Mark Hurd's career at HP meets an unlikely end

The former CEO avoided attention; he was all about operations, though he could be tough

Mark Hurd
Former HP CEO Mark Hurd.

Hewlett-Packard Co.'s former CEO Mark Hurd was not a typical Silicon Valley chieftain. He rarely sought the stage, a la Apple's Steve Jobs, and he wasn't interested in traveling to Washington, D.C. with Google's Eric Schmidt to help shape big policies.

Hurd avoided the press and didn't even speak at the company's enterprise technology conference this year in Las Vegas. He left that to other HP executives, people who are now his possible successors, including Ann Livermore, executive vice president for HP's enterprise business, and David Donatelli, executive vice president and general manager for enterprise servers and networking.

That lack of attention-seeking by Hurd makes his resignation Friday afternoon as CEO particularly ironic: People who didn't even know who he was because of his low profile will now remember him for the way he left the company's top job.

HP announced late Friday that Hurd was stepping down after a former marketing consultant alleged that he sexually harassed her. A probe found that Hurd had had a personal relationship with the consultant and hid it from the board by using inaccurate expense reports.

But there's a lot more to the story of a person analysts say was an exceptional manager, the person who turned HP around after the dot.com bubble burst and kept it moving forward after CEO Carly Fiorina was fired in 2005. (Fiorina is now running as a Republican candidate for the U.S. Senate in California.)

Hurd was an operations manager. He focused on the spending, the deliverables -- and on keeping investors confident. He didn't talk about his vision very often, he just executed on it. On his watch, HP bought EDS for $13.9 billion; 3Com for $2.7 billion; Palm for $1.2 billion; and a steady stream of software companies, notably Opsware Inc. for $1.6 billion. His goal: to build a product portfolio.

Hurd's effort to create a company that could compete in services as well as assemble end-to-end products for enterprises was paying off in ways that are hard to dispute.

In the first quarter of this year, HP held the No. 1 position in worldwide server market share, with 32.5%, said IDC.

Hurd, who took the HP job after Fiorina's departure in 2005, also rebuilt the company internally, tasking CIO Randy Mott with consolidating HP's data centers, automating the heck out of them, and cutting the application portfolio.

Employees were cut, including 25,000 layoffs announced in September 2008, the same month Wall Street started to implode in the financial crisis. Some analysts felt he went too far, cut too deep, and paid too much for EDS.

"Mark Hurd drove an amazing turnaround at HP and really made it operationally brilliant," said Martin Reynolds, an analyst at Gartner Inc. But Hurd also "squeezed the image of HP as an innovator," with a lot of focus on cost. Bringing a stronger focus to innovation is something a new CEO could bring to HP.

"There is an opportunity here to bring in new leadership here who can build on Mark Hurd's foundation," said Reynolds.

"It's an awful thing when this happens to anybody," said Charles King, an analyst at Pund-IT, of the circumstances behind Hurd's exit.

"He was also seen as being a very strong operations guy - he had a reputation of being the guy who would come into companies that were operationally inefficient and take names ... and bring those companies back into fiscal balance," said King.

"He was very bold in the way he cut and restructured companies, but he was also extremely aggressive that way," said King.

"The thing that was so amazing about Mark Hurd in his role at Hewlett-Packard was his ability execute on multiple fronts, "said Crawford Del Prete, an analyst at IDC. HP's acquisitions under Hurd's tenure, such as EDS, were "transformative," bringing in skills that HP didn't have, and allowing the company to be far more competitive than it was before he got there.

Del Prete said that, under Hurd, HP has been good at selling the parts of technology companies want and need -- servers and PCs -- but not the entire set of needs.

Analysts don't expect any disruption in the company's operations as a result of Hurd's departure -- something they credit Hurd with.

HP plans to conduct an external and internal search for a replacement, but Jean Bozman, an analyst at IDC, said some of the current crop of HP executives may be attractive to to the board. "There is a fair amount of people inside who can take his place," she said.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov or subscribe to Patrick's RSS feed . His e-mail address is pthibodeau@computerworld.com.

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