HP's Hurd: We have more work to do
Hewlett-Packard CEO Mark Hurd said the company has more cost cutting to do and is using data to become more efficient. "We have a lot more work to be done at HP," said Hurd, speaking at the company's analyst conference in New York City.
When looking at HP's efficiencies, Hurd noted that the company has costs of $84.3 billion and plenty of room to cut.
The end game for Hurd: Dictate pricing in the industry instead of reacting to it. In a not-so-veiled reference to lower cost technology suppliers like Dell, Hurd said:
"Many of you have been asking 'what if company xyz gets aggressive in marketplace?' Most the companies that respond are more efficient than we are today. We will get more efficient. We understand costs much more than we did a year ago."
Part of understanding HP's costs is putting analytics around the company's operations. For instance, HP is looking at IT costs by employee, site, and function. It also knows the cost of logistics by box, unit costs under various categories, costs out of data center and labor spend.
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Hurd said HP has a $1 trillion market to address in 2009, adding that the company is putting the same analytics around revenue growth as it does costs. If HP can use its scale, it may be able to dictate pricing in the industry and still boost the bottom line. The slide below from Hurd's presentation outlines how the company its three major business opportunities.
But as Hurd noted HP isn't anywhere near his efficiency ideal. "There's significant opportunity to improve. We've spent our time trying to understand what the highest scale company in industry should look like in 2009. We're not there yet."
One lingering question is whether a leaner and meaner HP will lower costs for enterprises. When asked whether there would be a moment where HP becomes aggressive on pricing Hurd said the following.
"There won't be a switch on moment. We did a lot of work in the year to improve our costs and improve our fixed nature of our costs. We will continue to align that model. There won't be a day when we say this is a new more aggressive HP."