Hewlett-Packard finds that making itself over is hard to do
VARBusiness logo By Chris Bucholtz
11:13 AM EST Mon. Feb. 05, 2001
From the February 05, 2001 issue of VARBusiness
May 18, 1999 was a banner day for Hewlett-Packard (NYSE:HPQ). Six months after a major internal reorganization, media and analysts were stuffed into an auditorium on its campus in Palo Alto, Calif.
The crowd was so large there wasn't a seat even for Bill Russell, then COO and executive vice president of HP's enterprise systems and software group. He was reduced to leaning against a wall alongside the other latecomers.
This standing-room-only crowd was there to hear HP's plans for redefining itself for the future. What it heard was an ambitious strategy to convert HP from a value-added hardware supplier into a strategic Internet player, with an emphasis on software technologies far removed from what HP was known for. The e-services initiative, as it was dubbed, would transform HP. Almost immediately, every product in HP's portfolio was given an e-services spin. Within a month, Carly Fiorina was tapped to replace Lew Platt as CEO, and HP's stock spiraled to more than $135 a share by mid-July.
Rather than build on all its momentum, however, HP then stalled. Talent slipped through its doors, partners defected and market share slipped away. And the envied stock price? It now trades at around $30--just half its split-adjusted value in July 1999.
Then there's e-services. To date, the more forward-looking concepts outlined at HP's coming-out party--online brokering, wireless services and the ability for every enterprise to turn its computing infrastructure into an outward-facing revenue source--have yet to become a reality.
What has happened to HP since it ...