Sexual harrassment scandal: where does HP go from here?

Hurd's abrupt departure as CEO amid a sexual harrassment scandal leaves HP with a variety of unfinished acquisitions

Departing HP CEO Mark Hurd managed to bring HP from the brink of collapse and restore respect for the HP brand in only five years. Forced to resign as a result of a sexual harassment scandal, Hurd takes with him his vision for the future of HP, leaving his successor to figure out how to put the pieces of the puzzle together and continue to build on the momentum Hurd has built.

The Mark Hurd era at HP speaks for itself. Former HP CEO Carly Fiorina--now running for the United States Senate--seemed to be much more of a personal glory hound. She was the first female CEO of a Fortune 20 company, and she oversaw the acquisition of Compaq, but her tenure was mired with struggle and controversy and saw a steep decline in the reputation of the HP brand.

In stark contrast, Mark Hurd did not make himself the news. What he did was bring a fresh management style and aggressive cost cutting to HP. Hurd created a leaner, but more effective HP--restoring HP as the leading manufacturer of both desktop and laptop computers.

He then set out to diversify the sources of revenue for HP--acquiring EDS, 3Com, and--most recently Palm. Under Hurd's guidance, HP went from being almost completely reliant on computer and printer hardware sales, to expanding the portfolio to include computer services, networking equipment, smartphones, and tablet PCs.

HP has established itself as the number two computer consulting and services provider behind IBM through the EDS acquisition, and it set itself up to compete against players like Cisco in the network hardware arena with the purchase of 3Com. But, HPs foray into tablet PCs and its acquisition of Palm have been the focus of most of the recent attention on HP.

While virtually every tech company has some sort of tablet strategy, HP is seen by many as the most likely challenger to Apple's dominant iPad tablet. The purchase of Palm, and its WebOS mobile operating system, give HP a formidable platform to build on. The combination of WebOS technology, with the right hardware, and with the HP brand and marketing power behind it could be a powerful tablet competitor.

The problem that HP has now, in the wake of Hurd's abrupt departure, is that some of these pieces--namely Palm--are not yet fully integrated, and the vision for how they fit into HP is not yet fully formed. The management style and corporate philosophy of Hurd's successor could make or break the momentum HP has right now.

HP has been a household name as a technology brand for decades, but that can quickly change. Another five years of aggressive business tactics and innovative leadership and HP could be virtually indestructible, but another five years of frivolous business decisions and untamed spending could put HP back on the verge of collapse.

HP has a lot going for it right now. The future seems bright as long as the HP board manages to attract the right kind of talent to take the reins.

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Tony Bradley

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