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Users seek answers from new HP CEO

Users seek answers from new HP CEO

Mark Hurd, who has taken over as Hewlett-Packard Co.'s CEO, said one of his first priorities will be meeting HP's employees, customers and partners over the coming weeks and months. 'Don't expect to see a lot of me right now,' he bluntly told reporters before ending a press conference.

Mark Hurd, who has taken over as Hewlett-Packard Co.'s CEO, said one of his first priorities will be meeting HP's employees, customers and partners over the coming weeks and months. "Don't expect to see a lot of me right now," he bluntly told reporters before ending a press conference. HP users said they will be ready for Hurd, who until last Tuesday was president and CEO of NCR Corp. Ten customers interviewed after HP announced his hiring said they want answers to questions about the company's overall direction and its plans for specific product lines. They also offered plenty of advice for Hurd, including suggestions that he get HP out of the PC business and make it more customer-oriented than it was under former CEO Carly Fiorina.

The clock is ticking for HP, said Gary Pilafas, a senior storage and systems architect at UAL Loyalty Services Inc., a unit of United Air Lines Inc. Hurd "needs to define their future and get the word out quickly," Pilafas said, adding that he thinks HP should spin off its PC operations in order to "focus on the profitable units."

Tyler Best, CIO at Vanguard Car Rental USA Inc., a Tulsa, Okla.-based company that owns the National and Alamo car rental brands, urged Hurd to fully engage users and find out what they're expecting from HP. Over the past few years, the vendor's concentration has all too often been focused inward, Best said.

"It's imperative not to lose touch with what's important to the customer," he said.

During his press conference and an earlier conference call with financial analysts, Hurd said little about how he may shape HP's strategy. He vowed to keep "a relentless focus" on meeting the needs of users. But he will also be focused on results, he added, saying that his management philosophy "reflects a fundamental belief in cost discipline and focused investment" in initiatives that have strong growth potential.

Users Uncertain

Denys Beauchemin, a director of the 100,000-member Interex HP user group, said he is worried that in order to cut costs, the new CEO will shorten the end-of-life road maps on products such as the HP e3000 midrange line and the company's Alpha-based systems.

Beauchemin, who is a systems migration consultant at Austin-based IT services firm Sector7 USA Inc., added that he thinks HP has strayed from the deep engineering roots established by its founders.

Hurd, who had spent the past 25 years at NCR and had been its CEO since March 2003, is relatively unknown to HP users. Most of the customers interviewed this week said they didn't know enough about Hurd to have an opinion about his ability to lead HP. That corresponded with the results of an informal poll on Computerworld's Web site, in which 64 percent of the 235 people who had responded as of Friday afternoon said it was too soon to tell whether Hurd's hiring was a good move.

Members of HP's board cited the need for a more hands-on executive when Fiorina was ousted in February. They were drawn to Hurd by the fact that NCR's financial results and stock price improved significantly after he began running that company.

Frank Gillett, an analyst at Forrester Research Inc., said Hurd "has demonstrated a lot of operational skills -- the ability to make tough decisions and cut costs."

"If you look at the track record, he took a company that was floundering and took it to where it's a very healthy company," said Sam Bhavnani, a La Jolla, Calif.-based analyst at Current Analysis Inc.

But to succeed at HP, Hurd will have to keep users such as Ashok Bakhshi satisfied. The IT director at Schindler Elevator Corp. in Morristown, N.J., said HP needs to differentiate itself by bundling more services with its hardware.

He also said that the company should add more value to its products. For example, Bakhshi said he would find it helpful if HP preconfigured its PCs with applications such as SAP AG's ERP client.

Hurd will also have to address the concerns of users like Ron Horner, an e3000 user and legacy systems supervisor at Lady Remington Jewelry in Bensenville, Ill.

Horner said Fiorina did a lot to alienate the e3000 installed base by stopping sales of the systems in 2003 and holding off on responding to a proposal to turn over the source code for the e3000's MPE operating system to a third party. "HP has got to formally decide what they are ultimately going to do with MPE," Horner said.

But while some customers are unhappy with the changes at HP in recent years, others aren't. Tom Freeman, CIO for the city of Roseville, Calif., said he thinks HP's acquisition of Compaq Computer Corp. in 2002 changed its culture to a more customer-centric one.

"We saw a big change in HP that, to me, was positive," Freeman said, adding that he hopes Hurd will keep a close focus on customers and continue to invest in new products such as HP's digital pen technology.

Tom Krazit of the IDG News Service contributed to this story.

SIDEBAR

Hurd's Paper Trail Puts Premium on Knowing Customers

In a sense, Hewlett-Packard's new CEO, Mark Hurd, is an open book. He co-authored one last year outlining his belief that understanding customers is critical in a time when "virtually every industry is commoditizing."

In The Value Factor: How Global Leaders Use Information for Growth and Competitive Advantage (Bloomberg Press, 2004), Hurd and NCR Chairman Lars Nyberg said the key differentiator for companies in the current market environment is information: knowing customers' wants and needs.

"We don't go to the corner diner for the best food. We go because they know us and we don't even have to look at the menu," wrote Hurd and Nyberg, who was NCR's CEO before Hurd was given that job. "The value of knowing our customers rolls up from the corner diner to the largest corporations."

Hurd appeared to practice what he preached at NCR, said Tom Jung, a member of the board of the Midwest regional user group for NCR's Teradata data warehousing technology.

Jung, who is an adviser to the IT database administration group at WellPoint Inc. in Thousand Oaks, Calif., said he felt that NCR officials paid sufficient attention to customers and user groups under Hurd's leadership. Dayton, Ohio-based NCR often sent top officials to his regional user group's meetings, Jung noted.

In their book, Hurd and Nyberg also wrote about the need to innovate. But former NCR employee Robert A. Nisbet, a scientist who led some data mining research efforts at the Teradata division when Hurd was heading it, said Hurd isn't one to continue supporting technology that requires long-term development. "If he doesn't see immediate and significant feedback in terms of revenue after a couple of years, he's likely to pull the plug," said Nisbet, who left NCR in 2000 and is now a private consultant.

During his press conference at HP's headquarters this week, Hurd deflected questions about his plans for HP and didn't say whether he would reduce its workforce, which now stands at about 150,000, or move U.S.-based jobs offshore. But Hurd was hired to make changes.

"I believe in an execution-oriented culture," Hurd said. "I believe in setting clear goals, implementing tactical plans and holding people accountable."

And he acknowledged that HP needs some repairs. Although HP is "fundamentally sound" and a leader in many technology and services categories, Hurd said, "it is also clear that the company is not performing to its potential."

Zeus Kerravala, an analyst at The Yankee Group in Boston, called Hurd an unexpected choice to head HP.

"NCR is a small company, but I've heard that he's really good at sales and marketing, and that's what HP needs," Kerravala said. "HP touches so much of the enterprise that they need to have a unique brand identity. That's his biggest challenge." -- Computerworld (US)

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