SAP's Apotheker to Lead HP in a New Direction

Within two months after a scandal forced CEO Mark Hurd to step down, HP has selected Leo Apotheker to take the reins of the company. Apotheker was formerly the head of SAP, and brings two decades of software experience to the HP leadership role to help HP turn the corner and compete head-on with IBM and Oracle.

HP has been aggressively expanding the portfolio of products and services it has to offer customers through an acquisitions buying frenzy--both before and after Hurd. In the past few years, HP has made some high profile purchases, such as EDS, 3COM, and Palm. Just in the two months since Hurd's departure, HP beat Dell in a bitter feud to acquire 3PAR, then turned around and purchased ArcSight. With Apotheker leading the way, HP may now aim its wallet at expanding its software presence.

Two months ago Mark Hurd was the face of HP, but now former SAP exec Leo Apotheker is ready to take the company in a new direction.
Analysts at Technology Business Research (TBR) believe that the selection of Apotheker brings unique talent to the HP leadership to strengthen its position to compete against rivals like IBM and Oracle in the software arena:

"HP is confident that hardware and services are on positive trajectories, and is once again filling out its portfolio by strengthening the third leg of the IT stool: hardware, software, and services. The experience Mr. Apotheker brings in running and selling an enterprise software company is directly beneficial to HP."

Businesses are generally more invested (or shackled, as the case may be) to their software than to the hardware it runs on, or the service providers they work with. Hardware and services are commodities that are easily replaced, but the software that the businesses rely on is the lifeblood of what they do and can't simply be changed or replaced on a whim.

By shifting in this direction, HP has an opportunity to sell solutions instead of features, and cross-sell its hardware and services in the process.

TBR analysts believe "this appointment is indicative of HP's satisfaction with its current strategic position in IT hardware and services. Having integrated EDS to form HP Services, increased already substantial market share in PCs and servers and with acquisitions in place to buttress its mobile devices, networking, and storage business, the company is looking to light a fire under its stagnant software business by appointing an experienced software CEO to run its entire business. This positions the company in direct competition across the board with the other horizontally integrated IT behemoths, IBM and Oracle."

Perhaps the board saw the need for a shift in direction and strategy, and pushed Mark Hurd out the door so it could find a new CEO with talents in the appropriate areas.

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