Hurd Says HP's Costs Still Too High
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HP CEO wants more cuts to increase profitability and grow the company.
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For the time being, Hewlett-Packard will keep the crown as the world&#39;s biggest spender on semiconductors, according to a report released on Monday.
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CEO Mark Hurd promised a major transformation of Hewlett-Packard's IT infrastructure to set an example to enterprise customers of how they can use HP hardware, software, and services to lower their own business IT costs.
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(InfoWorld) - Despite the turnaround Mark Hurd has engineered at Hewlett-Packard, the president, chairman, andÂ CEO of the technology giant remains unsatisfied. Hurd said at a Morgan Stanley Technology Conference on Monday in San Francisco that the company still has to reduce its cost structure in order to be more profitable and grow. By many measures, HP is successful. It edged past rival IBMÂ in 2006 revenue ($91.7 billion to IBM's $91.42 billion), improved its net income by 158 percent over 2005 to $6.2 billion, and is the industry leader in personal computer and blade server sales. "But on an absolute basis, we're not doing well," Hurd said. Although HP has been on a two-year campaign of cost reduction, including employee layoffs, those savings are still not completely reflected in HP's profit and loss statement, he said. "I don't think that we've gotten very good traction with the investment base understanding that these are efforts that require time," Hurd said. "It will take us all of the next two years to be able to take advantage of that." In an interview before a room full of Morgan Stanley investors, Hurd said the total available worldwide market for the computers, servers, printers, and information technology services HP offers is $1.2 trillion, but that HP still doesn't cover that market effectively. He said the company needs to add to its sales force and develop more partnerships with other companies to better reach customers. Hurd acknowledged, as he did in the company's earnings conference call Feb. 20, that HP's storage business was weak. It grew only 6 percent in HP's fiscal first quarter, which he attributed to the fact that much of its product line is tape storage, a declining business. However, sales of its EVA line of disk storage products grew 18 percent in the quarter. As for server sales, while they grew 10 percent overall, sales of blade servers jumped 45 percent in the quarter, and the Integrity line of high-end servers grew by 75 percent. To further control costs, HP last month offered employees an early retirement opportunity and said it would change from a pension plan to a 401(k) plan, although employees currently in a pension plan will still receive their pensions. While that is expected to trim payroll costs, Hurd said other costs, such as services delivery, real estate, and procurement, still have to be tightened. Hurd was one of scores of technology company executives speaking at the technology conference that runs through Wednesday.
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Mike McGuire, an analyst with Gartner G2, said HP&#39;s moves are born both out of innovation and market necessity, and that the company still faces stiff competition from the likes of consumer electronics giant Sony.
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New reports implicate HP chief more deeply than previously thought.
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Hack infiltrates Hurd's brain Comment HP CEO Mark Hurd's next cost-cutting measure could come as the company axes its entire public relations staff. Who needs PR professionals, after all, when you have Forbes reporter Quentin Hardy?â¦
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Hewlett-Packard Co. said it has launched a 3,999 yuan ($483 in the US) computer in China. HP&#39;s new model, part of its Pavilion series, features a central processing unit (CPU) from Advanced Micro Devices Inc.
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In testimony to Congress on Thursday, Hewlett-Packard CEO Mark Hurd said he wishes he had asked more questions.
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(InfoWorld) - Last year's HP Technology Forum was chased out of New Orleans by Hurricane Katrina. This year, storm clouds of a different sort hang over the event. As an estimated 6,000 attendees converge on Houston for the annual Hewlett-Packard user conference, the subject on many minds is the one the company is most loathe to discuss: theÂ shakeup of HP's boardÂ and theÂ prospect of criminal chargesÂ related to a spying scandal. The California Attorney General and a Congressional committee are among the institutions probing HP's possibly illegal methods of investigating news leaks from its board. HP has until Tuesday to respond to an invitation from the Oversight and Investigations Subcommittee of the Energy and Commerce Committee for HP's Chairman Patricia Dunn and General Counsel Ann Baskins to testify at a Sept. 28 hearing in Washington. But at the Technology Forum, a gathering of HP user groups, partners and other vendors, HP is focusing on its business success, which is considerable. With revenue, earnings and stock price all resurgent in the last year, HP CEO Mark Hurd could rightly say, "Pay no attention to that prosecutor behind the curtain," when he delivers a keynote address on Sept. 18. In the quarter ended July 31, HP's earnings-per-share (EPS) topped analysts' estimates at $0.52 on 5 percent revenue growth to $21.9 billion, compared to the year ago quarter. Across many of its business lines, HP, of Palo Alto, California, has gained on rivals, said industry analyst Rob Enderle. HP personal computer sales have grown with its "the computer is personal again" marketing campaign, Enderle noted. IBMÂ sold its personal computer businessÂ to Lenovo Group, in 2005, and Dell has suffered negative publicity from the AugustÂ recall of 4.1 million fire-prone batteriesÂ in Dell laptops. In storage, HP closed the market share gap with EMC in second quarter numbers released Aug. 29 by research firm IDC. With EMC's 20 percent share, based on unit sales, to HP's 19.3 percent, the two are in a "statistical tie" said Brad Nisbet, an analyst with IDC. "HP has been executing well under new management," Nisbet said, referring to Hurd, CEO since March 2005. In servers, HP is a strong second to IBM, according to IDC market share numbers, but has made some errors, said Enderle. It still is using Intel's Itanium processor in its high-end Integrity servers, which rivals aren't embracing. Gartner research shows that 90 percent of the Itanium chips shipped in the first quarter of this year ran on HP servers; neither Dell nor IBM build Itanium computers. Technology Forum organizers get tight-lipped when the conversation shifts to the board scandal. "That's HP's business," said Nina Buik, vice president of Encompass, one of the HP user groups planning the event. "We're not focused on those issues unless it impacts the technology." And as long as the scandal doesn't touch Hurd personally, the customer satisfaction should be unaffected, said Crawford Del Prete, senior vice president of research at IDC. . "I don't think [the scandal] is a drag on the company's success," he said. "I have not found one customer who said 'I'm not going to do business, or I am concerned about doing business, with Hewlett-Packard as a result of this.'" HP Technology forum runs from Sunday to Thursday this week.
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HP Chairman and CEO Mark Hurd and seven other company executives are accused of selling $41.3 million worth of HP stock at "inflated prices" just before the company revealed details of a boardroom spy scandal.
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HP's Mark Hurd is proving far more popular, and profitable, than former CEO Carly Fiorina. Check out their differences in management style.
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The congressional panel investigating Hewlett-Packard Co.'s internal probe of its boardroom spying has demanded that chief executive Mark Hurd explain $1.37 million worth of options he exercised just before the scandal became public, two congressmen said yesterday.
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By MATT SLAGLE   Associated Press writer  HOUSTON -- Hewlett-Packard Co.
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(InfoWorld) - Hewlett-Packard CEO Mark Hurd's assessment of his company's storage sales organization was simple and blunt: "We just don't cover enough accounts," said Hurd on a conference call with analysts Tuesday discussing HP's latest quarterly earnings. Sales of storage products grew only 3 percent during the quarter ended Jan. 31, compared to a year ago, whileÂ HP's overall revenue grewÂ 11 percent, and revenue in the Technology Solutions Group, of which storage is a part, grew 40 percent. "We need to drive stronger top line results in the business," Hurd said. To do that HP will invest in improving sales coverage and hiring more storage sales specialists, he said, as well as better aligning the company with its value added resellers, independent companies that sell HP storage. In other words, HP has to do a better job of reaching out to customers like Gary McCready. McCready is a storage manager in the IT department of a major New York area financial institution, which he did not want identified, and a member of Encompass, an HP user group. Although he frequently receives invitations to HP technical forums or other events surrounding operating systems or servers, he sees very few invitations to HP storage events. "I'm not sure HP is really putting the emphasis on selling storage the same way it puts the emphasis on other areas. I think they figure that storage simply sells itself," McCready said. He also lamented that HP recently merged its StorageWorks convention into the HP Technology Forum, a show devoted to all HP systems. In fact, storage doesn't sell itself, says Rob Enderle, principal analyst with The Enderle Group, a market research firm. The enterprise storage buyer is a very conservative buyer who makes a decision only after careful consideration, which makes for long sales cycles, Enderle said. "If you don't have enough specialists you are not going to get the business." More to the point, a storage specialist needs to know about the specific storage issues facing different industries, said Andrew Reichman, a storage industry analyst at Forrester Research. Storage needs differ for financial institutions versus health care companies, for example, on what regulations companies have to obey, and the types of software they use, Reichman said. "It's hard for storage vendors in general, not just HP," he said, but added that some storage vendors are dealing with the challenge. EMC and Hitachi Data Systems, both solely storage vendors, are organized around sales account managers who are supported by sales specialists who can address specific needs in specific industries, Reichman said. But while Hurd thinks HP's storage sales operation needs attention, it is competitive. HP ranked second to EMC in storage sales worldwide market share in the third quarter of 2006, according to IDC's latest figures. HP's $760 million in revenue gave it a 17.6 percent share, while EMC's $927 million gave it a 21.4 percent share. But HP actually lost market share to EMC that quarter as its sales grew by only 1.8 percent, compared to the year ago quarter, while EMC's grew 18 percent. HP has a chance to improve its sales if it takes some simple advice from customers like McCready: Call me.
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HP (NYSE:HPQ) (Nasdaq:HPQ) today announced that Mark Hurd, HP chief executive officer and president, will lead a press conference on Friday, Sept. 22, at 1:05 p.m. PT, to discuss the actions HP is taking to address issues regarding the investigation of leaks from its boardroom.
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What did you buy today? A latte? That's cute Deep in the bowels of Hewlett-Packard's financial department, the person in charge of the company's checkbook has writer's cramp. The hardware maker has announced today the proposed purchase of not one, but two companies.â¦