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March 31, 2005updated 19 Aug 2016 10:11am

HP’s New CEO: Questionable Qualifications?

When HP announced it has finally found a new CEO in the shape of former NCR CEO Mark Hurd, a few eyebrows were raised, and rightly so. While Hurd has 25 years of technology industry experience, all of those 25 years have been spent at one vendor -

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When HP announced it has finally found a new CEO in the shape of former NCR CEO Mark Hurd, a few eyebrows were raised, and rightly so. While Hurd has 25 years of technology industry experience, all of those 25 years have been spent at one vendor – NCR. Does the fact that NCR performed well during his two-year tenure as CEO there make up for the fact that NCR is the only company he has ever worked for? We shall have to wait and see.

Hurd started at NCR as a field salesman straight out of college, where he won a BA in business administration, and he subsequently held various management, operations, and sales and marketing roles. HP was keen to emphasize that his career at NCR culminated in a two year tenure as CEO, and that in fiscal 2004, NCR generated revenue of $6bn, up 7% from a year earlier, and net income rose nearly fivefold to $290m.

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Fair enough – Hurd can clearly drive efficiency and get a company to perform. But will a 25-year career at a so-called ‘Relationship Technology’ vendor, and just two years’ experience as a CEO, be a good match for a company that does everything from digital cameras to supercomputers? What about outsourcing – HP’s outsourcing deal with Procter & Gamble alone is probably larger and more complex than the whole of NCR’s outsourcing business put together.

It will also be fascinating to watch whether he has any more luck integrating the acquired Compaq business into HP than his predecessor Carly Fiorina. Remember that back in October Fiorina admitted at a conference in Taiwan that, "Compaq, while it was a huge merger, was a tactic, not a strategy. The challenge now is to leverage what we have built."

Since HP bought Compaq in 2002, it seems HP’s board may have decided that the integration needed a new figurehead – the Compaq debacle is considered one of the key reasons behind Fiorina parting company with HP. So will Hurd do any better? Again, we shall have to wait and see, but NCR has not exactly made a lot of acquisitions of its own, particularly while Hurd was CEO. In the last two years it made only tiny acquisitions: Kinetics (for $26m – hardly on the scale of HP’s Compaq merger); Innovasys; Copient and Bantel. They were such small acquisitions that integrating them was presumably not a terribly tough job. Compaq, on the other hand…

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