Information Technology, software and computer companies are certainly not without their share of poor executive decisions and mismanagement. While dozens of notable examples could have made our list, these were by far the top top 10 worst in the history of the technology industry, causing many billions of dollars of lost revenue or resulted in the downfall of entire companies.
The year was 1982. British computer pioneer Dr. Adam Osborne, a man who has been universally credited with creating the portable computer industry announces the “Executive” OCC-2, the the successor to his current shipping product, the CP/M-based Osborne 1. In fact, over the next year, he also publicly discusses a second, smaller model, the “Vixen”, one which would follow on after that.
In the late 1980's, HP determined that their PA-RISC systems architecture for enterprise-class servers was going to hit a performance scaling threshold and began to investigate a new systems architecture, VLIW (Very Long Instruction Word).
While the Itanium partnership with Intel surely started HP down the road to hell, it was accelerated in 2001 when HP, under the guidance of CEO Carly Fiorina decided to merge with Compaq in a $25 billion dollar deal.
Mention the name "Windows Vista" in most circles, you'll probably get a mixture of reactions. Groans, snickers, and utter disgust.
Yahoo! grew rapidly during the early 1990's as one of the first search engine companies and went on a steady path of acquiring smaller Web companies and offering other Internet portal services such as financial news, web and image hosting (such as Flickr) but its failure to adapt to competitive forces, notably the rise of Google and FaceBook, caused the company's revenue to go into decline as it was unable to monetize these properties effectively.
Looking to expand its online presence, Microsoft made an unsolicited offer to purchase Yahoo! Inc. In February 2008 for approximately $47 billion. CEO and co-founder Jerry Yang, playing hard-to-get, formally rejected the bid, stating that it "substantially undervalued" the company and was not in the interest of shareholders.
Weeks of back-and-forth of highly publicized meetings between the two companies resulted in a standoff.
Shareholder and Yahoo! investor Carl Icahn attempted to patch things up in a last ditch attempt to get the Redmond-based software giant to come back to the table and attempted to force Yang out via a board room coup, but Microsoft CEO Steve Ballmer had enough and walked away completely exasperated, directing his company to create its own search engine and web properties under the Bing and Windows Live brands.
The company entered a round of heavy layoffs in 2008 following the failed merger attempt with Microsoft, and the market value of the company went into steep decline. As of September 2011, the market capitalization of Yahoo! Inc. has plunged to a low of $17.66 Billion, a far cry from Microsoft's original offer of $47 Billion.
Jerry Yang eventually found himself ousted and replaced with the very dynamic and outspoken CEO Carol Bartz in 2009, who ironically ended up entering a partnership agreement with Microsoft in a 10-year deal to use Bing as the search engine for Yahoo!.
Carol Bartz tried desperately to improve Yahoo's business, but was unable to turn the company around, whose initiatives had little support from her Board, and her tenure was marked by yet another round of heavy layoffs.
On September 6, 2011, the Yahoo CEO picked up her iPad and sent a broadcast email her employees, notifying them that the Chairman of the Board of Directors had just fired her via prepared company statement during an impersonal, cowardly phone call.
While Steve Ballmer and Microsoft's investors are probably quite happy in retrospect that they walked away, for Yahoo, it will always permanently scar the company for what might have been because Jerry Yang decided to play hard-to-get -- and it is questionable at this point the the company will ever recover.
In September of 2006, When Hewlett-Packard Chairwoman Patricia Dunn resigned after being involved a highly-publicized ethics controversy, the company sought to rebuild its reputation with the media and with stockholders. Mark Hurd, a member of HP's board of directors was selected to take Dunn's place.
With over 25 years of industry experience at NCR and two years spent as the company's CEO marked by strong leadership and improving the company's efficiency and net income, Hurd was thought to be HP's white knight.
Up until August of 2010, Hurd's tenure at HP was indeed a model one -- it remained the #1 vendor of desktop PCs and laptops, as well as maintaining its lead in consumer and enterprise printer market share. Hurd was also a major cost cutter, but this came at the expense of at 10% workforce reduction at the company, arguably a difficult decision for any CEO to have to make.
Under his leadership, the company also acquired EDS, a large IT services player, which would make HP on par if not a larger company than IBM, its largest competitor.
Additionally, with Hurd at the helm, HP also acquired Palm Computing for $1.2 Billion, which would enable the company to compete with Apple and Google in smartphones and tablets.
Things were looking up. At least until Hurd started prioritizing his activities as CEO with his other head.
Following an internal investigation of sexual harassment and misconduct with an HP contract employee, former reality TV actress Jodie Fisher, Hurd resigned in disgrace, only to land a job at Oracle, run by his close friend Larry Ellison, where he now leads what remains of Sun Microsystems.
Thrown into complete disarray, in September of 2010, HP's board of directors decided to recruit an outsider to run the company, Leo Apotheker, a former SAP executive. Apotheker's first ten months as CEO were largely uneventful, but things would soon change.
During the July 4th holiday weekend of 2011, HP's TouchPad tablet computer, the first product of the Palm acquisition engineered by Mark Hurd (who had resigned just under a year before) was finally released for $499 to highly unfavorable reviews. HP quickly attempted to price adjust by discounting the product $100, in the hopes that consumers would latch on.
Weeks went by without any news of the product's sell-through, until Mid-August, when it was reported that Best Buy had only sold about 10 percent of its inventory.
During HP's 3rd-quarter earnings call, and less than two months after the TouchPad's launch, Apotheker dropped a bombshell -- that it would be scuttling HP's mobile hardware division which produced the TouchPad, Pre and Veer WebOS devices, and would be looking for an alternative strategy for the mobile OS.
In addition, HP was announcing its intention to leave the PC hardware business, in hopes of becoming a more streamlined enterprise software and services company like IBM.
Whether it was Apotheker's intention all along to scuttle the last remaining vestiges of Mark Hurd's legacy is unknown, but many have speculated that he wanted to clean house since he started, and had been attempting to reverse over a decade of the company's mismanagement, starting with the Compaq merger completed by Carly Fiorina in 2002.
Unfortunately, Apotheker could not reverse the tide which was flowing against him. The reaction to scuttle the WebOS division and commit infanticide on the TouchPad and the new Pre phones was received overwhelmingly negatively, causing a race to the bottom when the company had a $99.00 per unit fire sale of all of its tablet computer inventory.
In the middle of September 2011, HP began a mass employee termination at the Palm division of approximately 500 employees. HP's stock continued to plunge, and it became evident that the Board of Directors needed to do something drastic.
On September 22nd, 2011, HP fired Leo Apotheker, and installed eBay founder and HP board member Meg Whitman as CEO, with the hopes of returning the company to a pattern of stable management and restoring the company's market value.
It's hard to say how Meg Whitman will perform as CEO, as she doesn't have the experience in managing a company the size and scope of HP, this despite having some background in consulting at Bain.
Will she continue the commitment to spin off HP's PC business? Will she sell WebOS or continue to develop it, with the hope of licensing it? Will the $10 billion purchase of Autonomy also proceed as planned? It's too early to tell, but something tells us the ride is far from over.