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Why Leo Apotheker will be fired from Hewlett Packard (February 2011)

88 points by blumentopf 15y ago

jeffreymcmanus 15y ago
His Meg Whitman theory is nonsense. Not only does she have not a lick of hardware or software experience (her expertise is in consumer internet, which is different than both those businesses), if the board is really looking for somebody to "knock back brewskies with the engineers," Whitman is probably the last person in the world they'll pick. When she was at eBay she was fanatical about insulating herself from the engineering organization.
Bud 15y ago
Wow, did Cringely ever nail this. Right on target with the observation that Apotheker "has no history in hardware"; six months later, Apotheker has basically eliminated most of HP's hardware business. PCs, phones and tablets are gone; only printers (and hopefully HP-41CX calculators!) are left. Meanwhile, Apotheker has decided to compete in the cloud space. Some company named Apple has also decided to go big in the cloud, I hear. Gee, I wonder who will win that battle. HP better hope that none of the big boys decide to eat their lunch in the printer market, or they may not survive at all.
- bad_user 15y ago
  Some company named Apple has also decided to go big in the cloud, I hear. Gee, I wonder who will win that battle. There are bigger fish than Apple in "the cloud" that HP would have to worry about -- Amazon, Google, Rackspace, heck even Microsoft wants a piece. Giving up WebOS is the stuppidest thing they ever did.
  - Adkron 15y ago
    It really wasn't stupid for their business moves. Software was not their market, and they don't have the market share to compete with Android and iOS. I loved the webOS platform. I'm still using my pre +, but that doesn't make it a right more for HP. I do wish they would have open sourced it. I would like to see it as a desktop os someday. I do think this guy messed up in handling the marketing of webs, but that is more him trusting advisors. The CEO doesn't do everything, but is responsible for it. Good luck to him, but I think he is gone too.
  - cube13 15y ago
    >There are bigger fish than Apple in "the cloud" that HP would have to worry about -- Amazon, Google, Rackspace, heck even Microsoft wants a piece. Why? At least 3 of the 5 cloud providers you mentioned(Amazon, Apple and MS) use HP servers as a part of their hardware infrastructure. It's not like HP isn't making money from them, and I sincerely doubt that market is going anywhere, considering how many services are moving to cloud-based computing.
    - justincormack 15y ago
      The margins on the servers Amazon buys are not that high. They are buying commodity servers, not the highly redundant high end ones. With just a couple of SATA drives. No redundant power supplies, raid controllers, hotplug ram and cpu and all the other high margin stuff that makes the server business really profitable. Apple is probably more profitable for them. There was an old story that Apple designed their computers using a Cray supercomputer, while Seymour Cray designed his supercomputers on a Mac.
      - cube13 15y ago
        > They are buying commodity servers, not the highly redundant high end ones. With just a couple of SATA drives. No redundant power supplies, raid controllers, hotplug ram and cpu and all the other high margin stuff that makes the server business really profitable. Amazon might not be buying top of the line servers, but they're buying a TON of them, as well as service contracts for all of them. That equals a LOT of money for HP. Apple is buying DL360 G6 and G7 servers(http://www.theregister.co.uk/2011/06/09/apple_maiden_data_center/ http://www.theregister.co.uk/2011/06/09/apple_maiden_data_ce...), which run anywhere between $2000 and $8000 each. Probably the mid-range models with a decent discount, but again, we're talking a bulk equipment and support contract.
        akronim 15y ago
        Is it worth having service contracts if you have thousands of machines? I would have thought it's analogous to car hire companies not having insurance on their cars (because with enough cars the distribution of accident costs evens out)
- CrLf 15y ago
  You are forgetting HP's server business.
suking 15y ago
Article loses credibility (imo) when it says Hurd was a worse hire than Fiorina. Hurd practically doubled the stock value for shareholders during his tenure and was considered an AMAZING CEO. Yeah, he disgraced HP a little with the sexual harassment issue, but that doesn't mean he wasn't an effective leader.
- yuhong 15y ago
  Judging companies just by stock price is a horrible idea.
  - masklinn 15y ago
    If your goal is to make a quick buck on your shares, it's perfect. And that's all these CEOs are brought in for. So by that metric, Hurd was a stellar CEO.
    - ramy_d 15y ago
      I don't get it, didn't HP finally benefit from Carly Fiorina's decision to merge with Compaq?
- rhizome 15y ago
  How much of that stock bounce was due simply to Hurd isn't Carly?
- forgotAgain 15y ago
  Hurd was terrible. He was a one trick pony who did nothing but cut, cut, cut. That might have helped with the stock price and quarterly targets for a couple of years but it was short term thinking and ruined HP as a high-end consulting and software company.
  - deleted 15y ago
    [deleted]
  - Cushman 15y ago
justincormack 15y ago
Clearly they didnt have enough money to buy SAP, hence the purchase of Autonomy. If they sell the pc and printer businesses it might be possible I suppose. Or more likely a merger.
- rbanffy 15y ago
  I am happy HP's founders are no longer alive to see this happen. I have seen something similar happen to Unisys. Sad, very sad.
- Mrich30 15y ago
  I wonder whether the integration of SAP and HP would be possible, has there ever been a successful fusion between a mostly US/mostly european company (speaking of development)?
  - justincormack 15y ago
    Maybe buying (uk based) Autonomy is a trial run? We will see with Microsoft and Skype (Estonia). I cant think of any big examples, though there was ICL Fujitsu (uk Japan), Europe does not have a lot of large software companies.
    - nikcub 15y ago
      I doubt it was a trial. HP only have a billion dollars in cash left now, and their stock has tanked to a market cap lower than SAP's. I think they found out that SAP was too big and too expensive and had no need for HP so went with Autonomy as a second choice
dr_ 15y ago
Doesn't the article actually explain why he won't get fired? It suggests that in order to survive he needs to increase HPs market share in enterprise software. Hardware decisions aside, this purchase seems to me to indicate he is doing just that. SAP may be out of their league - for now.
crag 15y ago
I doubt SAP would want to be sold. HP is in no position for a hostile takeover. Their [HP] best bet, IMHO is dump this guy, sell off the consumer pc business and get back to their core. How many predicted this would happened when HP merged with Compaq?.

88 points by blumentopf 15y ago

His Meg Whitman theory is nonsense. Not only does she have not a lick of hardware or software experience (her expertise is in consumer internet, which is different than both those businesses), if the board is really looking for somebody to "knock back brewskies with the engineers," Whitman is probably the last person in the world they'll pick. When she was at eBay she was fanatical about insulating herself from the engineering organization.

Bud 15y ago

Wow, did Cringely ever nail this. Right on target with the observation that Apotheker "has no history in hardware"; six months later, Apotheker has basically eliminated most of HP's hardware business. PCs, phones and tablets are gone; only printers (and hopefully HP-41CX calculators!) are left. Meanwhile, Apotheker has decided to compete in the cloud space. Some company named Apple has also decided to go big in the cloud, I hear. Gee, I wonder who will win that battle. HP better hope that none of the big boys decide to eat their lunch in the printer market, or they may not survive at all.

bad_user 15y ago
Some company named Apple has also decided to go big in the cloud, I hear. Gee, I wonder who will win that battle. There are bigger fish than Apple in "the cloud" that HP would have to worry about -- Amazon, Google, Rackspace, heck even Microsoft wants a piece. Giving up WebOS is the stuppidest thing they ever did.
- Adkron 15y ago
  It really wasn't stupid for their business moves. Software was not their market, and they don't have the market share to compete with Android and iOS. I loved the webOS platform. I'm still using my pre +, but that doesn't make it a right more for HP. I do wish they would have open sourced it. I would like to see it as a desktop os someday. I do think this guy messed up in handling the marketing of webs, but that is more him trusting advisors. The CEO doesn't do everything, but is responsible for it. Good luck to him, but I think he is gone too.
- cube13 15y ago
  >There are bigger fish than Apple in "the cloud" that HP would have to worry about -- Amazon, Google, Rackspace, heck even Microsoft wants a piece. Why? At least 3 of the 5 cloud providers you mentioned(Amazon, Apple and MS) use HP servers as a part of their hardware infrastructure. It's not like HP isn't making money from them, and I sincerely doubt that market is going anywhere, considering how many services are moving to cloud-based computing.
  - justincormack 15y ago
    The margins on the servers Amazon buys are not that high. They are buying commodity servers, not the highly redundant high end ones. With just a couple of SATA drives. No redundant power supplies, raid controllers, hotplug ram and cpu and all the other high margin stuff that makes the server business really profitable. Apple is probably more profitable for them. There was an old story that Apple designed their computers using a Cray supercomputer, while Seymour Cray designed his supercomputers on a Mac.
    - cube13 15y ago
      > They are buying commodity servers, not the highly redundant high end ones. With just a couple of SATA drives. No redundant power supplies, raid controllers, hotplug ram and cpu and all the other high margin stuff that makes the server business really profitable. Amazon might not be buying top of the line servers, but they're buying a TON of them, as well as service contracts for all of them. That equals a LOT of money for HP. Apple is buying DL360 G6 and G7 servers(http://www.theregister.co.uk/2011/06/09/apple_maiden_data_center/ http://www.theregister.co.uk/2011/06/09/apple_maiden_data_ce...), which run anywhere between $2000 and $8000 each. Probably the mid-range models with a decent discount, but again, we're talking a bulk equipment and support contract.
      - akronim 15y ago
        Is it worth having service contracts if you have thousands of machines? I would have thought it's analogous to car hire companies not having insurance on their cars (because with enough cars the distribution of accident costs evens out)
CrLf 15y ago
You are forgetting HP's server business.

suking 15y ago

Article loses credibility (imo) when it says Hurd was a worse hire than Fiorina. Hurd practically doubled the stock value for shareholders during his tenure and was considered an AMAZING CEO. Yeah, he disgraced HP a little with the sexual harassment issue, but that doesn't mean he wasn't an effective leader.

yuhong 15y ago
Judging companies just by stock price is a horrible idea.
- masklinn 15y ago
  If your goal is to make a quick buck on your shares, it's perfect. And that's all these CEOs are brought in for. So by that metric, Hurd was a stellar CEO.
  - ramy_d 15y ago
    I don't get it, didn't HP finally benefit from Carly Fiorina's decision to merge with Compaq?
rhizome 15y ago
How much of that stock bounce was due simply to Hurd isn't Carly?
forgotAgain 15y ago
Hurd was terrible. He was a one trick pony who did nothing but cut, cut, cut. That might have helped with the stock price and quarterly targets for a couple of years but it was short term thinking and ruined HP as a high-end consulting and software company.
- deleted 15y ago
  [deleted]
- Cushman 15y ago

justincormack 15y ago

Clearly they didnt have enough money to buy SAP, hence the purchase of Autonomy. If they sell the pc and printer businesses it might be possible I suppose. Or more likely a merger.

rbanffy 15y ago
I am happy HP's founders are no longer alive to see this happen. I have seen something similar happen to Unisys. Sad, very sad.
Mrich30 15y ago
I wonder whether the integration of SAP and HP would be possible, has there ever been a successful fusion between a mostly US/mostly european company (speaking of development)?
- justincormack 15y ago
  Maybe buying (uk based) Autonomy is a trial run? We will see with Microsoft and Skype (Estonia). I cant think of any big examples, though there was ICL Fujitsu (uk Japan), Europe does not have a lot of large software companies.
  - nikcub 15y ago
    I doubt it was a trial. HP only have a billion dollars in cash left now, and their stock has tanked to a market cap lower than SAP's. I think they found out that SAP was too big and too expensive and had no need for HP so went with Autonomy as a second choice

dr_ 15y ago

Doesn't the article actually explain why he won't get fired? It suggests that in order to survive he needs to increase HPs market share in enterprise software. Hardware decisions aside, this purchase seems to me to indicate he is doing just that. SAP may be out of their league - for now.

crag 15y ago

I doubt SAP would want to be sold. HP is in no position for a hostile takeover. Their [HP] best bet, IMHO is dump this guy, sell off the consumer pc business and get back to their core. How many predicted this would happened when HP merged with Compaq?.