Is HP Considering Ouster of CEO?

Reports claim Meg Whitman is candidate for replacement.

Recent announcements from Hewlett-Packard Co. may be about to take their toll on CEO Leo Apotheker.

HP's board is meeting today to discuss replacing Apotheker, according to several published reports citing unnamed but informed sources. The news, first reported by Bloomberg has met with a "No comment" response from HP.

Former California Republican candidate for governor and ex-CEO of eBay Meg Whitman, currently a board member, is reportedly a candidate for the position, the reports claim. Whitman as added to the board earlier this year following a shakeup of the company's board.

Wall Street was positive about the news, sending HP shares higher by over 7 percent for the day.

If HP does fire Apotheker, it would mean hed have served less than a year after taking over from CEO Mark Hurd, who was ousted following expense report discrepancies and allegations of sexual harassment that proved to be unsubstantiated.

Apotheker was formerly CEO of software firm SAP for less than a year. His tenure at HP has been shaky. HP lowered its revenue forecast for three consecutive quarters under his leadership.

A series of announcements last month left customers confused; the company said it would consider selling or spinning off its PC business and revealed its plan for a $10.3 billion acquisition of software provider Autonomy. It also stated it would discontinue the TouchPad, the slate computer designed to compete with Apple's iPad.

The moves have raised numerous questions. While HP is looking to emphasize higher-margin growth areas such as software and services, it has also positioned itself as a supplier of the complete IT stack. Though PC manufacturing is a notoriously low-margin business, HP is the market-leading supplier of PCs and enjoys economy of scale across its hardware businesses given its huge clout as a purchaser of computing components such as memory, CPUs, and disk drives. Critics questioned the wisdom of pre-announcing the possible divestiture of its PC business.

Apotheker's decision to jettison HP's slate and mobile phone business also came as a shock, coming about six weeks after HP released the TouchPad slate. Prior to the about-face move, HP had talked up the TouchPad and the webOS platform that powers it as key components of the company's push into cloud computing.

Meanwhile, HP's agreement to acquire enterprise search vendor Autonomy has had critics questioning the $10.3 billion price tag (see "Will Autonomy Save HP?"). Autonomy had sales of less than $1 billion last year, meaning HP has agreed to acquire Autonomy for 11 times its revenues.

About the Author

Jeffrey Schwartz is editor of Redmond magazine and also covers cloud computing for Virtualization Review's Cloud Report. In addition, he writes the Channeling the Cloud column for Redmond Channel Partner. Follow him on Twitter @JeffreySchwartz.

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