HfS Network

It's Meg Mitt-man as HP does a 180 with its Band-Aid plan

October 27, 2011 | Phil Fersht

Health plans, PCs... who cares?

Did HP recruit the right Republican? With the 180-degree strategy flip over the "sale" of its PC division, shouldn't HP have hired the master of the 180 himself? And is there a difference between "keep" and "couldn't sell"?

One can ask many questions as to why HP's new CEO made such a dramatic reversal of Léo Apotheker's decision barely two months' ago. There's nothing wrong with making "180's" with product and strategy decisions - the very best businesses in the world have been quick to admit bad decisions and correct them. Even the great Steve Jobs made some 180's in his career... but none of them in barely 2 months.

However, I believe the answer is very simple:  HP's board has had a deep look into its very soul, and had a very scary premonition of where it was headed. It saw its future existence without its heritage hardware businesses, becoming predominantly an enterprise IT services organization with a curious software acquisition.  Yes, it was running the risk of morphing into a me-too to IBM. IBM has just appointed a laser-focused services leader in Ginny Rommety to take them forward as a services mammoth. Enterprise services is IBM's DNA. HP has hired a politician and Internet auctioneer entrepreneur. Hmm...

Did Meg make the right call to keep PCs?  Yes - she probably did for three reasons:

1) No-one wanted to buy the division;

2) HP's board never really wanted to sell it;

3) HP's board was feeling naked and exposed at the prospect of rebuilding the firm without it.

The jury's out over whether Meg will turn around a famous company which is now struggling to save its tarnished brand.  It's an immense challenge and will take several months to see any real progress, but reclaiming part of its very soul - making personal computers - will help it rebuild its identity.

Posted in: IT Outsourcing / IT Services

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1 Comments

4 Comments

  1. Anonymous
    Posted 2011-10-29 09:37:36 | Permalink Reply

    I think you hit the nail on the head here, Phil. Clearly they were struggling to find any realistic buyers for the unit, but at the same time, you're right to question the board's will to sell it. Expect more confusion as Whitman tries to figure out what HP wants to be when it eventually grows up.

  2. Lawrence Hecht
    Posted 2011-10-30 11:17:51 | Permalink Reply

    I don't think most of your readers know that Mitt Romney and Meg Whitman worked together at Bain Consulting.

  3. Paul Singer
    Posted 2011-10-30 23:40:14 | Permalink Reply

    HP has lost its way. Not sure Meg has the vision or chops to make the decisions required to up-right the ship, IMHO.

  4. Phil Fersht
    Posted 2011-10-31 10:24:31 | Permalink Reply

    @Lawrence: I did not know that! Clarifies a lot of what I wrote :)

    PF

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