopefully most of it, has been done. Recently hired CEO Mark Hurd went ahead and hacked off US$1.9 billion in savings last month when he announced the firm’s cutbacks, mainly to be seen in departments such as Human Resources, IT and Finance. The company’s uneven financial performance in recent quarters loomed like a storm cloud over HP’s world, so the resulting thunder, lighting and sheets of rain hardly came as a big surprise.
Now that the unsavoury tasks have been carried out, the company can begin to look outward. Since Hurd took over for the controversial Carly Fiorina, and arguably before that time, HP has been largely focused inward, trying to find the best place for itself at the crossroads of the product and services worlds of IT.
Fiorina’s acquisition of Compaq, the move for which her often acrimonious stint as CEO will be remembered, attempted to bring the 70-year-old company into the realm of service delivery. She had the tricky job of also maintaining HP’s legacy in hardware sales.
Not surprisingly, HP’s traditional strengths, in particular the printing division of late, has kept the ship somewhat balanced, while the services foray remains a tenuous work in progress.
This is the vessel that Hurd must now really begin to steer in a definite direction. It’s up to him and his team to decide just what kind of company HP is going to become as it enters its next chapter. Don’t be surprised if the philosophy involves a further paring down to become a lean, PC-selling machine similar to Dell, while continuing to play the services card — although perhaps to a lesser degree than Fiorina had done. Compaq was her brainchild; don’t expect Hurd to be as beholden to the concept as she was.
Whatever decisions Hurd does make, it’s getting to the point where they will have to be decisive winners if he has any intention of being around for a while. Users and employees have, for the most part, been a forgiving bunch to this point. HP is one of the industry’s biggest corporate icons, and its reputation will only be allowed to be toyed with for so long. It will be interesting to see how Hurd handles such a weighty responsibility.
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