2 min read

The Hewlett-Packard shuffle

The company missed quarterly expectations. Now it's missing some key executivesrn



It’s taken almost four years, but we finally have the definitive sign that an IT recovery has begun: Companies are no longer allowed to use the downturn as an excuse.

Ever since CIOs and their bosses put a spending freeze on major purchases, vendors have used market conditions to explain everything.

Massive downsizing, R&D cuts, poor support services and outsourcing all seemed like natural reactions to the pressures OEMs faced. All it took was one recent unexpected earnings announcement to show the tide has turned.

However, no one, it seems, is willing to let HP off the hook that easily.

If this were 2002 or even last year, Carly Fiorina could have reported the poor performance of her storage and server businesses and moved on. Instead she’s had to make sudden, drastic cuts at the most senior levels to show she’s ready to respond to the problem.

Competitors, meanwhile, have been grinning from the sidelines, telling reporters they see nothing but strong demand. Even HP’s other excuse, a botched SAP implementation, didn’t win any sympathy. Everyone knows SAP projects are a nightmare, but HP should be able to show the rest of us how to do it right.

At the moment, it’s tough to say whether the executive shuffle will have much impact. No one explained why Peter Blackmore, for example, lost his job as head of enterprise sales while Anne Livermore, who holds overall responsibility for the Technology Solutions Group, escaped the axe. Maybe it was because Blackmore and the other two fired executives were holdovers from the Compaq era, while Livermore is an HP veteran. Perhaps Fiorina thinks replacing Blackmore with her chief marketing officer will allow her to reinvent the firm’s brand image and sales strategy at the same time.

A recent story in the Wall Street Journal defined HP’s approach to innovation as the middle of the road between IBM’s bleeding-edge experimentation and Dell’s nuts-and-bolts pragmatism. No one’s going to get kudos for being cautiously creative, but in many ways HP’s philosophy is in keeping with the times.

CIOs and IT departments have been browbeaten into aligning themselves with their businesses’ goals.

It’s no wonder that HP would be more interested in responding to the needs they have today while keeping one eye on the short-term challenges they’ll need help with later.

HP’s competitors are not wasting time, of course. Sun has launched a program dubbed “”HP Away”” to lure customers with steep discounts.

(In response, perhaps HP should create a “”Done with Sun”” migration program.) IBM will likely take a more subtle but by no means less persuasive approach.

That’s another reason why HP will be relying more heavily on its distribution partners. HP has been historically better at managing VARs than Sun, and the channel remains its best line of attack against IBM Global Services in the mid-market.

It’s time for Fiorina to revisit the Partner One program and cement some loyalty. If we’re really in the midst of a spending turnaround, HP had better start acting like it’s ready to make the most of it.