The $64 Billion Question: Is Whitman the Right Person?

By Chris Preimesberger  |  Posted 2012-05-28 Print this article Print

But here is The $64 Billion Question: Is Whitman the right leader for the HP job at this time?  She's only been in the chair since Sept. 22, 2011, so conventional reasoning is that it's too early to judge.

A large number of long-timers in the IT business weren't impressed with her hiring last year. They haven't been given much to change their minds since then.

Criticism Starting to Show Up

With two lackluster quarterly earnings reports under her sash and 27,000 employee layoffs in the immediate plan, some industry observers are already starting to call for her replacement. Forbes' contributing writer Adam Hartung came out with a piece May 25 headlined, "HP Is Broken, And Meg Whitman's Not the CEO to Fix It." It seems harsh, but the world is harsh. You take a job like CEO of HP, well, you'd better have a thick skin. Whitman alludes all the time to the one she acquired during her $160 million political campaign two years ago.

Writers for the New York Times, Wall Street Journal, Fortune and others haven't been quite that direct, instead writing about what she will have to do to right the ship. A few analysts are telling eWEEK off the record that Whitman's an excellent executive but that she still may not be the right one for the job. So there's no question that doubt is beginning to surface.

Whitman has said, several times, that production-line problems lie in HP's antiquated internal systems€”ironic for a technology company as ostensibly ahead of the curve as HP. Whitman said on the most recent earnings concall that HP's problems are "not the product €¦ it€™s not the market €¦ it€™s not the competition. This is about a classic entrepreneurial company scaling other [read that 'internal'] challenges. It€™s a whole different ball game."

HP should just face it: This may not be a job for an outsider or an insider. It's a job for Superman, although he was trained as a journalist and probably wouldn't be qualified, either.

Look at the hard financial facts. Investors have been dumping HP's stock lately like trash trucks heading to landfill.  The company market cap has slipped about 60 percent€”60 percent!€”in the last two years, from about $52 per share to $22 per hare. That's a paper total of about $60 billion.

There Must Be Somebody at the Company Who Can Lead

Sixty billion dollars could fund the R&D and marketing of a lot of new products to sell. There's true power in the HP name, history, product line and its 349,600 employees. Somebody in that group has got to have the vision, confidence, business acumen, charm, grace and, yes, balls to lead this company. Chances are awfully good there is somebody already on board who can do this job.

Meanwhile, Whitman the outsider incumbent rules, and she deserves all the luck in the IT world. Our hat is off to anybody who dares to claim that job. She has said that it may take four to five years to get HP back on a better track, and she's probably right. That makes The $63 Billion Question this: Will she get those four or five years to see it through?

In summary: As we discovered during the Wall Street crisis of 2008-10, some banks were too big to fail. HP may be too big to manage.

Chris Preimesberger is eWEEK's Editor for Features and Analysis. Twitter: @editingwhiz

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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