Friday, October 28, 2011

HP's new CEO acts swiftly to resolve lingering strategic problem

Carter Lusher, Research Fellow & Chief Analyst, Ovum

AUSTRALIA: Ovum applauds HP CEO Meg Whitman for acting swiftly and decisively to eliminate the uncertainty surrounding HP’s intentions for the Personal Systems Group (PSG). The announcement by now former-CEO Leo Apotheker that PSG was undergoing a strategic review and could be sold or spun off was an unmitigated disaster.

Apotheker’s August announcement about PSG was a critical blow to his credibility after announcing in a much hyped analyst event only five months earlier how important PSG’s products were to HP. In addition, Apotheker said that the decision would not be completed until 2012.

Everything around the PSG strategic review decision sent shock waves of uncertainty through the enterprise and public sector IT executive circles as it called into doubt HP’s ability to execute a clear strategy for any product or solution. IT executives need insights into strategic vendors’ intentions in order to make multi-year commitments and HP’s actions called into doubt its stability.

Whitman demonstrates that she is not hesitant about reversing Apotheker’s decisions and that she will act swiftly. These are two characteristics that IT executives welcome as it shows that Whitman might be able to stabilize HP and return it to its previous status as a strategic supplier to IT.

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