HP's Mark Hurd: Thinking about zeroes

HP's Mark Hurd: Thinking about zeroes

Summary: HP CEO Mark Hurd talks fast, walks fast and he’s a man in a hurry to fix HP, and the clock is ticking. During a Symposium ITxpo Q&A with Gartner analysts Carl Claunch and Leslie Fiering, Hurd gave his usual pitch, focusing on the fundamentals and execution pitch, doubling down on core enterprise areas—servers, storage and management software [watch a video clip].

TOPICS: Hewlett-Packard

hurd2.jpgHP CEO Mark Hurd talks fast, walks fast and he’s a man in a hurry to fix HP, and the clock is ticking. During a Symposium ITxpo Q&A with Gartner analysts Carl Claunch and Leslie Fiering, Hurd gave his usual pitch, focusing on the fundamentals and execution pitch, doubling down on core enterprise areas—servers, storage and management software [watch a video clip].

He reiterated that HP doesn’t intend to spin off the printer business or exit the PC space, and that the company would maintain its R&D investment, currently about $3.6 billion annually and yielding 11 patents a day.

Hurd is clearly a man of numbers. When he speaks, he often numbers the points in his response to a question, and is known to metricize (Hurd’s term) everything in what HP calls the total customer experience. One of the numbers that seems to be prominent in Hurd’s thinking about where to take HP in the next five years is zero.

First, he said CIOs won’t be satisfied until their IT budget goes down to zero. Secondly, he said that only companies with R&D can deliver another zero—a humanless data center. With long-term investments in servers, storage and management, Hurd is aiming HP at automating IT, taking the cost (much of it human) out and become the premier utility computing company. “At its core, HP has the best technologists on the planet Earth,” Hurd said. HP research is “focusing on trends, such as how far to push virtualization so you get true utility computing, how to push the management thesis farther, operatorless data centers and digital media centers that change the way media is pumped into the home,” he added.

He views IBM as his chief competitor. “I have been competing against IBM my whole career. It’s a good company, with good management and a good team. At the same time we have different strategies,” Hurd said. He describes IBM as having a mainframe ecosystem and more deep in management consulting. Sun, he said, needs to get its financial condition fixed and is less open than HP. “Our biggest issue is ourselves. Once we get our house in order we can be a little more proactive with our statements,” Hurd said, referring to making quips about rivals, like Sun CEO Scott McNealy likes to do.

He said the company is making progress in eliminating the previous matrixed organizational structure led to “lunatic conclusions,” with too many people touching a decision. “We need to make decisions closer to the customer. If we make a bad decision, change the person,” Hurd said. “More than anything about the new model is bringing clarity, accountability and responsibility across the company.” He estimated it would take four to five years for HP to build the “best” sales force.

He also described HP and Intel “ out on a peninsula” supporting the Itanium chip.

I have always found HP’s Adaptive Enterprise to be amorphous, more a statement of direction than a coherent set of products and services. Hurd was asked whether there was stood behind HP’s adaptive enterprise. He responded that he fully supports it as a framework. “It’s an appropriate framework. That said, we have to make sure we have the product deliverables against that framework. We have to do better there,” Hurd said.

Hurd was also asked about whether the services business was a margin enhancer or a real business. “There is strategic debate how far up the stack we go. BPO, business process outsourcing, is a very broad category. Like it or not at HP we are technologists, not executive compensation consultants. We will stay very focused on services as it relates to technology—such as call centers, IT outsourcing and managed services.” He added that to that degree HP doesn’t make all products, the company will partner for solutions and be agnostic about the technology.

Hurd talks a good game. The stock is up more than 30 percent, and the wheels are in motion to execute on his vision. Whether, HP will be the first or most successful company at deliving the holy grail of IT automation, remains to be seen, If HP fails it won't be because it didn't have the metrics or discipline to measure its progress along the way. It will because HP failed to “invent” the future.

Topic: Hewlett-Packard

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  • Numbers are better than vision

    Wall Street obviously would rather see a CEO who understands metrics than a charismatic saleswoman in an expensive suit spouting "blue sky" vision. Consider HP had to swallow Compaq, who swallowed Digital, Tandem and Microcom only a few years before.

    Imagine the complexity of merging not only the internal systems (email, compensation, HR, supply chain) but product lines, part numbering schemes, and in fact, the entire corporate structure from VP down to adminstrative staff.

    On top of that, mix in Corporate Culture differences that had never been resolved from the Tandem/Digital acquisitions, and you have a MIRACLE this company even operates.

    Hurd does not have an easy job, and there are no quick fixes. Hopefully he will not dance to the "day traders", and so far he seems willing to ignore calls to spin off Imaging and Clients. Good for him !
  • IBM doesn't sell mainframes, they sell services

    And the services then take mainframes or rackmounts or desktops to implement. We bought our point-of-sale system from IBM, and our warehouse system from IBM. Those applications run our business. We couldn't even get an HP rep who knew what the applications were, much less what our business needs were. Partnering? They gave us a phone number to call some noname software house. THAT was the extent of the partnering.

    Companies swing between the two extremes of insourcing and outsourcing. We keep the expertise around for a couple of "core" business applications, but how many different ways can you run a warehouse?? Who wants to reinvent that system for the nth time? If HP wants businesses to take it seriously, then they need to compete with IGS. Their original plan to buy PWC would have done it, but Carly couldn't make it happen. It doesn't sound like Hurd is even willing to try ...
    terry flores
    • A note on IBM

      IBM salespeople are second only to M$ (that's a complement). IBM sells Linux - but then does the bait and switch to AIX (Oh, THAT great feature ONLY works in AIX). IBM effectively has a monopoly on mainframes - they are the only manufacturer to make them (HP and Unisys long ago dropped theirs). THis gives them quite a healthy income from mainframes.

      Partnering? Sun always bent over backwards to be helpful - while HP started poor and improved to be able to compete with Sun. IBM still has the "call the IBM helpdesk" mentality - so we are having problems with the "partnering" with IBM. Did you work with only one person or a small team from IBM? Once you cross "borders" (i.e. Linux vs. AIX support), IBM loses all continuity and functions like separate organizations - with variable results.
      Roger Ramjet
      • IBM only mainframe ??

        What would you consider the Tandem NSK line ??
  • Autonomics

    Hurd is right about autonomics - eliminating humans from the data center should be a major goal for any company (sorry about the lost jobs Anton). The problem with Autonomics is that people take a top-down approach because its too difficult to understand the bottom-up approach. Unfortunately, this means buying software - a whole lot of it - and finding out later that its just too unmanagable. Simple things like naming conventions and which directories software gets installed need to be standardized for this to work - but NO ONE is looking at THAT level, so it never does work . . .
    Roger Ramjet
  • Guys!! They are taking about WIPING out more IT jobs!!

    Corporate America has decided that WE are their biggest
    expense!! They have decided that we are to be eliminated!! Our
    jobs!!! Our expeience and expertise thrown to the trash!! Who in
    the hell are THEY going to target next? What have we ever done
    to THEM?? Geez-ow! Even Bill G. is lying about more
    opportunities in IT.. as IT enrollments are DOWN everwhere
    because of the consistent slaughter of IT jobs around the
    country! It's not that I am anti-automation but apparently Hurd
    had heard the corporate mantra and seems more than willing to
    deliver.. First it was the blue collar workers and now we are not
    only in the crosshairs, we have a hole in our collective heart.. : (
    • Just like factory jobs

      Robotics has eliminated many (but not all) of the jobs in modern assembly plants. This would do the same thing for IT - A few experts would be left to tend to the software. I wouldn't be afraid of losing my job - I would be MORE afraid of SkyNet . . .
      Roger Ramjet
      • Job Eliminatation

        U.S. car companies could no longer afford $50.00 per hour and huge benefits to unskilled workers putting bolts in an assembly. The same think is happening in IT. Why pay some guy or gal $60K to patch Win2K every Tuesday when the process can be automated? Why have a trained IEEE certified engineer swap out failed Hot Plug drives?

        When you take the grunt work out of IT you free up the best minds to create and add value to the business. I think it is the plumbing (infrastructure) where automation takes place. The smart IT people will learn to write the business rules behind the automation. The workers who expect to continue earning premium pay for a task that can be automated will end up asking "want fries with that ??"
  • great