There was a time not too long ago when Hewlett-Packard simply became "HP." I'm not talking about the "HP" it's always been known as, but "HP" as the official new name of the company, supplanting Bill Hewlett and Dave Packard, and joining the ranks of KFC as a company running the risk of forgetting history for the sake of convenience and short-hand.
Well, in this time of revisionist history, maybe a new generation of investors and workers will come to understand HP as not Hewlett and Packard, but "Hurd's Project" instead. Hyperbole maybe, but do not underestimate the influence this CEO has had on the company's immediate past, and more importantly, its foreseeable future.
Mark Hurd is widely lauded for the turnaround measures he initiated. The turnaround is in the books, so now he's setting his sights on a wholesale reshaping of this company.
Monday's news, lost in the Lehman, Bank of America/Merrill Lynch, AIG, Washington Mutual tsunami, about HP's sizeable job cuts culminates its massive, $13.9 billion acquisition of EDS. The 24,000 job cuts -- which will come vastly from the EDS side of this equation -- work out to about 7.5 percent of the combined companies' more than 320,000 global workers. And while that number is eye-popping, anywhere from 10 percent to 15 percent was expected, or as many as 48,000 employees could have been cut.
But Hurd is a bottomline, results-oriented executive. He's trying to carve out a chunk of the enormous "services" part of the business that IBM has been exploiting these last several years. Taking a page out of Sam Palmisano's playbook, Hurd is repositioning HP as a services leader. But unlike IBM, it's keeping its PC business in tact. It's also got printers. And software. And each of these divisions seems to be helping HP fire on all cylinders.
Still, even with the EDS purchase, and the estimated $1.8 billion in annual cost-savings (the layoff, by the way, will cost $1.7 billion so the blockbuster savings will have to wait at least a little while as the company undergoes what's likely to be a wrenching integration) the new HP still pales in a services comparison to IBM: Big Blue generates better than $54 billion in services revenue against a combined HP/EDS services business of $39 billion. But like Hurd himself, don't underestimate the importance of this deal for the new HP from here forward.
Sure, HP might be a much smaller competitor to IBM . But it's a whole lot bigger than it was. And what used to be way behind -- a distant set of headlights in IBM's rear-view mirror -- is all of sudden much, much closer.
Hurd will hate that I've re-named HP with his name. I've sat with him and he's the first to say he's leading a team, setting the agenda, and offering support and guidance to others who execute his initiatives. He's not one to give away all the credit, but he's very quick to share it with all those around him doing the work.
Hurd came into HP as a darkhorse, little known, and much to live up to. Instead, he's shown not only that he had a vision for a new kind of company -- and slashed 15,000 jobs in those early days, like a sculptor jack-hammering away huge chunks of marble to start the ball rolling. The human toll has been severe. But for those remaining on the payroll, the image of this new company is truly taking shape. And those who have survived have the opportunity to work for a company far more solid than it was before Hurd got there.
He is sculpting a new HP. And IBM has to see the image now of a far more dangerous competitor. Still in IBM's rear view mirror. But gaining. Fast.
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