HP kicks out Apotheker, brings in Whitman

HP kicks out Apotheker, brings in Whitman

Summary: Former eBay chief and failed politician Meg Whitman is the new boss at HP, after the company sacked Leo Apotheker little more than 10 months after hiring him

TOPICS: IT Employment

Meg Whitman has been installed as chief executive and president of HP, following the sacking of Leo Apotheker.

Leo Apotheker and Meg Whitman

HP chief executive Leo Apotheker (left) has been replaced by Meg Whitman. Photo credit: HP/ZDNet.com

In a statement, HP said on Thursday that Whitman's appointment, as well as that of Ray Lane as executive chairman, followed "the decision that Léo Apotheker step down as president and chief executive officer and resign as a director of the company".

Apotheker had been chief executive since 1 November, 2010. During his tenure of just over 10 months, HP's share price fell 44 percent amid a raft of strategy changes. Apotheker's previous role, as chief executive of German software giant SAP, had lasted almost two years before that company decided not to renew his contract.

"I am honoured and excited to lead HP," Whitman said in the statement. "I believe HP matters — it matters to Silicon Valley, California, the country and the world."

"We are fortunate to have someone of Meg Whitman's calibre and experience step up to lead HP," Lane added. "We are at a critical moment, and we need renewed leadership to successfully implement our strategy and take advantage of the market opportunities ahead."

Lane described former eBay chief executive Whitman as "a technology visionary with a proven track record of execution" and "a strong communicator who is customer focused with deep leadership capabilities". He also pointed out that Whitman has been an HP board member for eight months, giving her "a solid understanding" of what the company does.

Shifting strategy

The nature of HP's products and markets is shifting, largely due to Apotheker's drive to have the company morph into an enterprise services firm, rather than a hardware maker.

I believe HP matters — it matters to Silicon Valley, California, the country and the world.

– Meg Whitman, new HP CEO

This strategy was exemplified by the three announcements in August: that HP would stop producing hardware based on the infant WebOS platform; that it would consider spinning off or selling its world-leading PC business; and that it would pay £7.1bn for the UK data analysis software firm Autonomy.

The market greeted these new strategic directions with scepticism. Analysts were also left confused when HP said it would roll out a final batch of the WebOS-based Touchpad tablet, to meet the demand caused by its end-of-line discounting.

"We very much appreciate Léo's efforts and his service to HP since his appointment last year," Lane said on Thursday. "The board believes that the job of the HP CEO now requires additional attributes to successfully execute on the company's strategy. Meg Whitman has the right operational and communication skills and leadership abilities to deliver improved execution and financial performance."

Enter Whitman

Whitman is best known for her role as chief executive of eBay from 1998 to 2008. During that decade, she oversaw the e-commerce company's growth into a web giant. However, she was also responsible for less successful decisions, such as eBay's disastrous $2.6bn (£1.4bn at the time) purchase of Skype.

After retiring from eBay, Whitman moved into politics for a brief spell. She stood as the Republican candidate for governor of California in 2010, spending $144m of her own money on a campaign that ended with the victory of Democratic opponent Jerry Brown.

Whitman's campaign was not helped by a scandal over her housekeeper and nanny, who turned out to be an illegal worker. She lost her election at the same time as former HP chief Carly Fiorina, a Republican candidate for Californian senator, was losing hers.

The first thing Whitman did on taking the reins at HP was to send out an email asking employees for suggestions about what to do next. HP's share price fell five percent on Thursday.

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Topic: IT Employment

David Meyer

About David Meyer

David Meyer is a freelance technology journalist. He fell into journalism when he realised his musical career wouldn't pay the bills. David's main focus is on communications, as well as internet technologies, regulation and mobile devices.

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  • HP's problem, it seems to me, is that it no longer has an idea of what it's for. Once, it stood for excellence in engineering and R&D - it was a real differentiator because, then as now, few companies spend what it takes to truly innovate.

    When Fiorina came in, all that changed and HP looked like it wanted to start looking like IBM. In doing so, its identity started to leach away. It didn't want to throw away the printer division cash cow, and the PC and server divisions brought economies of scale but much lower levels of profit than other divisions, to the annoyance of shareholders (never satisfied are they?). that it was floundering around seemed obvious when it went and bought Palm, which was clearly on its last legs. There was a time when the two-device (personal organiser and phone) vs one-device (smartphone) debate was raging. It was long over by the time this acquisition occurred in 2010, as was the fact that the phone biz was shaping up to be a two-horse race: Google vs Apple.

    This exemplified HP's situation. It had sliced away the R&D budget making fast innovation a thing of the past, so acquisition was the only way into what looked like a burgeoning market, but Palm had already failed.

    In the server market HP does much better: it leads but it's also very hard to differentiate your products. Buyers want homogeneity, commoditisation, and predictable roadmaps, not radically new solutions that imply the acceptance of a level of risk. A tough situation.

    What I'd like to see HP do is innovate again, to give its pool of talented engineers a freer rein. I fear though that this is highly unlikely as HP's finances (and the plunging share price demand a very quick fix. What would Bill Hewlett and Dave Packard have made of it all, I wonder?
    Manek Dubash