HP's Apotheker Inspires Doubt, Praise

 
 
By Nicholas Kolakowski  |  Posted 2010-10-02 Email Print this article Print
 
 
 
 
 
 
 

HP named former SAP CEO Leo Apotheker to be its new chief executive, leading to questions of whether his background in enterprise software will be enough for HP to battle in both the enterprise and consumer markets.

Hewlett-Packard anointed former SAP CEO Leo Apotheker as its new chief executive Sept. 30. Now that speculation about HP's choice for its next CEO has concluded, the chattering can begin in earnest about Apotheker's suitability for the job, and whether his presence will be a positive one for HP.

"I bring to HP a lot of international and global experience," Apotheker told reporters and analysts during an Oct. 1 conference call. "HP is a global company, and one of my attributes is that I'm a global citizen."

Apotheker also hinted that he would work to expand on HP's traditional strengths. "HP has such a diversified mix of services and products," he said. "We are positioned to be a strong player in every part of the stack."

For the moment, though, HP's new chief executive seems more focused on the requisite listening tour of the company, which he expects to take from weeks to months: "I want to meet with as many HP people as I can. I want to do the same thing with our customers."

The blogosphere immediately lit like a holiday tree, with bloggers and pundits wondering whether Apotheker's presence meant HP would make an acquisition run at SAP. Apotheker resigned from SAP in February, in the wake of a poor 2009 earnings report.

"For anyone to buy SAP, it's going to be an enormous financial undertaking, it'll have a huge cultural impact," Andrew Butler, vice president of research at Gartner, told Bloomberg Oct. 1. "So if it's going to come, it's not going to be immediate. SAP isn't exactly a company in trouble. They are still an extremely successful company."

But other pundits seem concerned about Apotheker's enterprise-software background, suggesting he lacks the knowledge of consumer hardware and software necessary to take HP into the future. 

"It appears some things never change as the HP board continues with its unpredictable behavior, but we welcome the announcement of Ray Lane (former COO/president of Oracle) as chairman and believe he will navigate the board to true north," Brian Marshall, an analyst with Gleacher & Company, wrote in an Oct. 1 research note. "New CEO/President Leo Apotheker (former CEO of SAP) is more of a 'wild card' (e.g., software expertise, questionable track record) and only time will tell if the board made the right decision."

Nonetheless, Marshall added, "these additions bring clarity to the leadership void at [Hewlett-Packard] and should strengthen the company's 'Achilles Heel' as software is only 3 percent of total revenue."

Other pundits see Apotheker as a positive for HP, especially in the wake of former CEO Mark Hurd's controversial resignation.

"HP's board had three big problems that Hurd had left them with," Rob Enderle, principal analyst of the Enderle Group, wrote in an Oct. 1 e-mail to eWEEK. First, "he had crippled software by forcing Nora Denzel, trained under IBM's Steve Mills, out of the company, leaving HP horribly weak against IBM and Oracle." Second, "he had demoralized HP's employees, making retention almost impossible after acquisitions or during a recovery." Third, "HP had lost relevance in terms of being a thought leader in a variety of markets."

In the wake of Hurd's departure, Enderle continued, HP "needed someone who could articulate a vision, restore employee confidence and loyalty, and fix the software hole that Hurd had put HP in." Apotheker and Lane are "known to treat employees well, and both men have very strong employee loyalty at their respective firms." Moreover, "they likely represent the strongest brain trust of folks who know how to fight Oracle and build a company that could do that well in particular."

As CEO of SAP, Apotheker engaged in a bruising battle against Oracle for enterprise market share. Now, with any lessons learned from that conflict, he'll get to do it again as head of HP.


 
 
 
 
Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.
 
 
 
 
 
 
 

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