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AnonymousInactivehttp://www.forbes.com/forbes/2010/0412/technology-hp-mark-hurd-ibm-cisco.html?partner=contextstory
HP’s CEO MARK HURD ……HE WANTS IT
ALL !!!
The
plan to win the battle of the tech titans.
Hewlett-Packard
Chief Executive Mark Hurd likes things big and simple. His boardroom
has a big empty table and a big videoconferencing screen. A large tablet
of blank paper leans on a tripod, allowing him to sketch big numbers to
seal a point. The room’s sole decoration is an outsize cylinder
bursting apart with springs. Its label reads, “big can of whup ass.”
Hurd
has done his share of whuppin’ since he took over HP in April 2005. The
company had pulled in $80 billion of revenue for the Oct. 31, 2004
fiscal year, a figure scarcely changed over the four years since the
merger with Compaq Computer. For fiscal 2009 the take was $115 billion,
or annualized growth of 7% over the last five years. Net income during
that period has been up an average 18% per annum to $7.7 billion and
jolted ahead 25% in the first fiscal quarter of 2010. All this is thanks
to dramatic cost-cutting, the standardization of large-scale purchases
like semiconductors–and a brutalizing culture of accountability for
every penny in and out.HP’s chief has also imposed a ruthless
efficiency at the highest levels. By packing the board and senior
management with more Midwesterners than Silicon Valley insiders, and
adding a lot more hard-core business types than engineers and inventors,
he has remade HP more in his own image–people who thrive on
dissatisfaction and thirst for expansion. You see it reflected in the
August 2008 $13.9 billion acquisition of Electronic Data Systems and the recent $2.7 billion grab of 3Com , the Chinese networking company, and in the relentless push to
grab new large customers. “Growth comes about two-thirds from M&A,
25% organic”–that is, winning business from rivals–“and 10% from a big
new idea,” says Hurd, 53. “We are now $20 billion bigger than IBM, in a
$1.7 trillion market for technology. For us it breaks into enterprise,
SMB [small and medium businesses] and consumer.” But for all that, 70
cents of every HP revenue dollar comes from 2,000 big companies.Size
matters in this business. With the explosion of computer networks and
data, customers–willing to shell out for multiyear contracts of tens of
millions of dollars and more–need a vendor that can manage many
aspects of many businesses and help them find efficiencies within and
among them. Clients don’t want to deal with a dozen different
salespeople from as many different companies every time they upgrade
equipment or introduce a new app. The new titans of the one-stop world
include Oracle, which recently added to its database empire the remains
of Sun Microsystems, maker of computer servers;
IBM, the longtime consulting, software and mainframe powerhouse; Cisco
Systems , now with servers built into its
network, and alliances with data storage giant EMC and virtualization
software maker VMWare.Hurd intends to grab as much of that
action as he can. Last year he spent a lot of time calling on customers
and prospects, meeting with roughly 3,000 chief information officers
worldwide (mainly through roundtables) and is on track to exceed that
number this year. It means selling a lot more than the low-margin
personal computers and printers that make up most of the HP brand, more
than the cheap outsourcing and maintenance deals the company moved into
before Hurd arrived. Since then he has pushed into so-called
industry-standard computers–machines built with off-the-shelf commodity
chips–and bought companies in markets related to HP’s core hardware
and service businesses. In January it announced a $250 million
investment with Microsoft to develop and market
hardware, software and services for cloud computing, a way of getting
at supercomputing power through an Internet browser. Putting on a new
face, HP is spending $40 million on “Let’s Do Amazing,” a rebranding ad
campaign. Hurd, in other words, is taking direct aim at IBM and Cisco,
whose consulting and networking businesses are among the last
high-margin sells in the cutthroat world of tech. -
AuthorMay 3, 2010 at 12:24 PM
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