IBM Chief Trash Talks HP, Hurd
IBM chief executive Samuel J. Palmisano apparently is underwhelmed by rival Hewlett-Packard's recent moves -- and he's not afraid to say so.
In an interview with the Wall Street Journal, Big Blue's CEO blasted HP on several fronts.
Palmisano essentially called HP foolish for overpaying to purchase computer storage vendor 3PAR Inc. (NYSE: PAR) earlier this month after winning a bidding war with Dell. HP is spending $2.4 billion, or $33 per share, to buy 3PAR, a company whose stock spent the better part of the summer in the $10 per share range. Even today, after the bidding war sent shares skyrocketing, 3PAR's market cap is only barely over $2 billion.
Well, when you put it that way, Palmisano has a point. Yet the IBM leader tells the Wall Street Journal that HP "had no choice." Which leads to slam No. 2. From the WSJ:
Former HP CEO Mark Hurd "cut out all the research and development." Mr. Palmisano said he doesn't worry about companies such as HP that have slashed their investments in core technologies. "HP used to be a very inventive company," Mr. Palmisano said.
It's hard to glean subtext from a print interview, but one suspects Palmisano wasn't being wistful about HP's fall from glory.
But Sam wasn't done talking about HP. Slam No. 3: The departure of Hurd -- highlighed by his $35 million severance package and subsequent hiring by rival Oracle a few weeks later -- "was not handled in the best interest of the shareholders."
To hear Sam tell it, it sounds like the entire tenure of Hurd wasn't in the best interests of the shareholders. And even though Palmisano's impression of Hurd is bitingly negative, he heaps praise on Hurd's new employer, citing Oracle's "cash flow and good margins" and willingness to invest.
No doubt he can't wait for Hurd to work his magic at Oracle.