HP CEO, chairman reiterate commitment to hardware

New HP CEO Meg Whitman and Chairman Ray Lane stress support for HP's hardware business in the wake of ousted CEO Leo Apotheker's heavy emphasis on software and services.

In a conference call Thursday, HP Chairman Ray Lane and newly appointed CEO Meg Whitman reaffirmed HP's commitment to hardware .

Ray Lane--who is now executive chairman, a more active position than his previous role as nonexecutive chairman--began the conference call by stating that "as an active member of HP's board of directors for the past 8 months, Meg has a solid understanding of our products and our markets...as an executive chairman I will partner with Meg and support her as she leads the management team to improve execution and enhance accountability."

Whitman began by addressing questions surrounding the PC-centric Personal Systems Group (PSG). "With regard to the potential spin-off of PSG, we are committed to doing the work right now to determine the best path forward and expect the board to make a determination by the end of the calendar year if not sooner." That statement by itself is essentially no different than earlier statements by Lane and Apotheker.

Both Lane and Whitman then proceeded to emphasize their support for the hardware side of the business in the wake of ousted CEO Leo Apotheker's (who was removed earlier in the day) announcement on August 18 to form a strategy for HP "built on cloud, solutions, and software." At that time, HP also shuttered its WebOS hardware business and said that it was exploring the spin-off of the PC-centric PSG.

Though that strategy will remain in place, Lane and Whitman tried to assure analysts during the conference call that hardware matters too. "We have 120 billion dollars of hardware business that we care dearly about," Lane said in response to a question from an analyst.

Whitman chimed in too. "I want reiterate our commitment to the hardware business. The vast majority of the revenue of this company is still in the hardware business. Whether it's servers, networking equipment, you name it." Whitman said.

At the end of the call, Lane volunteered a comment that provided more insight into his thinking about PSG. "On the PSG question, our intent all along was to look at whether there was a benefit to investors or to customers. In fact, I even imagined that a spun off PSG would carry an HP brand with it and that it would be stronger for customers than inside. Meg and I have talked about it a lot and that is still our desire. [But] if it cannot be stronger on the outside--delivering better equipment and technology than our competitors--it stays inside."

Both Whitman and Lane also commented on HP's stewardship under Apotheker. "I know HP has disappointed investors in recent quarters and we're not happy about it. We understand that our performance is under intense scrutiny. And we will take the necessary actions to get HP back on track," said Whitman.

Lane cited three issues. "This is a big, big company that requires the executive team to be on the same page. We didn't see an executive team that was working together," Lane said. The second problem was "operating execution...the ability to get down deep into the businesses and understand the dynamics," he said. "Third was communications. We struggled in the August 18 announcements...with clear, concise communications," he said.

About the author

Brooke Crothers writes about mobile computer systems, including laptops, tablets, smartphones: how they define the computing experience and the hardware that makes them tick. He has served as an editor at large at CNET News and a contributing reporter to The New York Times' Bits and Technology sections. His interest in things small began when living in Tokyo in a very small apartment for a very long time.

 

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