Hewlett-Packard will draw on former SAP CEO Leo Apotheker's experience as it adds software to its diverse IT infrastructure lineup and expands into international markets.
With software veteran Leo Apotheker at the helm, Hewlett-Packard is poised
to bring applications into its arsenal of PCs and servers.
It took only 55 days, but the technology giant announced Sept. 30 that it
had chosen Apotheker, who last sat in SAP's
top seat, to be the new
Apotheker replaced Mark Hurd, who left amid a scandal
involving accusations of sexual harassment and claims of improper expenses,
then was hired as Oracle
HP introduced its new CEO to investors on
a conference call on Oct. 1. During the call, Apotheker said he believed
Hewlett-Packard was uniquely positioned as big technology companies pull
together hardware, software and services businesses, but it was
"undervalued," he said.
"There are few companies that can even come close to what HP can do in
hardware," Apotheker said.
However, HP is "not grounded" in software, he said, and the
company needs to pay more attention to building up that part of the business.
"Software is the glue," Apotheker said. "It's how we can make
sure that the various parts of our technology work together."
Industry analysts say HP needs to dramatically expand its software portfolio
to lessen its dependence on low-margin PC sales and to successfully fight back
rivals such as Oracle, Cisco Systems and IBM,
which offer comprehensive software offerings integrated with hardware. In
introducing Apotheker, HP officials said the company needed a strong executive
that could steer the company internationally, especially into high-growth and
emerging markets, experience that Apotheker brings to the table.
Apotheker, whose name had not appeared during the flood of rumors
about possible HP CEO choices,
spent most of his career at SAP
in various senior executive roles. He rose from deputy CEO
to co-CEO before finally becoming the sole CEO
in 2009. During his 18-month tenure, he cut costs and oversaw some of the
company's biggest acquisitions, before abruptly in February resigning
after SAP had its first annual sales drop
While calling the board "unpredictable" and Apotheker a "wild
card," Gleacher & Company analyst Brian Marshall wrote in a research
note that the appointment was not a "thesis changer." Under Hurd, HP
has been moving aggressively into the software and services businesses, and
appointing someone with proven software expertise merely cements the company's
Marshall called software the company's "Achilles heel," as
software accounted for an anemic 3 percent of total revenues, but acknowledged
that HP has been aggressively acquiring companies to help build up the
business, including 3PAR, Palm
As the world's biggest maker of business-management software, SAP
can help HP establish itself in the enterprise software space. "We would
not be surprised to see HP and SAP get
closer," Cowen and Co. analyst Peter Goldmacher said in a research note.
When pressed about a relationship with SAP,
Apotheker played it safe on the conference call, saying merely the two
companies were partners and there could be "great opportunities"