These Struggling Oem's Have One Thing in Common

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These Struggling Oem's Have One Thing in Common

 user admin 2014-11-06 at 10:32:42 am Views: 340
  • #41407

     These Struggling Oem's Have One Thing in Common
    By Therese Poletti

    In a male-dominated industry, women are leading major turnaround efforts

    Some of the biggest giants in technology — an industry known as a male bastion — are undergoing major restructuring efforts with women in charge.

    This is noteworthy, at a time when sexism is rife in both the technology sector and Silicon Valley, and as influential women tech executives including Sheryl Sandberg, president and chief operating officer of Facebook Inc. FB, +0.32%  advocate for more women in the workplace.

    Women are running two of the largest tech companies, Hewlett-Packard Co. HPQ, -0.03%  and IBM Corp. IBM, +0.15% tasked with reviving revenue growth.

    And semiconductor company Advanced Micro Devices AMD, -1.79% promoted chief operating officer Lisa Su to CEO to lead a stalled turnaround effort.

    Pressure for performance is acute at these companies, as well as Yahoo Inc. YHOO, -0.99% under CEO Marissa Mayer, and copier and IT services giant Xerox Corp. XRX, +0.08% headed by CEO Ursula Burns.

    Yet as much as these five women face their particular challenges in the still mostly male tech world, the fact is that many older tech companies are grappling with the question of how to accelerate growth and diversify into new markets. And for most investors in these businesses, it doesn’t matter if the CEO is a woman or a man; they just want the job done right.

    Meg Whitman, CEO, Hewlett-Packard Co.

    Getty Images

    Meg Whitman, CEO, Hewlett-Packard Co.

    Hewlett-Packard Co. CEO Meg Whitman took the helm in September, 2011, after former CEO Leo Apotheker was booted by the board, and embarked on a five-year turnaround plan. Last month the company said it plans to separate its commodity PC and printer business from its corporate server and services business, essentially splitting the company in two.

    H-P is hoping that two slimmer entities will move faster and jump-start revenue growth. “Nimbleness may be the defining characteristic for technology companies over the next couple of years,” Whitman said at the time of the split news.

    The proposed spin-out, a tacit admission that Whitman’s turnaround is stalled, has been cheered for the most part on Wall Street, but naysayers argue that Whitman does not have the right engineering credentials to build a more innovative corporate culture. Before she joined the H-P board — which named her as CEO during the Apotheker crises — Whitman was CEO of eBay Inc. EBAY, -0.14% and ran unsuccessfully for governor of California.

    With the separation of the consumer and corporate businesses set for next year, Whitman has a challenge ahead to prove to investors that two H-Ps are in fact better than one.

    IBM Corp. CEO Virginia Rometty

    IBM Corp.’s Virginia Rometty

    Since IBM Corp.’s Virginia “Ginni” Rometty took over from Sam Palmisano in January 2012 the company has enjoyed exactly one quarter of slight revenue growth, before adjusting for currency fluctuations.

    In the last year, Rometty has unloaded IBM’s remaining lower-margin businesses, such as the commodity server business to Lenovo Group, and orchestrated a deal for GlobalFoundries to take over IBM’s money-losing semiconductor manufacturing unit. Analysts speculate that job cuts will continue to play a role in the company’s turnaround effort.

    Rometty needs to forge more deals in mobile, such as the partnership with Apple Inc. to develop mobile apps, and to find other acquisitions to boost IBM’s own software offerings, such as its 2013 acquisition of cloud-computing company SoftLayer. She knows she has to move quickly. “We have more to do, and we need to do it faster,” she told analysts last month.

    Wall Street has began to tire of IBM’s managed approach to earnings. But some investors believe the company should be investing more in R&D and acquisitions, and Rometty could be on a short leash.

    Marissa Mayer, CEO of Yahoo Inc.

    Marissa Mayer, CEO of Yahoo Inc.

    Yahoo Inc. surprised many in July 2012 when it named former Google Inc. GOOG, -0.60%  executive Marissa Mayer as CEO. Many of Mayer’s early moves to get the Internet pioneer growing again focused on improving Yahoo’s corporate culture to attract new hires, as well as making acquisitions and bolstering its media properties.

    Mayer’s efforts have helped almost double the price of Yahoo’s stock, but investors still mostly see the company as a way to investors for its stake in Chinese Internet giant Alibaba Group BABA, -0.76%  

    But that hasn’t assuaged some investors. In September, activist investor, Starboard Value LLC pushed the company to consider a deal with AOL Inc. and to detail its plans for its Asian investments. After last month’s earnings report, Mayer was on the defensive about her accomplishments so far, saying, “We are incredibly proud of the many things we have built over the past two years.”

    Results, though, show a paltry 1% revenue growth for Yahoo, with its core display and search business still declining, even with an improved mobile position and contributions from acquisitions like Tumblr. Keep a eye on Yahoo’s relationship with Starboard; activist investors such as Carl Icahn and Daniel Loeb have in the past had an impact on Yahoo’s board.

    Lisa Su, CEO of Advanced Micro Devices

    Advanced Micro Devices CEO Lisa Su

    Lisa Su, CEO of Advanced Micro Devices, is off to a bold start. Just weeks into her new job, AMD said it would cut 7% of its workforce after a third-quarter earnings disappointment.

    In her two calls with analysts so far, Su has been to the point. She made it clear that her focus would be on innovation and new products coming out of AMD, the perennial no. 2 to chip giant Intel Corp. INTC, -0.65%  . “I am really going to focus on the leadership products and differentiation,” she said.

    As part of the company’s diversification under former CEO Rory Read, AMD now develops graphics processor chips for the leading video game makers. AMD realizes it cannot count on a stable PC market for double-digit growth and Su, who most recently had been AMD’s chief operating officer, knows that the company is behind in mobile.

    AMD’s stock is down since Su became CEO. Analysts praise her abilities, but whether or not she can find new ways for AMD to grow, amid yet another restructuring, is the big question.

    Ursula Burns, CEO of Xerox Corp.
    Getty Images

    Ursula Burns, CEO of Xerox Corp.

    Ursula Burns had made her career at Xerox Corp. before being named CEO in 2009. When she took over, the company had undergone wrenching times, including an accounting scandal. Her predecessor Anne Mulcahy had brought the company back and restored profitability, but Burns still faced declining revenue and diminishing copier and printer usage throughout corporate America.

    One of her first moves was to buy a services company Affiliated Computer Services Inc., a $6.4 billion deal that pushed Xerox further into the IT services business. Services now accounts for 57% of Xerox’s total revenue. But the company continues to face challenges and falling sales in its core document/technology business, which saw revenue slip 6% in the most recent quarter.

    Xerox is struggling to rekindle revenue growth. In each of the last seven quarters but one, revenue has fallen in the single digits, and the one exception saw revenue was up a measly 1%, before the impact of currency fluctuations. “Overall our business model is healthy,” Burns told analysts last month on the company’s post-earnings call. “We’re making progress.”

    Burns possesses tech-savvy credentials, with a masters degree in engineering, a boon to anyone leading a tech-centric company. But after so many quarters of no growth at Xerox, Burns may need to step up innovation or acquisitions to deliver for investors.