Mark Hurd's Abrupt Departure from HP

By Don Reisinger  |  Posted 08-09-2010 Print


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Mark Hurd's departure as CEO of HP on August 6, 2010, was abrupt and left the company - and its customers -- reeling. According to a prepared statement released by HP, Hurd resigned after an investigation found that he violated HP's Standards of Business Conduct.

Interim CEO Cathie Lesjak (HP's CFO) and other executives are working to reassure customers, partners and Wall Street that, despite Hurd's abrupt resignation, the company is stable and on solid footing. They emphasize that the management team currently in place has been key to HP's success over the past five years.

Nonetheless, Hurd's departure leaves a massive void at HP that could directly influence CIO buying decisions going forward. The real question is, what comes next at HP? The company has its share of challenges, according a research report from Ezra Gottheil, a senior analyst with Technology Business Research. The world's top PC vendor is finding new challengers in the likes of Acer and Samsung, particularly among consumers and SMBs. Apple, with its iPhone offerings and iPad, also is a strong competitor, notes Gottheil. In addition, IBM will continue to challenge HP in such areas as R&D and being a provider of IT products and services to the largest enterprises.

In particular, Hurd has given the new CEO the opportunity to continue to grow HP's software business to help it better compete with IBM, Gottheil said. "There is an opportunity to revise the role of HP Software, reshaping the division from its current slow growth to become a driver of revenue and profit growth along the lines of IBM's Software division," he said. "This transformation will be a challenge, as IBM counts on software to add value to its hardware platforms, while HP currently uses its software to drive sales of its hardware--a position that sets up deep discounting in the very profitable software sale."


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