When I first heard the news that Hewlett Packard was about to warn that coming quarters wouldn’t be what Wall Street expected, I thought:
AP
Hewlett Packard
—New CEO.
—Big Warning.
—Something smells.
My interpretation of the stench: That in a backhanded way, CEO Leo Apotheker is saying that his predecessor Mark Hurd had run the company for the short-term to please Wall Street, not to create a business.
Talking about the expected slide in margins for the company's services business, he said that after "digging into our services business and diving even deeper, I have concluded we didn't invest in the path to support the strategy. Instead, HP focused on its shorter-term margins."
That’s blaming prior management on managing for the short-term at the expense of the long-term is something you almost never see or hear. And it’s important, because even though the services business is only 27 percent of sales, it has been the most profitable part of the company.
But in recent years the services top line has also been largely stagnant, and that gets to the question:
What is Hewlett Packard , anyway?
Outside of printers, what's its strategy? Can anybody really articulate it?
Is HP an IBM wanna be? Or is it destined to be yet another lumbering tech giant that can't get out of its own way?
This much is clear: In the process of trying to figure it out appears as though Apotheker isn't going to play the quarterly earnings game.
Questions? Comments? Write to HerbOnTheStreet@cnbc.com
Follow Herb on Twitter: @herbgreenberg
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