It’s official: Apotheker is out, Whitman is in at HP

Over the span of about a day, we’ve gone from rumors about a possible CEO change at HP to an official announcement, which names former eBay CEO (and HP board member) Meg Whitman as the new president and CEO of HP. The company’s board, it seems, was in a hurry to give Leo Apotheker the boot—the change in leadership is effective immediately.

HP’s official announcement is short and sweet, and it includes this statement from Ray Lane, who ascended to the title of Executive Chairman of the Board today:

“We are fortunate to have someone of Meg Whitman’s caliber and experience step up to lead HP,” said Lane. “We are at a critical moment and we need renewed leadership to successfully implement our strategy and take advantage of the market opportunities ahead. Meg is a technology visionary with a proven track record of execution. She is a strong communicator who is customer focused with deep leadership capabilities. Furthermore, as a member of HP’s board of directors for the past eight months, Meg has a solid understanding of our products and markets.”

Lane adds that HP’s board members “very much appreciate” Apotheker’s efforts as CEO, but the post “now requires additional attributes to successfully execute on the company’s strategy.”

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    • ronch
    • 8 years ago

    By the way, in the picture, Meggy looks real happy. Is it because she’ll now ‘have the opportunity to lead HP and create better products for consumers, as well as increase shareholder value (well, you know, all that bs)? Oh wait, she’s also going to receive a hefty paycheck. Milk the cow while it’s still alive.

      • kvndoom
      • 8 years ago

      Thing is… if I was a billionaire already, I wouldn’t be taking an 8-figure high-stress job. I’d be enjoying my money somewhere. She’s already 55, life’s too short. But maybe for some it’s the challenge.

        • willmore
        • 8 years ago

        That’s because you’re not the hyper type-A personality that would *make* a billion dollars in the first place.

    • trackerben
    • 8 years ago

    Not everything we see in the news is what’s going on. We shouldn’t be surprised if HP’s leaders are quietly engaged in shopping advantages from HP’s huge footprints in large markets and industries, for consideration. It’s already dawning on commentators that HP played a nice spoiler to both Google’s and Samsung’s combined drives to compete with Apple. Mutually beneficial side arrangements between these two Santa Clara firms may yet emerge to eventually explain much of HP’s and Apple’s recent behaviors.

    HP had monthly contracts for components for millions of new devices, and when Apotheker and the Board realized it wasn’t working out may have decided to mine the supply base to extract some profitable contingencies. Apotheker is from an MRPS competency most skilled at figuring out the lay of the supply chain land in most industries. My guess is that and he and his contacts may have found their temporary calling here – and not only for HP’s benefit. The excessed capacities are an opportunity to other makers if HP retains some control over their relegation. If these were now made available to either Apple or Samsung with HP’s “blessing”, the balance of supply constraints between the rivals alters, allowing greater volume and/or margins for whoever may have better compensated HP for passing on these capacities – or even just sidelining them.

    A bit of the same could be partly said of WebOS, not just for its IP but moreso for playing the platform as a strategic foil to shape an emerging industry, in the ways the old IBM used to do when it sported collections of OSes to fend off future competition.

    • Thresher
    • 8 years ago

    A few miscellaneous comments:

    1. They hired Leo Apothekar without even meeting him first. This is the same guy that was fired from SAP, a company the board seems to want to emulate.
    2. eBay seems to have succeeded DESPITE Meg Whitman, not because of her. The market was ripe for the service eBay sells. Her few gutsy decisions, like buying Skype, were a disaster.
    3. It doesn’t sound like they interviewed or really spent any time with Whitman before hiring her (see comment 1).
    4. The board for HP has been at odds with the families of the founders since the Carly Fiorini decision and the company has basically been adrift since then.
    5. HP wants to bet the future on software and support. Just like SAP, IBM, Oracle, etc. Just how big do they think this market is? While the hardware side is not that glamorous, it was a steady money maker. I think all this post-pc nonsense scared them into making a rash, unwise decision to leave their core market.

      • Anarchist
      • 8 years ago

      regarding point 3, … Whitman have been a board member since January so they’ve had ~ 9 month to interact with her. Having said that the way HPQ is doing things does not inspire confidence that they know what they are doing …

        • paulWTAMU
        • 8 years ago

        so she’s part of the same board that’s already been fouling up recently? that gives me great hope 🙂

        • A_Pickle
        • 8 years ago

        [quote=”Anarchist”<]Having said that the way HPQ is doing things does not inspire confidence that they know what they are doing ...[/quote<] They have PC hardware and PC software business units. They then bought Palm, with it's mobile hardware and mobile software units along with one of the best mobile operating systems in the world. They also had billions of dollars to invest into each. Then, they screwed that up. HP is a circus. I'm interested to watch it die, because honestly, I can't imagine how a company gets handed everything it needs to be a strong, serious competitor to Apple and fail at it.

    • PeterD
    • 8 years ago

    How are the shares doing now?
    I’ll guess they’ll go up., but that might be temporarily.

    • Hattig
    • 8 years ago

    “implement our strategy” – I hope that this isn’t the same strategy that Apotheker was trying to follow – i.e., commit corporate suicide by reducing R&D in a company that has traditionally been centred around R&D.

    But I don’t hold out much hope. The board is clearly not very capable at decision making as proven by their previous CEO appointments.

      • ronch
      • 8 years ago

      I think their new strategy is to build a spaceship, put everything HP has in it (including people), and drive the spaceship straight into a black hole.

    • destroy.all.monsters
    • 8 years ago

    RIP HP.

    Where’s the stockholder revolt? Meg’s got no experience in this kind of business – and the people of California gave her a no confidence vote as governor. Her time in the sun is over. Until this board is gutted there is no hope for the company.

      • PeterD
      • 8 years ago

      You could be right.
      Apotheker was a software man.
      And Whitman is a software woman.
      It could be the wrong choice again.

      Although it could be the correct choice.
      Maybe she has to sell the PC division. 🙂

      • bwcbiz
      • 8 years ago

      The stockholder revolt was over the past months. Price dived from the 40s to the 20s.

    • Ryszard
    • 8 years ago

    Best front page image for a story ever, haha!

      • just brew it!
      • 8 years ago

      Meg says: “How much do I love the HP board for giving me this incredible gig? I love them [i<]this[/i<] much! Unless I do something [i<]really[/i<] deranged -- like torturing puppies and kittens, or starting World War 3 -- I can't [i<]possibly[/i<] look worse than the two idiots who had this job before me!"

    • FubbHead
    • 8 years ago

    “Apothecary here.” 🙂

      • dpaus
      • 8 years ago

      Apothoclypse Now?

    • ronch
    • 8 years ago

    It’s always celebrations when someone gets ushered in for a big position. It’s a totally different matter when stock prices start moving down and motives/decisions are questioned. Then again, HP’s board are a bunch of morons so you can’t totally blame the CEO if he/she gets thrown out (but Apotheker is an exception).

    And…

    [quote<]Furthermore, as a member of HP’s board of directors for the past eight months, Meg has a solid understanding of our products and markets.”[/quote<] Solid understanding after... 8 months? I read somewhere that [u<]none of HP's board members even bothered to meet Apotheker prior to his hiring[/u<]. And now this. You know HP, just fire your board members. They keep fighting among themselves. Whoever they choose to be their next CEO is doomed to get things wrong (with your approval) and thrown out too anyway.

    • ShadowEyez
    • 8 years ago

    One article said she actually established a suggestion box. As long as the stock price does well…

      • ronch
      • 8 years ago

      First suggestion : stop charging 10x the production cost for your crazy ink!

    • LoneWolf15
    • 8 years ago

    As I said in another forum, HP cannot choose a CEO to save its life. Which probably means the board is filled with people who just don’t get it, either.

    I predict that Meg Whitman will be another Carly Fiorina. I’d probably be willing to stake a modest bet on that –and I think of Carly as the beginning of HP’s downward spiral, which hasn’t stopped since her resignation.

    Bill Hewlett and Dave Packard, your company sorely misses you. It is in more dire need of a quality rudder than any ship in history.

      • ludi
      • 8 years ago

      I don’t think she’ll be a Carly as such. Fiorina’s problem was that she wanted to run a KISS concert in a Southern Baptist church.

      Whitman’s problem is that the first words out of her mouth were to defend the general direction that Apotheker had established. Meaning, she will continue turning HP into some sort of Super Eight Ball, where the answer to “What’s your strategy this week?” will be “Don’t know, let’s turn the entire company upside down and see what floats to the top first.”

        • just brew it!
        • 8 years ago

        [quote<] Meaning, she will continue turning HP into some sort of Super Eight Ball, where the answer to "What's your strategy this week?" will be "Don't know, let's turn the entire company upside down and see what floats to the top first."[/quote<] That nearly made me shoot beer out my nose! How true, though... Jeez, this sort of craziness makes me feel a little better about where I work. In spite of all the lunacy I deal with on a daily basis, at least we seem to have something resembling a business strategy, and a well-defined target market. I guess things could be a [i<]lot[/i<] worse!

        • bwcbiz
        • 8 years ago

        I can see getting out of the consumer PC business: The margins don’t justify the volatility. But based on the response to the $99 Touchpad, there’s a market out there in Mobile that they just don’t know how to reach. Maybe there’s a cadre at the board that can’t stand to be the discount version of Apple when it comes to hardware. And doesn’t have a clue how to upscale the brand image in a way that allows HP to charge the premium it thinks it deserves.

        And Ms. Whitman doesn’t seem like the person to solve these problems. She may be able to pull of the evolution of HP Software and HP ES/EDS into something more nimble that can compete in the SaaS age, but that’s pretty unlikely. That transformation will take someone who doesn’t have the corporate IT mindset of “First, cover my ass.”

          • kvndoom
          • 8 years ago

          The “response” to the $99 Touchpad wasn’t because it was a Touchpad, or that it was built by HP, or that it had WebOS. It was because it was $99, period. There wouldn’t have been the need for a fire sale in the first place if the things had been selling prior to the blowout.

      • Suspenders
      • 8 years ago

      Absolutely right, unfortunately. The people running the show over there don’t seem to understand what HP is.

      [url=http://www.hpalumni.org/hp_way.htm<]So much for "the HP way"[/url<]

    • Geistbar
    • 8 years ago

    I wonder how long until she is gone as well. It seems they do not realize that constantly changing CEOs is probably just as damaging as having a bad one; changing direction every few years only leaves a company with a dozen half-finished-then-abandoned ideas.

    I suspect that the game of musical CEO will not end unless HP gets a CEO who is mostly content to stick with the various markets it is already invested in.

    • just brew it!
    • 8 years ago

    [quote<]Lane adds that HP's board members "very much appreciate" Apotheker's efforts as CEO, but the post "now requires additional attributes to successfully execute on the company’s strategy."[/quote<] ...and that would be...? It sure doesn't look like they have a strategy to me. Unless you call "completely destroy a company which was once one of the most respected in the entire tech industry" a "strategy".

      • Geistbar
      • 8 years ago

      To give them credit, they are succeeding admirably at it. The question is just if it is intentional or not.

      • paulWTAMU
      • 8 years ago

      They’re doing a damn good job of executing that strategy.

      What the hell makes them think changing CEOs like underwear will help?? Jesus. Everytime someone says they want the government run like a business I think of HP–you really can get dysfunction in the private sector!

      • ronch
      • 8 years ago

      I suppose this is evolution. Out with the old, in with the new.

        • FubbHead
        • 8 years ago

        I dunno.. She doesn’t look that “new” to me. 🙂

          • ronch
          • 8 years ago

          I meant HP. they’re going down!

      • bwcbiz
      • 8 years ago

      Actually, there is a strategy under there, but they haven’t been executing tactically. It’s been clear since Hurd bought EDS that they want to move away from the low margins of PC hardware and find an area of the IT industry that provides high returns with not to much investment. I think they went with Palm because they thought they could build an App Store and developers would come, and they’d have the high margin cash cow that they’re really trolling for.

      Since the last gasp of Palm’s mobile products wouldn’t sell at the price point they wanted, they’re stuck with ditching the consumers and concentrating on the enterprise market with its markups and service.

      About the only thing I see Ms. Whitman bringing to this table is the experience running service-oriented organizations like eBay. Maybe she can revamp HP Enterprise services (again). But I don’t recall her achieving much satisfaction at eBay for anyone but Wall Street.

    • 5150
    • 8 years ago

    Too late. HP is already dead to me.

    • UberGerbil
    • 8 years ago

    It’s too bad there isn’t a richer market selling popcorn to technology news watchers, because HP pretty much has it cornered.

    • rndmuser
    • 8 years ago

    It’s not the CEO they should’ve changed, but a whole board of directors instead.

      • sweatshopking
      • 8 years ago

      umm. no. he should have gone. whether they should have gone as well is a different question.

        • riviera74
        • 8 years ago

        Leo is a scapegoat. He was hired to ditch PSG from the rest of HP. Fire the Board first, then change your strategy.

    • sluggo
    • 8 years ago

    The HP board needs to take a good hard look at itself and figure out how this colossal f-up happened in the first place. Apotheker had no business running SAP (where he had already been fired), much less HP.

      • Ragnar Dan
      • 8 years ago

      And they’ve been through a lot of CEO’s in the last decade or so. If we still had even the moderately free market we had in the 1980’s, this company would have been bought out and the board fired by now.

        • sweatshopking
        • 8 years ago

        oh, if only we could return to the glorious Reagan years….

        i hope the +2 people realize i’m being sarcastic….

        • riviera74
        • 8 years ago

        The real reason HP was hot bought out is NOT because of the government. The real reason has to do with a severe lack of corporate raiders bent on takeover, purge and resell. The junk bond market, which fueled all those takeovers in the ’80s, had changed a lot by 1990. Moreover, nobody wants to do this anymore. There is a lack of ambitious people who want to take over ailing companies now. Moreover, the rules are increasingly biased towards management at the expense of shareholders. Blame Delaware for that, not the federal government. Also, the most ambitious want to build their own empires rather than conquer an ailing one. HP’s decision to shed PSG may or may not be wise, but dumping Leo for Meg Whitman is silly, especially when the BoD is still married to the same strategy.

          • yuhong
          • 8 years ago

          It didn’t do any good anyway and in fact did a lot of harm which still remains today, because for one thing the takeovers were based on stock price, which was flawed (for one thing, it led to the flawed quarterly earnings game). Reminds me of this:
          [url<]http://blogs.hbr.org/hbr/hbreditors/2011/07/shareholder_capitalism_is_dead.html[/url<]

        • ludi
        • 8 years ago

        Uhm, they passed the $100 billion mark a few years ago. Buffet isn’t stupid enough to buy them, and Soros prefers to play with hedge funds. Who do you propose will bankroll the buyout?

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