Users offer advice to HP

Computerworld - In evaluating Hewlett-Packard Co. under former CEO Mark Hurd, one place to start may be from the offices of users such as Bill Schrier, Seattle's chief technology officer.

Schrier supports 10,000 HP desktops and laptops, its standard deployment, and uses HP and IBM servers in its data center.

Schrier said HP products are good, but the customer service is "continually challenged by communications" if back-order deliveries are involved.

"A new CEO might want to refocus on the customer service and ordering part of it," Schrier said.

Improving customer service might be a longer-term goal. HP's more immediate problem is the reaction to Hurd's forced resignation.

Larry Ellison, CEO of Oracle Corp., on Monday called the action by HP's board "cowardly corporate political correctness," according to an Associated Press report.

Hurd's resignation on Friday will have no impact on Schrier's business relationship with HP, although he said he is personally unhappy over Hurd's expense reports and the severance payment, which may be in excess of $30 million once all the stock benefits are counted.

Schrier said HP has turned into a full-service company and potential provider of cloud services for the city of Seattle, although he added that local companies Microsoft Corp. and Amazon.com Inc. will be looked at as well as other cloud providers.

Regarding the change in leadership, Les McCarter, director of IT infrastructure and operations at Hawaiian Electric Co., said, "I do not believe this will affect their ability to deliver their ongoing services and core competencies in our strong partner relationship."

An example was a hardware failure on Sunday at the utility. An HP tech was on-site and resolved the matter. "Boring but core IT services delivered," McCarter said.

Hawaiian Electric is a big HP shop, from desktop to Windows, Unix servers and SAN.

Regarding the leadership change, McCarter said: "Our main message would be to stay focused on delivering solutions, technology, service and value to HP's existing customers. Future growth is important to large tech companies, but ongoing, long-term continued revenue comes from existing customers. Don't lose sight of us."

Wall Street may be sending the board the same message.

Hurd did well with the financial community for a number of reasons, including its server market share.

In 2006, HP had $14.3 billion in worldwide server revenue and 27.2% of the market. Last year, HP had $12.9 billion in worldwide sales, but the recession sent the entire server market down by double digits. HP nonetheless increased its market share to 29.9%, according to market research firm IDC.

The server share growth reflects "the strength of their x86 server line," said Jean Bozman, an analyst at IDC.

During Hurd's tenure, HP also became the world's largest tech company, reporting $114.6 billion in revenue last year to IBM's $95.8 billion.

Despite the strong financial performance, the HP board faulted Hurd for expense reimbursements that were not for a legitimate business purpose. The expense reports involved a contractor, Jodie Fisher, who had alleged sexual harassment. The board found that Hurd had filed inaccurate expense reports to hide his personal relationship with the contractor. The board cited Hurd for breaches of its business conduct policy, but not sexual harassment.

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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