Do not neglect high-end users, HP warned after Fiorina's exit

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Do not neglect high-end users, HP warned after Fiorina's exit

Lindsay Clark
Concern as departing CEO talks of her tactical differences with the Hewlett-Packard board.

Major corporate users will seek assurances from Hewlett-Packard that their needs will continue to be addressed following last week's sudden removal of Carly Fiorina as company chairman and chief executive.

HP insisted the departure of Fiorina, who drove through the takeover of Compaq in 2002, did not mark a change in strategic direction. But in her resignation statement Fiorina spoke of her "regret" that "the board and I have differences about how to execute HP's strategy".

After joining HP in 1999 Fiorina attempted to build the company into a rival to IBM, deliver- ing a complete set of IT hardware, software and services. In an effort to reassure HP's enterprise users, often acquired through takeovers, she also laid out roadmaps for high-end products, with Alpha supported until 2011 and Open VMS supported until 2018.

Users now fear this certainty could be at risk. Margaret Smith, chief executive of IT directors' group CIO Connect, said a new chief executive could take HP down a fundamentally different path.

Colin Butcher, vice-chairman of the HP User Group in the UK said, "HP would do well to remember its enterprise heritage. It has got all those high-end systems: there are a huge number of users that depend on them." Users relying on HP for mission-critical work should make their concerns known to the company at the highest level, said Butcher.

Analyst firm Gartner said the replacement of Fiorina would not signal any immediate change in HP's strategic direction, but it warned that this could change six months after a new chief executive is appointed.

However, Rob Enderle, principal analyst at research firm Enderle Group, offered some reassurance to corporate users. He pointed out that any new chief executive at HP would not want to alienate users of systems that offer good service revenues.

Mike Davis, senior research analyst at Butler Group, said Fiorina's removal could lead to further investment in the company's enterprise strategy, where it competes head-to-head with IBM.

Robert Wayman, HP's chief financial officer, will act as chief executive on an interim basis.

HP's expansion

1997: Compaq buys Tandem for £1.6bn. The firm supplies high-end servers and online transaction systems to major banks.

1998: Compaq buys DEC for £5.1bn, making it the third largest computer company in the world.

1999: Carly Fiorina joins HP as CEO.

2002: Hewlett-Packard completes £20bn merger with Compaq.

2004: HP buys UK services company Synstar for £157m to boost its services and help it compete against IBM.

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