With HP’s high-flying CEO Carly Fiorina departing, the company’s woes are well known. But how did a firm with such a storied history and vast assets get headed down the wrong path, and what do they need to do to set their course straight?
Introduction
As the author of this piece, I’ll state that I
have never worked for HP or for any of its acquisitees, but I’ve kept a
close eye on the firms for more than 20 years. I’ve delivered hundreds
of presentations at user group events worldwide, written reams of copy
on the firms, and have gone out of my way to be fair and objective when
dealing with the companies. I’ve also invested substantial time and
effort in the process. People inside HP may view things differently,
but here’s what this expert outsider opines about HP and its current
state of affairs.
The Coronation — and Abdication — of Queen Carly
Carleton Sneed Fiorina took the helm at HP in 1999, having been deemed
“Perfect Enough” for the job. Six years later, the decision proved to
be a definite “backfire.” On 9 February 2005, HP’s Board of Directors
requested Fiorina’s immediate resignation, allegedly for her failure to
execute her corporate strategy in a timely manner. Since she resigned
rather than being officially terminated, she received $45M USD worth of
stock options and severance pay on top of her regular salary and cash
bonuses after five years at the company, an HP spokeswoman said.
During her tenure at HP, Carly drove the share value of HP stock down
by ~58 percent, and failed to return the firm to growth mode. She also
blithely ignored the rationale that led to HP’s acquisition of Compaq.
In early June 2001, about two weeks
before the “Alphacide,” then-Compaq-CEO Michael Capellas penned a three thousand word missive
advising the entire Compaq workforce that in order to compete with IBM
at the high end and Dell at the low end, Compaq would have to
“reinvent” itself in a 180-day timeframe. The emphasis of the memo was
on commoditization, industry standards, focus, and agility.
Two months later, Michael and Carly started talking seriously about a
merger. Only by combining forces could the firms create a corporation
endowed with the size, scope, and clout to take on IBM. The
negotiations took place in deep secrecy, and in a September 4
teleconference the two companies announced what they termed a “definitive
merger agreement” that would create an $87 billion technology colossus — an
entity capable of competing on a more equal footing with IBM. The
Silicon Valley Soap Opera began, and the acquisition of Compaq was
successfully completed on 7 May 2002. May 7 represented the day a good
idea was cast in stone. It also represented the initiation of an
absolutely atrocious execution strategy.
Invent — or Repent?
Capellas and Fiorina agreed that achieving parity with IBM was
instrumental to the consolidated firm’s long-term future. Compaq
invested very little in R&D; HP spends close to $4B USD on its HP Labs
operations. According to one former HP Labs engineer (name withheld by
request) who bailed out in 2003, competing with IBM slipped Carly’s
mind. “I remember the first time [Carly] walked into the HP labs. She
said that our new company slogan was “Invent.” Then she told us that
the technology industry would never again be as exciting and profitable
as it was in the ’90s — I knew from that moment that HP’s best days were
behind us,” the engineer lamented. Carly was a marketing person put in
change of engineers, a person who cared nothing about the art and
beauty of technology. She just wanted saleable stock to bring to
market, the engineer opined. And we all know what happened to HP’s
share value during the Fiorina Fiefdom.
Blown Away By Big Blue
IBM sells servers, storage, software and services. And they do a damn
good job of it. One would expect that HP would attempt to emulate IBM
in this regard, but such expectations proved way off base. Instead of
jettisoning a flagging PC business and concentrating on emulating IBM,
HP let the StorageWorks franchise spin down (Eckhard Pfeiffer did a
good job setting StorageWorks up for failure.) Things went from bad to
worse when HP took over.
HP pressed on with the Compaq strategy, which involved trying to duke
it out with Dell in the PC space. Concurrently, HP branched off into
bold new “ready, shoot, aim” ventures replete with daunting entry
barriers. IBM built servers, HP tried to build a home entertainment
franchise. HP resells iPods and is now a player in the plasma TV
business: a realm replete with well-entrenched rivals, while IBM
continues to dominate its carefully chosen and well-defended turf.
Building the Perfect Bureaucracy
HP has succeeded admirably in one regard: the firm has demonstrated an
uncanny ability to build a bureaucracy more rapidly than the United
States government. For all its talk about business agility and adaptive
enterprise technology, HP can make prudent midcourse corrections at the
speed of an aircraft carrier, not a BMW. The firm can, however,
reorganize at a moment’s notice, and has honed this skill to the same
extent that Digital and Compaq once possessed.
Marketing: Style over Substance
The firm has also imposed rigid consistency where it is needed least.
Where HP should be dynamic, it is static. Take marketing communications and message delivery: HP spends
some ~$300 million per annum on marketing and marketing communications.
Where these marketing dollars go is only known to HP. The firm just
sacked an employee who was without a doubt the firm’s most effective
message delivery system, which probably saved HP $150K or so per
year. The opportunity cost inherent in lost sales opportunities is
impossible to quantify, but the price will likely exceed the $150K
figure by several zeroes. Perhaps the sacking was due to the fact that
the employee in question failed to adhere to every aspect of the
132-page document HP created to instruct presenters on how to create a
“One Voice” PowerPoint presentation that emphasized style at the
expense of substance.
Change in the Wind?
Effective 14 February, and in a personal decision totally unrelated to
Ms. Fiorina’s ouster, HP’s senior VP of marketing Allison Johnson
announced that she was leaving HP to take a top marketing post at Apple
Computer. She will become VP of worldwide marketing communications,
reporting to CEO Steve Jobs. At Apple, Ms. Johnson will be responsible
for Apple’s global advertising and related efforts. HP Chief Marketing
Officer Mike Winkler said that for the time being, the leadership of
HP’s corporate marketing team will report to him until a successor is
recruited.
At HP, Ms. Johnson served as VP of global brand and communications,
before being named senior VP as HP launched its plans to buy Compaq. At
HP, Ms. Johnson’s role stretched beyond marketing under Fiorina. One
former co-worker described her as the “prime minister” of HP. Ms.
Johnson was one of Fiorina’s closest advisers at the company, having
led the firm’s PR campaign during the turbulent proxy battle over the
acquisition of Compaq Computer Corporation She also engineered the “+HP
= everything is possible” advertising campaign that followed HP’s
acquisition of Compaq. It will be interesting to see if Ms. Johnson’s
successor takes a new approach, Case in point: HP’s Business Critical
Systems (BCS) franchise, which builds high-end enterprise servers based
on the Itanium architecture, reported a whopping 1.8 percent profit
margin in 1FQ05. That’s a half percent lower profit margin than the PC
Group reported in the same period. If HP and Intel don’t get their
Itanium act together right now, market as if the firms’ mutual success
depends on getting into customers’ faces, using a pair of pictures to
explain why Xeon64 and Opteron are recent upgrades to 25-year-old
technology, and educating customers about the added-value of Itanium,
the companies will learn a very painful lesson and HP may well be
forced to abdicate the high-end space dominated by IBM. Time will tell
if HP opts to take an aggressive, proactive, FUD- busting stance.
Upper Caste or Cast Off?
It is my opinion that HP-heritage employees are held in much
higher regard than Digital or Compaq expatriates. The expatriates are
far more vulnerable to “rightsizing” than those who have never fallen
astray from the HP Way. And if industry rumors are correct, HP’s
workforce underwent a significant quarterly decline during its 1FQ05
ended 31 January 2005. Significantly, HP made no mention of current
headcount when the firm reported its 1FQ05 financials on 16 February.
The firm did, however, promise more “rightsizing” in the current
quarter and beyond.
The HP Way: Strategy or Stratego?
Stratego is a two-player board game board game from Milton
Bradley. HP has far more than two players, but numbers of people at HP
are responsible for corporate strategy; which, like the board game,
involves lengthy conflict with rivals and requires skillful planning.
The question is WHO are the people at HP tasked with strategizing?
According to the HP Web site, Executive Vice President and Chief
Strategy and Technology Officer Shane V. Robison is responsible for
shaping HP’s overall corporate strategy and technology agenda, and
steering the company’s nearly $4B USD annual research and development
investment. All of the company’s senior CTOs and the director of HP
Labs report to Robison. He also leads the company’s strategy and
corporate development efforts, including mergers, acquisitions,
divestitures and partnerships. Clearly Shane plays a key role in
calling the shots at HP; we can only wonder who beyond Shane and the
Board of Directors are involved in developing and executing corporate
strategy. When you’re formulating and executing strategic decisions
that affect approximately 150 thousand employees and your company’s standing in the IT
industry, you’re not playing games. The entire strategic chain of
command at HP warrants a stringent performance review, as things most
certainly are not going according to plan.
Many Challenges
All of the above consists of a combination of factual information and personal
opinion–and one rumour about headcount reduction. It is not my
objective to malign or disparage anyone at HP. Perhaps things look
different from the inside, but from the outside, there is plenty of
justifiable cause for concern about the future of HP. The firm’s latest
financials demonstrate that the areas in which HP must concentrate to
compete with IBM are largely weak. HP’s Business critical systems (BCS)
revenue declined 2 percent and networked storage revenue was down 1
percent. Within BCS, HP-UX revenue growth of 3 percent year-over-year
was more than offset by NonStop revenue declines of 19 percent and
ongoing, fully expected, declines in AlphaServer sales. In 3FQ04,
StorageWorks revenue declined by 15 percent, this slowed to 10 percent
in 4FQ04, and the decline nearly halted in 1FQ05. Competitors such as
EMC have captured significant market share, so storage still faces an
uphill battle. HP’s software business consists largely of OpenView and
OpenCall management software, and a subset of the components necessary
to bring the Adaptive Enterprise strategy to market. HP lacks a
middleware strategy, and thus is at a further disadvantage against
IBM.
And a Few Opportunities
That said, HP possesses the services capabilities it needs to compete,
and the financial resources to flesh out its software portfolio, but
nobody outside the installed base seems to be aware of these assets.
For example, the OpenVMS OS franchise, including hardware, peripherals,
add-ons and services, represents nearly $4 billion in high-margin (>50
percent) revenue and is arguably the only “proprietary” OS in growth
mode due to its bulletproof characteristics. Some 400,000 customers run
the OS, yet HP refuses to aggressively market this cash cow. HP and its
new CEO face a daunting challenge: deciding where the firm should best
allocate its resources to delivering on the strategy that Michael
Capellas and Carly Fiorina formulated almost half a decade ago.
About the author:
Terry Shannon has well over 20
years experience in the IT industry as a journalist, analyst, and
consultant. A frequent speaker at IT events worldwide, Shannon has
delivered more than 300 keynote and plenary presentations, and is the
author of one book and hundreds of articles in the IT trade press. A
former military intelligence analyst in Viet Nam, Mr. Shannon has an
additional 10 years hands-on experience operating, programming, and
managing hardware and software from a variety of vendors. He currently
publishes the Shannon Knows HPC subscription-based newsletter and
maintains a web site at http://www.shannonknowshpc.com. He can be
reached at [email protected] .
Interesting article. It seems to be lacking in evidence – like internal memos, documents, etc. At least reference them “according to internal memos…”.
Also, is it just me or is this article very similar (almost identical) to the one published yesterday at the Inquirer? http://www.theinquirer.net/?article=21608
It’s even written by the same guy!
“But how did a firm with such a storied history and vast assets get headed down the wrong path, and what do they need to do to set their course straight?”
The same as most. Forgot their roots, and valued money to the detriment of all else.
IMHO,
They went wrong when they bought Compaq who went wrong when the bought Digital.
There was so much overlap in the HP & Compaq business as well as Compaq not really knowing what to do with most of DEC as well as Tandem etc.
Another IMHO, HP & DEC would have been a better fit as they were more Engineering led companies while Compaq was a pretty competant White Goods maker.(commodity PC’s etc)
The overall result if this menagerie was that HP top brass got distracted trying to keep Wall St happy and let key/core parts of their business go down the pan. The Itanic disaster did not help either. How much did they pour into Intel’s coffers over the last 10 years?
IANAL/IANAFA etc.
Disclaimer…
I was at DEC for 19 years and 1 year with the merged DEC/Compaq. I got out when I saw the writing on the wall that was coming out of the Texas bean counters.
end disclaimer
It’s strange why Compaq bought Digital and hence acquired Alpha. If the article is correct and that Compaq didn’t spend much on research, why bother with Digital? Seems like lack of planning and foresight to me.
article and read, thanks.
It’s strange why Compaq bought Digital and hence acquired Alpha. If the article is correct and that Compaq didn’t spend much on research, why bother with Digital? Seems like lack of planning and foresight to me.
HP bought DEC, and then HP later merged with Compaq. or something like that. it was an indirect acquisition on the part of Compaq.
Whatever anyone says, Carly has achieved something huge : A mega merger and the associated personal pride. Most mega mergers or mega deals for that respect have been mega disappointment in the past for shareholders and staff alike.
But what a pride for everyone involved, ie investment bankers and their board members clients ! Industrial logic ? That’s for middle management, thank you very much ! Well, as long as it doesn’t interfere with empire building and other headlines generating moves, of course.
As Warren Buffet always says, it’s when you start liking the money (and pride and everything else) more than what you do that your company is going to have a problems.
What a lot of people seem to forget is that most of these companies were dying long before the merger/new leadership/whatever were talking about took place.
Digital was dying before the merger with Compaq. Compaq didn’t certainly didn’t help the situation and probably made it worse, but the writing was already on the wall. Digital didn’t know what to do with their tech. End of story.
HP was having a lot of problems before Carly. She made it worse for sure, but still, the company needed some change if they wanted to stay alive. Unfortunately, they needed someone other than Carly to do it.
This is the same situation that Sun is in now. It’s pretty clear to most observers that Sun is dying a slow death. They desperately need to reinvent themselves if they want to stay alive. It’s not impossible to do that. IBM has certainly done that, but it is hard, and I would say that they need new leadership.
BTW, none of these examples have anything to do with the actual tech. that the company has. In most cases, these companies had really great technology, but they couldn’t get people to buy it. I’m not saying the only problem is marketing because the tech. market changed to. It’s more of figuring out how to sell the current stuff or how to make stuff that will sell.
..not through an “indirect aquisition” as someone above mentioned. If you don’t know the facts then be gracious and shut up.
Carly has degraded HP in every possible sense, including employee motivation. Throw innovation and research out of the window, throw quality out of the window, outsource the hell out of the company, including the CPU for their UNIX servers, completely dilute the HP brand, merge with Compaq in the misguided plan to focus on cheap commodity hardware (intel-based) and ended up moving less boxen than Dell alone!
In our company, HP is not synonymous of great quality, anymore.
Most mega mergers or mega deals for that respect have been mega disappointment in the past for shareholders and staff alike.
You must’ve missed the part in the article where it mentions the 56% share drop, and the general tone of the article
Just saying that this one is nothing special. Share price drop and the rest of the article apply to a lot of other such mergers.
$45.000.000!!?? That’s insane, what could you do with that kind of money? Is this normal?
She run HP in to the ground by overextending the budget doing too many BIG projects, & the merger with Compaq was one of the stupidest, about the only good product HP builds is printers, i seen a messageboard once where all the HP complaints were about computer hardware and HP CDRWs.
“It’s strange why Compaq bought Digital and hence acquired Alpha. If the article is correct and that Compaq didn’t spend much on research, why bother with Digital? Seems like lack of planning and foresight to me. ”
HP bought DEC, and then HP later merged with Compaq. or something like that. it was an indirect acquisition on the part of Compaq.
No, that wasn’t the case.
Compaq purchased Tadem and DEC; the idea was to marry the high end, high value market with the low cost economies of scale which they had in their PC division.
Compaq wanted, sorry, *NEEDED* to diversify their business; the fact remains, the margins were dropping on their PCs, they needed something of high value to boost their profitability – they saw the writing on the wall early enough to know that they could not simply be a 100% PC vendor for ever.
The problem was, however, is that they never had a cohesive strategy to deliver those products, coupled that with the Microsoft fanboy’ist atmosphere within Compaq – which still exists in the HP/Compaq – the aquisition was setup to fail on day one.
In other words, it was less to do with the aquisition, and more to do with the lack of long term stratergy and an unwillingness to purge the company of Microsoft zealots hell bent on derailing any possible alternative to their little ‘wintel empire’ which they’d built up with in Compaq.
Firstly I disagree with the manner in which Carly Fiorina is described in royal terms. She wasnt the only person on the board, and not the only person failing to execute the strategy. Frankly if she hadnt been paid $45million (it is usually, Ovitz at Disney got paid $150mill) she would probably be crying scapegoat.
Secondly the Compaq deal WAS NOT the reason that hp strategy failed. They made more cost saving than expected and the only reason why their server division is only dribbling cash & not bleeding it (even occassionally profitable) is the compaq x86 server sales profits are covering up the mounds of red ink from Itanic – which ultimately has destroyed their big iron strategy.
Frankly it was risky from day 1 to think that customers werent going to jump ship when replacing a mature dec alpha chip on a mature tru 64 & a mature pa-risc on a mature hp-ux, with a new chip from intel combined with a port of hp-ux & linux. If I were forced to move architecture i wud probably think about switching vendor also, perhaps to SUN, probably to IBM. I am not alone in this way of thinking, look at server shipments.
As someone who was once a fan of HP, I’d say that where they really went wrong was in making every product that they sell into a steaming peice of crap. Just look at their calculators: the old ones were made out of metal, lasted for decades, and were the pride of every engineer that I’ve ever met. They were truly great. Now, the things look like the bastard children of TI calculators with the old iMacs. They’re cheap, ugly, very slow, and not reliable at all (yes, I tried to use one for a few years, until it stopped responding to a half-dozen buttons).
Another example of their cheapness is in their printers. I’m still using my LJ6; it’s still even on its first toner after nearly ten years. HP printers now are ugly, slow, and tend to break. I could never buy one of those things now. Maybe, if HP went back to producing quality products for a reasonable price, they would do better…
HP’s Problem is that they want to be to many Things and their market does not allow for that. the PC market is cut throat. the Big Iron market is cut throat and the digital imaging market is cut throat.
HP wants to be in all 3 of those cut throat markets and succeed. that is just stupid. maybe they could do 2 of the markets, but not 3.
they need to change focus and spin off one of their divisions.
Stop Outsourcing, stop letting share holders run
the Company, and stop trying to be a low price
leader on a bunch of junk.
What happened to building a quality product, support
and paying for what a product is worth.
Until then, they will flounder around, outsource
products and be destined to be a junk product
vendor with NO quality.
The reason why the Tech sector went sour was
using ‘cheap-o offshore labor’ with horrible
results, no control and who cares attitude
except for the stock price.
The USA invented Tech, then Corporations wanted
more returns on the stock price and decided to
Offshore it to 3rd world countries and this
is what we have today. Failed attempts to run
a company based on being ‘cheap’……
Well, look at HP a Outsourced, 3rd world labor
service company with horrible junk products.
No vision, no leadership, only ‘cheap’….
Compaq made the exact same mistake when they acquired DEC, and Capellas was smart enough to realize that it’s only a mistake if you’re on the acquiring side. HE did right for his shareholders by selling to HP.
The lesson here is that if you’re going to hire a charismatic outsider who is not a techologist (by Carly’s own admission), the board has to take an active role in reviewing major decisions.
Do not buy an HP or Compaq personal computer. They assume that you do not want a reinstall media so they make a closed partition. On some HP/Compaqs I have seen this take 5 gigs (Yes you read correctly 5 GIGS) of your hard drive. And the only way to get a physical install CD/DVD is to hope that your drive fails. I was redoing a friends hp that is about 2 years old and with only a 20 gig drive (he’s not poor just cheap) and 5.12 gig was the windows and preloaded program partition. I could not delete it after trying to by using my xp cd and using the partition tool. HP tech support informed me that since his drive crashed they were allowed to mail a restore cd for $25 that would take a week to get to my house. And they also claim that the computer comes with a program to create a restore cd but when tech support tried to walk me through the process I could not burn the ISO go figure. MY recomendation is to NEVER buy an HP or Compaq Personal Computer and I see why they are not making money and person with half a technical brain does not want 5 precios gigs sucked up by a restore partition.
It’s strange why Compaq bought Digital and hence acquired Alpha. If the article is correct and that Compaq didn’t spend much on research, why bother with Digital? Seems like lack of planning and foresight to me.
They wanted the digital service business. Compaq didn’t have any way to provide on location services to business while DEC had a great organisation which was well liked by their clients. The problem was Compaq people wanted to move into PC solutions while DEC employees (but not execs) saw PCs as the desktop component of a VMS solution. DEC execs and Compaq execs saw the world the same way but their employees were much further apart and had trouble working out the details together.
A great example was that Compaq owned far and away the most compex and innovative C compiler on the market (GEM). Essentially .Net 10 years earlier. But what were they going to do attack Visual Studio?
It’s strange why Compaq bought Digital and hence acquired Alpha. If the article is correct and that Compaq didn’t spend much on research, why bother with Digital? Seems like lack of planning and foresight to me.
They wanted the digital service business. Compaq didn’t have any way to provide on location services to business while DEC had a great organisation which was well liked by their clients. The problem was Compaq people wanted to move into PC solutions while DEC employees (but not execs) saw PCs as the desktop component of a VMS solution. DEC execs and Compaq execs saw the world the same way but their employees were much further apart and had trouble working out the details together.
A great example was that Compaq owned far and away the most compex and innovative C compiler on the market (GEM). Essentially .Net 10 years earlier. But what were they going to do attack Visual Studio?
Typhoon121 (IP: 168.169.61.—)
a lot of companies do this…
“the windows and preloaded program partition”
IBM
Dell
Sony
just from the top of my head…
Next
I don’t know much about her (Carly), but since when did mergers/acquisitions really work?
Look at what happened to Lucent & all its buyouts…
I feel sorry for any company (and employees) that get bought out. Take Linksys, great product and web site… with Cisco envolved now I am concerned (ever deal with Cisco code or thier web site or support?.. ugh!)
HP (and Compaq) made horrible PC’s… I never saw such poor preformance… hunks of junk.. plus all the add-ons they load up. I tell customers to get a Dell or a clone/custom… but is is hard to build one cheaper than what Dell can deliver.
Compaq servers were great, but I refused to buy any after HP was associated. With IBM outsourcing some of the hardware, that leaves with what choices? Dell or clone servers?!.
hyperdaz: Dell gives you actual CDs for restoration. They gave me an actual XP Pro CD and another CD with drivers and misc. programs. If that’s changed recently, then I’ll definitely avoid Dell for my next lappy.
As I see it, Carly was a symptom of a deeper problem. I’m not saying she’s an angel by any means. She certainly ranked very high on the list of dishonest CEOs, but she was just the most visible culprit. The little incident with Deutche Bank and the merger vote was, at best, suspicious if not criminal. It’s too bad the DoJ didn’t look into it as hard as they looked into Martha Stewart.
HP’s real problem was and is that they forgot what got them where they were. It started in the early ’90s. They were a company that took real pride in building quality products. They took care of their people and their people (I was one of them) took care of them. They forgot their people are their greatest asset and treated them accordingly.
HP once made the best printers on the market and, for a short time, made some damned good computers. To some extent the competition improved, but for the most part HP has lowered themselves to meet the competition.
HP stopped focussing on being the best and instead instead decided to compete. They stopped being the best and starting being good enough.
HP’s board and upper management needs to do some soul searching before bringing a CEO in. They need someone who will lead the company with the attitude, “This is what we do and we will be the best, period!” The last ten years have been, “What is everyone else doing? How to we compete with them?”
If HP the computer and technology company wants to survive, the best thing they could do is spin off the printer division. The printer divison, by virtute of being the most profitable, is getting all the manager attention. The printer division also really doesn´t have anything to do with the computer and technology side. If they spun that off that then they would be forced to focus on the computer part of the company and perhaps do something with the last remaining resources they have there. Because they do have valuable resources, they just have to use them.
HP had a great server line, great CPU, enterprise level R&D, and all sorts of other stuff. Never understood why they wanted to be just a redistributor for Intel. Seems like they wanted to take 10 steps back rather than move forward.
Spin off the most profitable part of your business? That just doesn’t seem sensible.
I would recommend reading ‘Who Says Elephants Can’t Dance’ by Lou Gerstner. It’s his account [as new CEO] of the turnaround of IBM in the early-mid nineties. Analysts and IT press people were telling him that IBM should spin-off this and that. He paid no attention to that. If I remember correctly he said that the only people that ever benefit from spin-offs and mergers are the investment bankers and analysts. So why would he listen to them.
He helped IBM; maybe he could do it for HP.
I know zero about HP’s internal business.
I do know that growing up, I learned a lot about good design by repairing and maintaining old HP test equipment from the 60’s, found in the dumpsters of our local U. It was all obviously designed for easy maintenance – easy to disassemble, easy to get at everything, and easy to replace or repair modules if necessary. And obviously built to last, most of the instruments worked fine right out of the dumpster, and the pieces I kept still work today.
I recently tried to cean my HP printer. This was a $400 inkjet ca. 2000, not one of the “free with purchase” models common today. The interior had become gummed up with leaking ink, a reasonable problem, and it was affecting the print quality. It should have been easy to disassemble and clean, even if this wasn’t an anticipated problem, BUT the thing was obviously built to be assembled ONCE – no screws, all plastic parts, all with serious one-way caches. Click it together at the factory, and it’s that way forever. No instructions at HP.com on how to disassemble it (“the interior does not need to be cleaned”). I managed to do a partial job with long q-tips and a lot of swearing.
I suppose this evolution has occured for every tech company (remember when Apple II’s had pop-off lids and every chip was socketed? You can’t make a mac mini like that), but HP always seemed as a previous poster said to appreciate the art of engineering a bit more than others. Ah well.
-MG.
The lack of reference to internal memos or inclusion of documents is intentional. The last time I posted an internal memo on my site (the innocuous Bob Wayman memo about Carly’s departure, HP’s Senior Counsel emailed me a cease and desist missive within an hour of the posting. (You would think the lawyers would have better things to do with their time). Other evidence is in the public domain, or in back issues of my newsletter. Many of these back issues are available free for the downloading on my site. To get the PDFs, pay a visit to
http://www.shannonknowshpc.com
How are hp laser printers now? In the late 90’s and earily 2000’s I was an HP Tech and worked on a ton of thier gear. Pretty much straight forward, and I like how easy it was to repair thier Canon designed print engines.
Granted she didn’t perform well, but you can’t generalize this as a “women suck at management”… that’s both sexist and unsubstantiated. Anyone who has taken a psychology of gender course in the past 10 years knows that, when it comes down to the nitty gritty… men and women do not significantly differ.
…
Maybe she wasn’t right for the job, but it’s not because she’s a woman.
I agree. I think maybe she was not right fot the job, but she could be very good at a different one.
Effective 14 February, and in a personal decision totally unrelated to Ms. Fiorina’s ouster, HP’s senior VP of marketing Allison Johnson announced that she was leaving HP to take a top marketing post at Apple Computer. She will become VP of worldwide marketing communications, reporting to CEO Steve Jobs. At Apple, Ms. Johnson will be responsible for Apple’s global advertising and related efforts
She is going to Apple. If she were that bad, Steve Jobs wouldn’t hire her. Apple is not as big as HP, and at this time, it cannot afford mistakes as the one she did on HP. I believe HP-CEO work was not well-suited for her.
I REALLY hope her to do her best at Apple.
The same as most. Forgot their roots, and valued money to the detriment of all else.
In 1997, I bought a HP scanner for $300. Came with a nice bundled software package and the whole set up worked really well.
In 1998, I got a new W98 computer and the scanner no longer worked. In vain I hunted through HP’s site (on a 22.8 modem) and kept getting to the page with an $80 CD which not only had the new driver, but a new sofware suite I didn’t need.
I finally called HP and asked where the URL for the new driver was, and they gave me the link where I could buy the CD.
So, you’re not offering a download?
No. Just the CD. Those files are so big, it would take forever to download.
Okay, can you mail a CD for the driver to my house?
Certainly. That will be $80.
UH, no, I just want the updated driver, not the sofware suite that I don’t need.
Well, the software is better.
I don’t need the software, just the driver.
Well, it only comes on this disk with the software.
So, there’s no other way I can get the updated driver?
No, you have to buy this disk.
Since that day I have not, nor I will I ever, buy another HP product.
(Eventually my guru and I figured out a sneaky back-door bailing wire and spit work around to get the scanner working. HP did not put the updated driver on their site for another year.)
I have several friends who also will not buy HP products because they’ve been asked to pay for updated drivers.
Don’t put stupid people in charge of your company who haven’t got the faintest idea, or haven’t tried, to understand the business you’re in. You get business managers coming along all the time who think they can make decisions related to IT, and they just plain and simple can’t – and worse, they don’t learn from past cock-ups. You could tell that straight away whenever Carly Fiorina opened her mouth. ‘What are you talking about?’. They continue to have the misconception that IT is somehow easy.
The most important thing though was, as an outsider looking it, was also totally obvious that she is a very, very (shockingly) poor manager. In a company as large as HP you simply need people on your side, and to do so you need to manage people effectively. Whatever you might want to do you always need to keep that totally in mind. When you join the company talk to a lot of people, find out what’s happening. If you don’t understand the technology get good advice and opinions and think objectively. Basic stuff. Make sure you have a clear strategy and make sure you’re doing something. The most profitable part of the business is the printer side, and it’s the only thing they’ve consistently invested in. Reselling other peoples’ products is simply not a good idea – what is it that you do?!
I think a lot of people are asking that question of HP now, because you simply don’t need a company that size to do whatever it is that they’re doing. Actually I’m going to call it properly. It’s Hewlett Packard – that acronym HP makes me a bit sick.
Before anyone wonders, the above applies equally to male and female managers in IT. I’ve seen some pretty good female managers in IT simply because they didn’t try to impose themselves – they were able to think objectively if they didn’t understand the technology or other political issues involved, and they sought advice and information from people. Basically, they were sensible. No other word for it.
A lot of male managers tend to run their departments and companies right over the same land-mine they ran over last week, as if it somehow never happened.
It’s the attitude that counts not the gender, and the vast majority of managers who get their positions today are totally useless at it. Unfortunately it’s only getting worse, especially in IT where technical issues and practicality are still very important.
I met HP equipment for the first time in late 80s while still a teenager and until mid 90s, for me HP logo was synonym for high quality graphical workstations and test equipment. Later, I didn’t pay much attention to the company, I think I recognized the wrong path they’re walking. I just want to ask what has happened to their test equipment (spectrum analyzers, oscilloscopes, RLC-meters…) division, it’s still mystery to me. Does anyone know?
>Spin off the most profitable part of your business? That just >doesn’t seem sensible.
Not initially no. But HP the printer company would probably be more profitable than the current HP printer and other stuff company. And it would force HP the computer tech company to focus harder or their core skills and products. I still believe that spinning of printers could create to companies greater than the sum of their parts. Of course management wouldn’t gain from it and it would probably be bad for short term profits, so it won’t happen.
They spun them off. They’re now called Agilent.
If I may paraphrase my previous post. HP lacks a singular, well-defined vision. The need someone at the helm with the cajones (literal or figurative) to state where the company is going and lead them there. The leadership has run all over the industry trying to figure what they’re doing for too long.
They spun them off. They’re now called Agilent.
Yeah, in 1999, thanx. Just visited their site, they claim they “continue to live the values handed down from Bill and Dave: uncompromising integrity; trust, respect and teamwork; and innovation that makes a difference.” I really hope they do.
IMHO, this is a perfect example of a larger ill in the capitalist world. The never ending bottom line (fudge) factor, the pressure to drive the stock price higher by having bigger bottom lines every 3 months. This is pushing upper (mis-)management types to do Stupid Things. The quality of products is getting worse (cheaper) instead of better for the same price. Etc.
same here. i will never ever buy hp-crap again.
i bought a hp scanner about 2 years ago.
it came with a defect driver-cd.
ok, this can happen but:
the download for the driver was 200mb.
nothing you would download via dial-up.
so i called them to get a new cd.
i had to send them the old one and after !!!1 month!!! i finaly got a working one.
thats definitely not what “customer-service” should be like.
Mark, I agree with you. By the way, I believe you intended to say “cojones.” “Cajones” means “drawers”: that is, a box, shelves, etc., where you store things. 🙂
Lately I have been tinkering around with predictive information tools (PITS) and soon after Ms. Fiorina’s resignation was announced I fed the question “Carleton S. Fiorina” and Who’s next?” into ACE (“Artifical Chicken Entrails”) which is essentially a modified Amiga motherboard equipped with one of the prototype “Cassandra” DSP chips, that for some reason, never became too popular with any of the merry-go-round of senior Commodore execs. Anyway after chugging away for a day or two (We are talking about a more or less bog standard 25 MHz Amiga 4000 here), ACE eventually responded with:
Predicted Event:
Timeframe of Occurrence:
Sometime within the next two years from date of prediction.
In close proximity to the shipment of Microsoft’s Longhorn product.
Within one year after the launch of the Xbox2 product.
Current predicted specific probable range of dates: A Friday between July 14, 2006 and September 23, 2006.
Current predicted specific probable date: July 14, 2006.
Details:
Microsoft CEO Mr. Steve Ballmer will land an aircraft on the deck of the U.S. Navy aircraft carrier the USS Ronald Reagan sailing off the Pacific coast of the continental United States of America.
The media will provide extensive coverage of the predicted occasion. The event will be televised live.
Once the aircraft has landed, Mr. Ballmer will leap from the aircraft wearing an XP Blue jump suit covered with Microsoft and partner product logos.
Mr. Ballmer will run to the podium set up for the predicted occasion and shout “Mission Accomplished!” into the microphone.
The large crowd of civilian, military and media spectators will fervently cheer and applaud as if on cue.
Following the “Mission Accomplished” announcement and some brief statements related to Longhorn, Mr. Ballmer will quietly announce his immediate retirement from Microsoft.
Mr. Ballmer will explain that he is retiring in order to spend more time with his family.
Mr. Ballmer will then hand his job and a ceremonial brown paper bag to a Mr. Brian Valentine, salute the crowd and re-board the aircraft.
The aircraft with Mr. Ballmer will take off into a fading sunset, then circle back over the Reagan and perform a screaming low-level pass of the carrier, disappearing into the darkness towards the coast of the continental USA.
End of Predicted Event.
We still have not got the Video Toaster card to work with ACE yet, so there is no video. But we will keep working on it as time allows.
Bought a HP DeskJet 520 monochrome printer back in ’94 for $300us. After a bit of use the tray loading mechanism wore off and it wouldn’t load paper anymore. Poor design so I replaced it with lexmark and as they say, the rest is history.
If you don’t know the facts then be gracious and shut up.
i’ve already emailed abuse at nokia about your rude behaviour while on an official nokia account. i hope you get fired. love, newbert.
Since the Test & Measurement division was spun off into Agilent they’ve really degraded in my opinion. There was a time when we’d only consider HP test equipment because of the incredible support they’d provide over the lifetime of the product. Now that they’re Agilent the support has gone downhill big-time! In many cases, we have to go to third-party companies to support our older HP equipment. I’m sure companies like Tektronix and National Instruments have benefited from this.
The biggest crew up they made is caused doubt in the future of their product lines. There is no clear path for the HP9000 line. As an SA in the industry i am having a hard time figuring out what platform to recommend for Enterprise. I sat through a webinar about how the itanium will basically be the PA9000 and extend their Unix hardware line for awhile to come. Now they abandoned itanium…how do i recommend hardware that may or may not have a clear upgrade path. Don’t want to recommend a Superdome when 3 years from now HP kills the HP900 hardware line when perhaps i could have recommended an IBM Regatta that seems to have a clear upgrade path for the foreseable future. SUN is already in that boat i can’t recommend a SUN solution based on the fact that they too are in a state of disarray. RedHat on DELL is getting better but not near enterprise quality compaired to commercial Unix offerings….Windows 2003 server?
The biggest crew up they made is caused doubt in the future of their product lines. There is no clear path for the HP9000 line. As an SA in the industry i am having a hard time figuring out what platform to recommend for Enterprise. I sat through a webinar about how the itanium will basically be the PA9000 and extend their Unix hardware line for awhile to come. Now they abandoned itanium…how do i recommend hardware that may or may not have a clear upgrade path.
First, HP didn’t abandon the Itanium. They announced that they will stop developing Itanium chips (it makes more sense to leave actual chip development to Intel) and they will stop making Itanium workstations (because only like 5 people bought them over 5 years), but they will continue to develop, make, and support Itanium servers. So you may recommend HP’s Itanium servers with your enterprise OS of choice (Linux, HP-UX, or OpenVMS).
Second, there is Sun. Their financial outlook is not too bright at the moment. However, they have a truly excellent enterprise OS (Solaris 10) and very good hardware to run it on (namely, Sun’s Opteron boxes). The fact that Solaris 10 is open-sourced should ensure that even in Sun does go belly-up in 5 years, their OS will still be supported.
Third, IBM. Don’t know much about their stuff, but people say it’s good.
Fourth, Linux. In that case, the hardware doesn’t matter. Could be Dell, could be HP, could be Lenovo, could be your favorite whitebox vendor, could be custom-assembled. Hardware upgrade path is also guaranteed. Linux runs on anything popular. What does matter is the quality of the software — but both Redhat and Novell are making a convincing argument that their distros are enterprise-ready. If you think Solaris 10 won’t make it in the marketplace, then Linux is a good second choice.
As for Windows 2003 as an enterprise server — LOLZ.
Carly took HP in the right direction. The problem is she did it too slowly and was too conservative.