HP has had a tumultuous decade or so, with current CEO, Léo Apotheker, the company’s 7th since 1999 – and their share price being halved ($42-$22) since he took over 11 months ago.
Apotheker’s reign has seen the company running around like a headless chicken, as it first acquires Palm and moves into the tablet and smartphone arena, possibly to compliment its PC business, but then just a few months later they change direction completely and have stopped making these new devices, and they may be about to sell off their PC business entirely. To move from consolidating and expanding one side of their business to stopping production and attempting to sell or spin off that division is quite a U-turn in just a few months – and the markets have punished them.
Apotheker came to HP from SAP, and came to HP along with chairman Ray Lane less than a year ago – and he just doesn’t seem to have got to grips with running such a multi-faceted company. It appears his lack of ability in this area only dawned on him when HP failed to sell many TouchPads and Pre3s – and he attempted to refocus the company on an area he did understand – enterprise software and operations, in direct competition with SAP. Whilst its true that HP makes much of its profits from that side of its business, its strength was always in its breadth of offerings – they could supply a company with their entire IT infrastructure, the PC terminals, and the printers – making them a one-stop solution. Yes TouchPads and Pre3s were a step away from this, but they could have complimented their PC line – and Pre3s could have been the BlackBerry replacement – giving companies’ telephonic integration as well.
The HP board do, finally, appear to be waking up to the fact that Apotheker was never the right man for the job – although it took them until he’s made the company look direction-less, and dented their reputation with confusing tactics. The acquisition of software provider Autonomy for $10 billion didn’t help either, and if they weren’t clear at that point – the market stepped up and wiped $12.5 billion off the value of the company as a response.
As to who could replace Apotheker – that is a more difficult question. Just the rumour that he may be replaced sent HP’s share price soaring, remaining up around 7% in after-hours trading, but there are various pointers that it may be current HP director and former eBay CEO Meg Whitman. She did help make eBay the success it has become, but she also seemed to want to be out of leading businesses as she attempted (and failed) to move into politics. Her as even a temporary CEO may steady the ship though, which is the best HP can hope for at this point, let alone live up to their tagline and actually “invent”.