10 Reasons Why HP Revenues Hit $100 Billion
6:49 PM EST Mon. Nov. 19, 2007
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1. Hired Carly Fiorina as CEO. What's this you say? One of the most controversial industry CEOs in recent memory, Fiorina never figured out the HP Way and her tenure was marked by internal struggles. But she did engineer the takeover of Compaq. Only Fiorina, the consummate corporate politician, could have fought the Hewlett family and widespread shareholder and employee dissent to garner enough votes to swing the $87 billion merger. That merger transformed HP into the industry standard server powerhouse and wrestled the lead in the PC industry away from Dell (NSDQ:Dell).
2. Fired Carly Fiorina. She honchoed the deal through, but she couldn't get the Compaq and HP people on the same page. The two cultures clashed between the volume Compaq mentality and the value HP mindset. Nowhere was that more evident than on the channel side of the business. HP value players couldn't stomach the pump up the volume music foisted upon them by former Compaq folks thrust into key channel positions. Thankfully, the HP board finally said enough to this infighting and gave Fiorina the golden parachute.
3. Refused to break up the company. Many shareholders, analysts and industry pundits felt that the HP crown jewel was its printing and imaging business. Spinning that out into a separate company, they reasoned, offered the best hope to recoup the value on what they maintained was an ill plunge into the low-margin PC business via the Compaq merger. As it turns out, HP now has the most complete product portfolio with which to go after the coveted SMB market.
4. Enlisted the channel as a strategic ally. What good is the best SMB product portfolio without an army of solution providers to attack the market? Dell's newfound channel religion shows the limitations of a direct strategy. And IBM's sale of its PC business shows the danger of getting out of what it deemed to be a low-margin market segment. Sure the margins are low. But IBM lost contact with SMB solution providers as a result of the PC sale and HP was more than happy to fill the void.
5. Hired Mark Hurd. HP needed an outsider with operational experience and no agenda. He eliminated many redundancies and quelled much of the infighting. Hurd too takes the time and effort to meet with and listen to solution providers. Most high-profile CEOs view the channel as a faceless, amorphous beast. Hurd's taken the time to learn that the channel is human—good, bad and ugly. Under his guidance, HP's tried to embrace the good, and it's paid off. As one solution provider said Monday after hearing HP cracked the $100 billion barrier, "Hurd's the man."
Next: Conflict Resolution, Profitability, Channel Marketing All Make A Difference
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