Computer Weekly Editor's Blog

Sep 30 2011   3:07PM GMT

HP shenanigans highlight unprecedented changes in IT industry

Bryan Glick Bryan Glick Profile: Bryan Glick

Leo Apotheker

What exactly is going on at HP?

The world’s largest technology company is now onto its third CEO in little over a year. First Mark Hurd resigned after allegations of sexual harassment and false expense claims. Hurd was an aggressive cost cutter, not popular among the rank and file of the supplier, but loved by shareholders who saw the value of their investment increase.

The choice of Hurd’s successor came as a surprise to many. Leo Apotheker was a Germanically efficient CEO of SAP, but would have been on few outsiders’ shortlist to take arguably the top job in the IT industry.

Apotheker then shocked observers even more with his announcement in August that HP was to offload its $41bn PC business – the world’s largest – ditch its 55-day old Touchpad tablet range, and buy UK software firm Autonomy for over £7bn.

He achieved a notable hat-trick of shocks by being sacked barely six weeks later, walking away with a $13.2bn pay-off that will cause many to question the rewards of failure.

HP even managed one further surprise of its own, appointing former eBay CEO Meg Whitman to the top job that has become something of a poisoned chalice. Nobody could doubt Whitman’s success and leadership ability at the online auction site, but she has no experience of running a major technology supplier.

Meanwhile, HP’s share price continues to plummet, leading cheeky critics to suggest a takeover bid from highly acquisitive, cash-rich Oracle.

HP’s travails are a symptom of an unprecedented restructuring of the IT industry, as so-called consumerisation turns consumer technology into the driving force of business IT, and the cloud promises to break traditional supplier strongholds in out-of-date, command-and-control style IT departments.

HP is at least insulated by relative sales success, unlike struggling Nokia, Cisco, Blackberry-maker RIM, and no doubt others to come.

The IT sector has caused great disruption in many of its customers’ industries, as technology and the internet break old business models, reduce barriers to entry, and promote innovation. That same disruption is now changing the IT industry itself, and when the biggest supplier in the world is affected, you can’t help but feel we’re reaching a significant tipping point in IT.

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  • Anonymous
    You may want to check your statement about Mr Apotheker's pay-off. What he got was pretty indicative of the ridiculous kind of payout clauses CEO's can now negotiate. Non-performance-based payouts are ridiculous, but just makes the "average Joe" wonder where they can get access to these super-agents to negotiate our own employment contracts :) However the stated $13.2bn in your article almost made me fall off my chair until I checked the associated link!
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