The revelations of dubious tactics used by chairwoman Patricia Dunn to deal with boardroom leaks led to her recent resignation. CEO Mark Hurd is now acting as chairman. Ms Dunn had sanctioned ‘pretexting’ of suspected board members – investigators had obtained personal ID information on these individuals, and used it to gain copies of confidential telephone records.

As noted in a recent Observer article, this is not the first time HP has been caught in dubious activities. In 2002, it hired an agency to obtain information on the IT strategies of its largest customers – the problem was that the agency used impersonation to get into these organizations. Market information gathering falls under competitive intelligence (CI) and is a vital activity for any company, especially ones at the top in a combative market. The art is in keeping on the right side of ethical behavior. Simply hiring third parties to do the work and not asking too many questions about their methods does nothing for one’s reputation.

These are embarrassing times for HP, a company that many fear has lost its direction. Its decision to acquire PC manufacturer Compaq at a time when IBM saw fit to sell its PC division to the Chinese forces home the impression that its executives cannot read the direction markets are taking. The decision to acquire Compaq, which divided HP executives down the middle between those for and against, was one taken by ex-CEO Carly Fiorina, and discovering the source of the boardroom leaks surrounding her departure were the investigations that Ms Dunn had sanctioned.

However, all is not bad news at HP. Its recent acquisition of Mercury may yet prove to be the most prescient of market moves. Mercury was a highly successful company in the software testing and quality assurance space that had broadened into application performance management and IT governance. Its demise as an independent entity was largely due to, dare it be said, purely boardroom issues. However, Mercury’s acquisition of service-oriented architecture (SOA) governance tool vendor Systinet just before it was itself acquired lands HP with a golden opportunity.

The SOA market is set to flourish, not least because it simplifies the development and provision of services and applications, making businesses far more flexible. The downside is a greater burden transferred to management and governance practice. This is exactly where HP’s Mercury/Systinet combination can deliver solutions and have the greatest impact.

Amid announcements of 15,300 layoffs, and analyst revenue forecasts of $91.2 million, that will, incidentally, make HP the largest technology company in the world. Mark Hurd has described the company as being in transition. The upside is that HP is now well placed to succeed in the IT services and performance management market.

Source: OpinionWire by Butler Group (www.butlergroup.com)