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By Paul Losch

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About this blog: I was a "corporate brat" growing up and lived in different parts of the country, ending in Houston, Texas for high school. After attending college at UC Davis, and getting an MBA at Harvard, I embarked on a marketing career, mai...  (More)

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Another HP Setback/Tragedy

Uploaded: Nov 20, 2012
A multi-billion dollar write off announced today, due to shoddy due diligence relating to HP's acquisition of Autonomy a couple years ago.

HP stock drifting downward, will likely go below $10, from this year's high of nearly $30.

This company is (or maybe was?) our neighbor. I suspect most of us know people who work there or did at one time. The catharsis this company has experienced for all too many years seems endless.

My opinion is that former CEO's John Young and Lew Platt saw the writing on the wall. They saw a company in trouble, and were honest enough to admit that they did not know just what it would take for it to "Invent."

I fault HP's Board of Directors, who for years have agreed to hire flawed CEO's, which led to poor leadership, confusing strategies, and a company I cannot understand. To use a phrase that consultants from the likes of McKinsey and Bain (with apologies to Meg Whitman) "what business are we in?"

Meg has gravitas, and she likely is reconciled that HP has to broken up, as hard as that is to do. The foolish merger and acquisition strategy was poorly thought out and badly executed.

I do like walking by the Addison Street property that is now an historical site that commemorates the "garage" in which Bill H and Dave P got started.

Historical in one thing. History is another.

Comments

 +  Like this comment
Posted by Kerry, a resident of ,
on Nov 20, 2012 at 1:06 pm

Paul,

How do you see HP viz a viz Cisco? Both companies have had their ups and downs, yet Cisco seems to have tightened it focus, even though it is a M&A model. At one point, there was concern at Cisco that HP was serious compeition. Is this still the case?

Can HP follow on Cisco, and get its act together?


 +  Like this comment
Posted by Paul Losch, a resident of ,
on Nov 20, 2012 at 5:17 pm

Paul Losch is a registered user.

Kerry,

You ask questions well above my pay grade for this blog.

I did buy Cisco stock in 1993, and thank you very much, my IRA is better for it.

Keep it simple. HP has not done that the last 10+ years. Carly F. strutting around stages, Mark H. as Mr. Efficiency Expert, German guy who was not a good fit. Now Meg Whitman, whom I highly regard, and she is dealing at this point with a pig in a poke.

Cisco stock has not done well the last few years from a valuation standpoint, but I hold the stock because it does appear to understand its fit in the scheme of things.

Contact your financial advisor.


 +  Like this comment
Posted by Kerry, a resident of ,
on Nov 20, 2012 at 5:42 pm

Paul,

Do you think that HP, if taken over by Oracle or Bain could be turned into a profit center, thus saving jobs in Palo Alto?


 +  Like this comment
Posted by Bain, a resident of ,
on Nov 20, 2012 at 6:05 pm

How would a vulture capital firm (not venture) save jobs in Palo Alto?

Besides, Meg is tied into the bain crowd, hasn't helped yet.


 +  Like this comment
Posted by Hmmm, a resident of ,
on Nov 20, 2012 at 6:16 pm

Yep,the comment above shows good insight. I think both sides were less than ethical & now they're pointing fingers.


 +  Like this comment
Posted by Gisele, a resident of ,
on Nov 20, 2012 at 6:30 pm

[Post removed by Palo Alto Online staff.]


 +  Like this comment
Posted by Ducatigirl, a resident of ,
on Nov 20, 2012 at 6:32 pm

My husband has been saying for years that the HP Way died with David Packard. He and William Hewlett must be spinning in their graves.


 +  Like this comment
Posted by Sharon, a resident of ,
on Nov 20, 2012 at 7:02 pm



IBM in the early 90s faced the same challenges as HP at that.

1/ A culture of life time employment with no connection to performance

2/ A culture of politeness, conflict avoidance and consensus decision making

3/ Reduced revenues for its main product-Big Iron -and increased competition from companies like SUN

IBM hired a new CEO who turned IBM around into a consulting and professional services company-Chambers-CISOs Ceo was employed by IBM at that time-he learned the lessons.

When John Young became CEO of HP in the 90s he had a company that had

1/ A culture of life time employment with no connection to performance

2/ A culture of politeness, conflict avoidance and consensus decision making

3/ Reduced revenues for its main product-Big Iron -and increased competition from companies like SUN

Young did nothing, Lew Platt did stupid things-after that they payed lots of money to useless PR companies like cunningham communications and tried to spin their way out of what was and is a death spiral

Meanwhile CISCO applied the lessons from IBM and transformed itself from a Product Company to a Systems and Solutions Company

While HP hired a succession of incompetent fools as CEO and fired the only competent one - Hurd- for some silly Politically Correct/PR Psychobable reason


 +  Like this comment
Posted by Sandrine, a resident of ,
on Nov 21, 2012 at 2:10 pm

[Post removed due to same poster using multiple names]


 +  Like this comment
Posted by Gisele, a resident of ,
on Nov 21, 2012 at 2:15 pm

[Post removed due to same poster using multiple names]



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