I don’t think Leo Apotheker is going to survive long as CEO of Hewlett Packard. This is not based on any inside information, just my own pondering. And when Apotheker does go down, I’m pretty sure I know who will take his place.
The players in this drama are Apotheker, various HP executives, and the HP board, with the important bit of information being that the board has changed substantially in composition since Apotheker was appointed last year. It’s a new board.
Leo Apotheker was a dark horse candidate to run HP. He’s German, comes from an enterprise software background at SAP, the big German software company, and has no history in hardware. All previous HP CEOs have been American, most came up through the company, and all but Carly Fiorina had clear backgrounds making and selling the kind of hardware HP is known for. Fiorina, of course, came from Lucent Technologies and sold into the telco market where HP is not a player. Still she had a background selling big iron.
That the HP board chose Apotheker wasn’t such a surprise given the mood of that board, which was trying to fight against its own bad reputation for infighting and poor conduct (hiring private detectives and unethically gaining access to board member private phone records), bad hires (Fiorina), and worse hires (Mark Hurd). That board felt they needed a new CEO who was clearly different from both Fiorina and Hurd and came from a C-level job at a leading technology company.
Apotheker certainly qualified on those terms with the only downsides being his lack of hardware experience and that he’d been fired from SAP after only seven months. But heck, he was available.
And the guy might have succeeded but for two events beyond his control — the Oracle lawsuit against SAP, in which Oracle tried to call Apotheker as a witness, and former eBay CEO Meg Whitman’s loss in her run for governor of California.
SAP didn’t want Apotheker to testify in the lawsuit over SAP’s admitted theft of copyrighted Oracle materials and HP didn’t want their new CEO dragged into it either. So at just the moment when new CEO Leo should have been knocking back brewskies at HP Friday beer busts, proving to the company that he was a real engineer, Apotheker was instead on the lam to avoid being served with a subpoena, orbiting in an HP jet anywhere but Silicon Valley. This hurt Apotheker and HP and didn’t help SAP all that much, either, since that company ended-up having to pay more than $1 billion in damages to Oracle.
On the chickenshit-horseshit-bullshit spectrum, Apotheker hiding from the court was definitely chickenshit behavior that probably reflected the old HP board and hopefully not the new one.
That lawsuit is history, but the damage to HP and Apotheker lingers. Now add to that HP’s weak earnings and its warning just this week of soft earnings to come and Apotheker’s position is further compromised.
Then someone remembered the SAP employee survey just prior to Apotheker’s firing there where he was shown to be distant and unpopular. And while he’s not yet viewed broadly at HP as distant and unpopular, neither is he close and popular. He’s still an enigma to most employees. And Apotheker will get no help from the HP executives who were passed-over to hire him.
Then there’s Meg Whitman, who expected at this point to have resigned from the HP board to spend all her time running California as governor. But that didn’t happen, so now what is she to do? You can only get so many pedicures. She’ll eventually get around to hip-checking Apotheker and taking his job. Meg can knock back brewskies as well as any man and will probably fill those CEO shoes even better than Apotheker.
I know I am speaking early about this but that’s why I get the big bucks.
There is only one chance Apotheker has to save his job and that’s by buying his old company, SAP. A merger would transform HP, instantly making it a power in enterprise software, much more competitive with both Oracle and IBM, and strongly emphasize Apotheker’s strengths. Enterprise software right now is less than five percent of HP’s total business and that has to change if Apotheker is to survive.
So Apotheker could make a bold move, transform the company in his own image, and save both his job and the day. But I don’t think it will happen because SAP is on a roll and getting more expensive by the day. At more than $60 billion, it’s probably too expensive now for HP to buy.
It might have worked had Apotheker bought SAP on his first day of work at HP but he didn’t know then what trouble he was in. Now it is probably too late. And while his end, I think, is inevitable, it should also be very entertaining because Meg Whitman will take out Leo Apotheker with some real boardroom flash and style.
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