Monday, August 29, 2011

The Curious Incident of Night and the HP Touchapd

Cross posting my latest blog

The Curious Incident of a Night and the HP Touchpad

Or perhaps I should call it "How HP's board stopped worrying and Started Loving the Bong".


kage said...

WSJ's article today says something similarly interesting:

Let's say you were given a year to kill Hewlett-Packard. Here's how you do it:

Fire well-performing CEO Mark Hurd over expense-report irregularities and a juicy sexual-harassment claim that you admit has no merit. Fire four board members, as publicly as possible. Foment a mass exodus of key executives who actually know how to run the giant computer company.

Hire new a CEO from German competitor, SAP, which sells business software, not consumer products. Tell the new CEO, Leo Apotheker, that Mr. Hurd "left H-P in great shape."

Draw public criticism from a major corporate-governance advisory firm, alleging Mr. Apotheker filled board openings with cronies.

Pursue pricey mergers and stock buybacks. Allow expenses to run out of control. Try to blow through billions of dollars in cash reserves before the next global economic slowdown.

Provoke partners Microsoft and Oracle by threatening to put H-P's own operating software on PCs. Then decide not to. Remember that promising webOS software H-P bought in a $1.2 billion acquisition of Palm last year? Sideline it.


Announce plans to maybe sell the PC business. Or maybe spin off PCs as a stand-alone company. Uncertainty will damage the price.

Never mind the years of effort H-P spent -- including a controversial merger with Compaq -- becoming the world's largest PC maker. Never mind that the PC business feeds H-P's more profitable businesses. Dumping it is a beautiful absurdity that one analyst, Jayson Noland of Robert W. Baird & Co., described as "like McDonald's getting out of the hamburger business."

Watch Moody's threaten to downgrade H-P's credit.

Act surprised as H-P's stock plunges more than 40%.

Go to Wall Street and tell long, confusing stories about how you are transforming H-P from a low-margin to a high-margin business.

kage said...

clickable link to above quote How to Kill HP (original title: HP's one year plan)

Perhaps they could've also called it, How to Lose a Company in One Year or Less.

Anonymous said...

article from the wsj indicating the nervousness in HP's customers and Leo's influence on the stock price of the company:

stock price

Several H-P customers said they are most concerned about what they see as a lack of a clear direction from the world's largest tech company by revenue, signaled in part by H-P's decision to exit the PC business. H-P is currently the world's biggest maker of PCs by shipments and revenue.

"This appears to just come out of the blue without a really good explanation," said Frank Cervone, vice chancellor for information services at Purdue University Calumet in Hammond, Ind. "It makes you wonder what the strategy really is and where they are going."

Mr. Cervone buys servers and PCs from H-P, and was in the process of testing tablets from the company. He said that while he still plans to buy the servers from H-P, he will have to reassess his tablet plans. He is unsure how to proceed with a project for "thin-client" computers that store information on centralized servers, he said, something he would normally have worked on with H-P.

main article

Anonymous said...

CIO's damning criticism of Apotheker

Not Miss: HP CEO Leo Apotheker, a.k.a. The Cut Man

Nobody misses the hatchet man, especially one as spectacular as Apotheker. In less than a year as Hewlett-Packard CEO, Apotheker has managed to turn the iconic Silicon Valley company into a wreck with a dubious future. HP took a bath with its failed TouchPad, and Apotheker plans to spin off the PC unit. Heads are rolling. Even if HP comes out of this okay, Apotheker has spent his leadership capital.

HP CEO Surprise: Former SAP Chief Apotheker Takes Charge

HP Plans PC Spinoff, $10 Billion Autonomy Buy

7 Ways to Use HP Touchpads After They Stop Working

Why You Shouldn't Buy a Discounted TouchPad Tablet

Anonymous said...

HP Fires CEO Leo Apotheker, installs ex-Ebay CEO Meg Whitman as CEO

read about it at Reuters

"SAN FRANCISCO | Fri Sep 23, 2011 1:28pm EDT

(Reuters) - Hewlett-Packard Co named former eBay Inc Chief Executive Meg Whitman its president and CEO, replacing the harshly criticized Leo Apotheker in a bid to restore investor confidence in the iconic Silicon Valley company.

Anonymous said...

"Angry HP investors seen having slim case against HP board"

via Reuters

"Legal experts said directors are generally protected from making bad decisions that were done in good faith, so any shareholder lawsuit related to the executive shake-up likely would be a stretch. In addition, showing the door to the CEO of a company with a plummeting stock price is generally considered a sign of a responsive board."

"But Delaware, where Hewlett-Packard is incorporated, protects directors from being liable for poor decisions so long as they can prove they were not consciously trying to harm the business.

That standard protected the board of Walt Disney Co when it paid former CEO Michael Ovitz a severance of more than $100 million for less than two years' work.

The outcome of that case would likely discourage most plaintiffs from bringing a similar case against the board of Hewlett-Packard over Apotheker, according to attorneys."

kage said...

Where hath HP left WebOS!

It's now being released to open source, but with rights held back, and there is some nebulous talk of releasing hardware / tablets based on it at some vague time in the future!

Uninspiring developments for a technically impressive technology. Oh well, I guess this means that the best doesn't always win. Well, at least not in the short term!