The New CEO is a Software guy and has Prior Experience only in Enterprise Sales – A clear mismatch with the current philosophy of HP – The largest IT company in the World. Is he the right choice?
On a cold Sunday afternoon of February 2009, Leo Apotheker, who had moved into the CEO chamber at the $46 billion technology giant SAP’s Waldorf headquarters barely seven months back, shot across a sorrow-laden email to his employees. It read thus: “The pace of change was probably too rapid. My communication toward you was not always optimal. I regret that I wasn’t able to earn the support of each and every one of you...” So what forced him to wear the cloak of humility? The Board of Directors at SAP had refused to renew his contract following his underperformance. The financials had turned turbid, as SAP recorded the first fall in top & bottomlines in 7 years, which plummeted by 8% to $14.6 billion and 7% to $2.48 billion respectively in FY2009. Other matters disappointed the shareholders further, which included the withdrawl of SAP from the Sun acquisition talk (which Oracle finally bought, killing chances of SAP becoming invulnerable), the failure to get on board 10,000 customers for his expensive service software project Business By Design by 2010 (which never saw the light of the day during his tenure), his inability to get SAP’s products in-line with the changing trends in enterprise software, et al. His fate was sealed.
But just as surprised as the world was when he was offloaded by SAP’s Board even as his 75 minute-long debut CEO keynote at Orlando was being forgotten, the $98 billion tech-giant Hewlett-Packard proved yet again (after Hurd’s unceremonious exit on August 6, 2010) why it is good at making news. Apotheker had just been announced the scandal-marred HP’s new blue-eyed boy. As for the shareholders, their grief was visible as the HP stock fell by 4.32% on the first trading day following this announcement on September 30, 2010 – wiping away $4.2 billion of value. Rick Sturm, CEO, Enterprise Management Associates (EMA), while speaking to B&E from Colorado, says, “Investors have indicated that they doubt Apotheker’s ability to lead HP. This choice by the HP board is likely to end up being seen as an unbelievable act of stupidity.”
Of what can be observed from Apotheker’s past, seems unsettling. In recent times, HP has been plagued by unethical issues leading to high-profile exits. With Apotheker, it appears that this corporate legacy will live on. The German is currently involved in a courtroom dust-fight, where Ellison-led Oracle is claiming more than $2 billion in damages from SAP. Oracle claims that Apotheker was at the centre of an illicit activity four years back, which saw workers at SAP’s TomorrowNow subsidiary steal copies of Oracle’s maintenance services software. HP’s honour will therefore again receive some clubbing on November 1, 2010 – officially Apotheker’s first day as HP’s CEO – when he presents himself before court to defend SAP’s case, as Massachusetts-based Charles King, President, Mindspring Research tells B&E, “Apotheker could leave HP with eggs on its face. Oracle never bothered listing Apotheker as a witness for its trial with SAP.” What a way to kickstart your tenure as HP’s CEO!
On a cold Sunday afternoon of February 2009, Leo Apotheker, who had moved into the CEO chamber at the $46 billion technology giant SAP’s Waldorf headquarters barely seven months back, shot across a sorrow-laden email to his employees. It read thus: “The pace of change was probably too rapid. My communication toward you was not always optimal. I regret that I wasn’t able to earn the support of each and every one of you...” So what forced him to wear the cloak of humility? The Board of Directors at SAP had refused to renew his contract following his underperformance. The financials had turned turbid, as SAP recorded the first fall in top & bottomlines in 7 years, which plummeted by 8% to $14.6 billion and 7% to $2.48 billion respectively in FY2009. Other matters disappointed the shareholders further, which included the withdrawl of SAP from the Sun acquisition talk (which Oracle finally bought, killing chances of SAP becoming invulnerable), the failure to get on board 10,000 customers for his expensive service software project Business By Design by 2010 (which never saw the light of the day during his tenure), his inability to get SAP’s products in-line with the changing trends in enterprise software, et al. His fate was sealed.
But just as surprised as the world was when he was offloaded by SAP’s Board even as his 75 minute-long debut CEO keynote at Orlando was being forgotten, the $98 billion tech-giant Hewlett-Packard proved yet again (after Hurd’s unceremonious exit on August 6, 2010) why it is good at making news. Apotheker had just been announced the scandal-marred HP’s new blue-eyed boy. As for the shareholders, their grief was visible as the HP stock fell by 4.32% on the first trading day following this announcement on September 30, 2010 – wiping away $4.2 billion of value. Rick Sturm, CEO, Enterprise Management Associates (EMA), while speaking to B&E from Colorado, says, “Investors have indicated that they doubt Apotheker’s ability to lead HP. This choice by the HP board is likely to end up being seen as an unbelievable act of stupidity.”
Of what can be observed from Apotheker’s past, seems unsettling. In recent times, HP has been plagued by unethical issues leading to high-profile exits. With Apotheker, it appears that this corporate legacy will live on. The German is currently involved in a courtroom dust-fight, where Ellison-led Oracle is claiming more than $2 billion in damages from SAP. Oracle claims that Apotheker was at the centre of an illicit activity four years back, which saw workers at SAP’s TomorrowNow subsidiary steal copies of Oracle’s maintenance services software. HP’s honour will therefore again receive some clubbing on November 1, 2010 – officially Apotheker’s first day as HP’s CEO – when he presents himself before court to defend SAP’s case, as Massachusetts-based Charles King, President, Mindspring Research tells B&E, “Apotheker could leave HP with eggs on its face. Oracle never bothered listing Apotheker as a witness for its trial with SAP.” What a way to kickstart your tenure as HP’s CEO!
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri's Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM's Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human FaceProf. Arindam Chaudhuri's Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM's Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
