mardi 26 juin 2012

HP To Mark Hurd: Please Come Back, All Is Forgiven


We recently compared, analyzed and evaluated the financial performance of Hewlett-Packard (HPQ) and Oracle (ORCL) since Mark Hurd was forced out. We have to agree with Oracle CEO and Founder Larry Ellison when he said that "The H.P. board just made the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago". Since Larry had co-founded Oracle, we believe he knows what he is talking about when it comes to technology talent. Consider the stock performance of HP and Oracle since Hurd was forced out for the alleged sexual harassment and expense account irregularities, we can see why Oracle snapped up Mark Hurd almost as soon as he left Bill and Dave's Garage.



 
Source: Morningstar Direct

THE CARLY FIORINA ERA
In 1999, HP CEO Lew Platt decided to retire from the company and the board selected Carly Fiorina to replace him. Fiorina was a highly visible "rock star CEO" from Lucent. Under Carly, HP engaged in the following initiatives to ramp up profits and EPS:
  • Spending $24.7B worth of company stock to acquire PC maker Compaq
  • Replacing highly skilled American technology professionals with lower cost H-1B visa holders and offshore outsourcing initiatives
  • Overseeing the spin-off of Agilent (A), HP's former performance testing business.
HP's EPS declined by 23% from 1999-2005 because these initiatives did not work out the way Carly conceived them. At least when Fiorina acquired Compaq, she led the changing of HP's ticker symbol from HWP to HPQ. We think Ann Livermore; a longtime and well-respected HP senior leader should have succeeded Platt instead of Carly. Livermore helped HP, known primarily as a hardware company, bring sharper focus to its services strategy when she took the reins of the newly formed software and services group in 1997. "One of the first things I worked on was to manage some of our services as a business," Livermore says. "At the time, services were given away for free. But there was a business opportunity for us to start selling services." When Hurd was forced out in 2010, maybe she should have gotten that job, instead of hiring Léo Apotheker.

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