blog




  • Essay / HP at a Crossroads - 1924

    Hewlett-Packard finds it difficult to rebuild May 18, 1999 was a banner day for Hewlett-Packard (NYSE: HPQ). Six months after a major internal reorganization, media and analysts were crowded into a campus auditorium in Palo Alto, California. The crowd was so large that there wasn't even a seat for Bill Russell, then HP's COO and executive vice president. systems and software group. He was reduced to leaning against a wall alongside the other latecomers. This standing-room-only crowd was there to hear HP's plans to redefine itself for the future. What he heard was an ambitious strategy to transform HP from a value-added hardware provider into a strategic Internet player, with a focus on software technologies far removed from what HP was known for. The Electronic Services Initiative, as it was dubbed, would transform HP. Almost immediately, every product in the HP portfolio received an e-services version. Within a month, Carly Fiorina was chosen to replace Lew Platt as CEO, and HP's stock soared to more than $135 per share by mid-July. Rather than continuing its momentum, HP then stagnated. Talent has passed through its doors, partners have defected and market share has disappeared. And the envied stock price? It now trades at around $30, only half its adjusted value in July 1999. Then there are e-services. To date, the most cutting-edge concepts presented at HP's release party—online brokerage, wireless services, and the ability for every business to transform its IT infrastructure into an outward-facing revenue stream—are not have not yet become a reality. What has happened to HP since it began reinventing itself in the spring of 1999? Some say the problem starts with the electronic services themselves. Others say the business just needs a little time. “E-services is a strategy and vision for the next generation of the Internet,” said Doug McGowan, general manager of HP's e-services solutions organization. "Some elements of that vision will come from us and [others from] our competitors. I think we're making tremendous progress. But this was never intended to be a six-month project." "Most people liked HP's official spokesperson, former senior vice president and chief marketing officer of HP's enterprise and commercial operations, Nick Earle, because he espoused HP's vision," said Joe Clabby. , vice president of the Aberdeen Group, based in Boston. Patricia Seybold and a few other consultants helped HP develop the e-services message, and she and her friends were brilliant. They took HP's old strengths in middleware development and highly available systems development and wrote a wonderful post..