By William Fellows
In last week’s reorganization Hewlett-Packard Co CEO Carly Fiorina created four divisions with a president running each. Ann Livermore is to drive HP’s e-services initiative across the entire company, and manage and transform the total customer experience for its enterprise and commercial customer segments, which sounds like taking the reins of HP’s business-to-business relationships. She will also manage HP’s top 100 accounts, and gets responsibility for support and professional and financial services.
Think of what E-services has done since January for the Enterprise Computing Group, expand it to all of HP, and you get the general idea of Ann’s new organization, the company said. It claims to have won 35 E-services deals in that period. Nick Earle, who has been instrumental in articulating the company’s E- services strategy, will run marketing and E-services strategy, deals and alliances.
Antonio Perez currently runs digital-imaging and consumer products and now will also be responsible for brand management, advertising and HP.com. A new ad campaign will roll out in December that will focus on promoting HP as a single brand.
Fiorina has combined software, PCs, servers and storage, and this division will be headed by Duane Zitzner. Bill Russell is general manager of Enterprise Systems and Software and reports to Zitzner who is also charged with addressing the appliance market, which HP has yet to address with any credible strategy. Zitzner is said to have a three-month study of the appliance opportunity already underway. PC revenue growth is expected to reach between 10% and 15% this quarter, 35% to 40% by units. But Unix server growth is expected to slow to just 3% to 5% growth for the quarter, well below expectations. The US market is the culprit, where sales are flat, while Asia and Japan are up. This news appeared to catch the analyst community on the hop, as HP’s previously poor record of growth in Unix servers had been attributed to lack of an up- to-date product in the bread and butter mid-range market. The N- Class server plugged this gap, but does not appear to have stimulated sales accordingly. HP euphemistically says that poor performers have been removed, and that an overhaul of the sale force is underway which typically takes a couple of quarters to take hold in a company of HP’s size.
Carolyn Ticknor will head the printer division, where laser printers are now growing faster than ink jets and revenue for the quarter is expected to show growth in the mid-teens.
At a meeting with Merrill Lynch & Co Fiorina suggested that HP would accelerate the rate of acquisition it makes in the computer sector. The brokerage suggests that services and software are most the likely areas where HP would want to bring in new expertise.
Fiorina reportedly set herself a 90-day program of research to complete before the beginning of HP’s new financial year in November, including looking at where the company can grow, metrics for compensation and performance, cost structure, realigning the organization (see separate story), and revamping the brand. On cost reduction, Fiorina revealed a couple of things she’d turned up that need addressing, including the 750 internal web sites that HP has for training, as well as a 13-strong team it has working full-time to re-program its SAP and PeopleSoft applications to account for the 87-hour pay week it uses, a legacy of co-founder Dave Packard.
