Stupid CEO Tricks
Vacancy at Hewlett-Packard
I’m sorry to have been so out of touch lately. The Startup Tour continues, of course, but this week I also have an Op-Ed article appearing in Sunday’s New York Times that I had to write. It is about Google and Verizon and may give a new perspective on recent events between the two companies. Look for it.
This week brought two other news events worthy of comment — Intel’s settlement with the Federal Trade Commission and Mark Hurd’s sudden departure as CEO from giant Hewlett-Packard.
The Intel story is almost as it is being presented in the trade and general press. Yes, Intel has promised in very specific ways to no longer be evil. No, Intel isn’t being made to give back the money it made as a result of being evil, so to a certain extent crime does pay. Of course some will say the money damages were in part covered by Intel’s recent $1.25 billion settlement with AMD, but the FTC also doesn’t generally impose fines. So if you happen to be guilty of anti-trust I guess it is better to be sued by the FTC than by the DoJ, which does impose fines.
Either way, Intel got away with something and the graphics chip makers in particular should be pissed.
One area where I think the press has it wrong, however, is in its interpretation of Intel’s promise to preserve the PCI Express bus. Third-party graphics cards use this bus and the fear of those companies is that Intel will simply replace PCI Express with some incompatible bus, making the third-party GPU chips and boards obsolete in the process. Now with the new FTC agreement they are promised at least six years before Intel deep-six’s PCI Express.
If only it were that simple. What the agreement actually says is that Intel has to preserve PCI Express for six years but not that it can’t introduce a new — and incompatible — graphics bus.
And that’s exactly what Intel will do. They’ll keep PCI Express but then add a new bus that’s wider and faster and generally better all-around. Even a mediocre Intel GPU that works on the new bus will have more than a fighting chance against NVIDIA or ATi (AMD) cards that work only with the older bus.
Why doesn’t the FTC see this? Because when it comes to the technical internals, they are stupid.
And speaking of stupid, super-smart HP CEO Mark Hurd got the boot this past week for filing improper expense reports and hitting-on a marketing consultant. There is no doubt that Hurd is (was?) the best big PC company CEO of his generation, a true genius who brought HP back not from the brink as Steve Jobs did at Apple, but back a long way back to PC market dominance while Dell self-destructed in response. But Hurd also appears to have had few friends at HP or he could have ridden-out this boneheaded thing or at least held on a bit longer.
Brilliance combined with power can lead to isolation and eventually to arrogance. Hurd was arrogant.
I recall being asked to make a film for HP in the early days of Hurd’s reign and the people I spoke with fairly high up in the company were afraid of the guy. And now he’s safely out of the way so HP can return to sleep if it chooses.
I’m not saying Hurd should have stayed, just that his departure probably was worth the 10 percent drop in market cap that followed the announcement of his resignation.
The best way for HP to recover from this is, of course, to find a CEO even better than Hurd. That’s exactly what they did the last time, when Hurd replaced the hapless Carly Fiorina.
It will be much harder this time for HP to do the same.
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