Can HPs Hurd Handle Services, OpenView?

New HP CEO Mark Hurd must quickly show his grasp of the enterprise-server market and the OpenView software line, observers warn.

Hewlett-Packard on Tuesday confirmed that it has tapped NCR CEO Mark Hurd to take over as its president and CEO, replacing the ousted Carly Fiorina. But his quick assignment, for many observers, raises more questions than it answers—especially around HPs services and software business.

"There is a short list of things he has to address immediately: what happens to the enterprise server business, the enterprise services business and the OpenView business. I frankly dont think he has more than 30 to 45 days to declare what hes going to do and begin to do it," said Michael Dortch, principal business analyst and IT infrastructure management-practice leader at Robert Frances Group in Westport, Conn.

Hewlett-Packard Co.s board, which hailed Hurds execution skills and history of driving shareholder value, likened NCR Corp.s business to HPs—albeit on a much smaller scale.

NCR, like HP, is a complex organization serving multiple business segments, according to the news release announcing Hurds appointment.

"NCR is a quiet giant of a company, but their services strategy has evolved similarly to HPs. They are two legacy companies that have had to transition their services organizations from a maintenance kind of business into a managed-services kind of business," said Eric Rocco, managing vice president of outsourcing research at Gartner Inc. in Lowell, Mass.

But that comparison comes up short, said Frank Dzubeck, president of Communications Network Architects Inc., a consulting company based in Washington. "HP was trying to build a major services organization to compete against IBM. Thats a different scenario," he said.

Although many HP observers believed that Ann Livermore, executive vice president of the Technology Solutions Group and services chief, was in the running for the CEO slot, not all agree that she was passed over.

/zimages/1/28571.gifRead more here about the factors in Hewlett-Packards CEO hunt to replace Carly Fiorina.

"I didnt think this time around she was a serious candidate. Itll be interesting to see how this plays with her having a new boss," said Douglas Chandler, industry analyst at International Data Corp. in Framingham, Mass.

Whether the choice will affect Livermores decision to stay is a matter of speculation.

"I know Ann is a longtime HP veteran who will stick with the company if she likes what new management will bring," said Gartners Rocco.

On the software front, Hurd will be challenged to see the strategic value in HPs OpenView line and to extend it into new areas. Although as a 25-year veteran at NCR he did have a short stint in charge of NCRs data-warehouse software, it is an open question whether he has the understanding to effectively oversee HPs OpenView unit.

/zimages/1/28571.gifClick here to read more about Hewlett-Packards revamp of its OpenView services-management software line.

"They need to find someone who understands and has worked in both hardware and software. Software has not been HPs strength. There was no strategy behind that [OpenView] product set for too long. Now its all about using the OpenView software. They need that dual understanding," said Jasmine Noel, principal at Ptak, Noel & Associates in Amherst, N.H.

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