The 10 Biggest HP Stories Of 20104:00 PM EST Wed. Dec. 08, 2010
HP's 2010 had all the elements of a Hollywood thriller: conflict between longtime friends, bold and risky bets, a bidding war, a bitter divorce, a CEO resignation, a CEO appointment and even a sexual harassment claim filed by a former TV reality star.
Here's a look back at the ten biggest HP stories of 2010, including Mark Hurd's resignation, Leo Apotheker becoming the new HP CEO and the end of HP's channel partnership with Cisco.
You'd be hard pressed to find a more seismic event in the IT industry this year than Mark Hurd's resignation from HP in August, which came after actress Jodie Fisher, who sometimes worked for HP at high-level customer and executive summit events, filed a sexual harassment complaint against him for reasons that still aren't quite clear.
Although an internal HP probe didn't find any violations of the company's sexual harassment policy, Hurd was found to have violated HP's standards of business conduct as they pertain to expense reports, and that was apparently enough to prompt him to resign from the company he'd led since 2005.
Of course, Hurd's resignation from HP was just the beginning of a saga that has shaken the longtime partnership between HP and Oracle to its core and had included its fair share of cloak-and-dagger activity.
Larry Ellison was one of the first to speak out against HP's Board for allowing Mark Hurd to get away, but he was chuckling when Hurd subsequently joined Oracle as co-president. HP didn't like this and lashed out with a lawsuit against Hurd that cited the potential for 'irreparable damage' to HP's trade secrets. Things eventually became so heated that Ellison threatened to sever the companies' 20-year old partnership.
Things got worse when HP hired Leo Apotheker, former SAP CEO, to replace Hurd. Ellison threatened to haul Apotheker into court to testify in Oracle's trade secrets lawsuit against SAP, which recently ended in a $1.3 billion judgment in Oracle's favor. Apotheker never testified because no one knew where he was, although reports said Oracle hired investigators to find him.
The friction is casting clouds (no pun intended) over the HP-Oracle relationship. One suspects the financial advantages of the partnership will cause cooler heads to prevail, but there is no guarantee given what has happened so far.
$2.35 billion for a storage virtualization startup? That's what HP paid for 3Par, a Fremont, Calif.-based developer of enterprise-class storage arrays that use clustering, tiered storage, and thin provisioning to allow applications to be configured with more storage capacity than is physically available. It's a sizable gamble for an unproven company, but HP is betting that 3Par will end up being an invaluable part of next generation IT infrastructure.
Dell and HP engaged in a fierce bidding war for 3Par that ended up more than doubling Dell's initial bid of $1.16 billion, which was itself somewhat surprising given that 3Par had $168 million in sales in its most recent fiscal year. Many industry pundits believe HP overpaid for 3Par, but this was clearly a situation in which keeping a strategic startup from a rival was worth ponying up the extra cash.
HP in late April pulled the trigger on a $1.2 billion acquisition of Palm, signaling its intention to step outside the shadow of Microsoft and become a major player in the smartphone and tablet markets. Palm gave HP a large developer base, more than 2,000 apps, a platform to deliver cloud-based services and the opportunity to drive more branded business. Palm also brought HP a strong IP and patent base to be wielded in the inevitable mobile patent wars of the future.
HP plans to roll out a webOS tablet next year to go along with the Windows 7 powered Slate 500 launched last month. In July, HP also trademarked the name "PalmPad". Next year will be an important year for HP's mobile business as HP seeks to show it's capable of getting a struggling company like Palm turned back in the right direction.
HP and Cisco's squabbling, which began building last year, reached a denouement in February when Cisco severed its channel partnership with HP, effectively ending the companies' two-decade old partnership.
Since then, we've seen HP launch an all-out offensive to recruit long-time Cisco Systems partners to carry the full HP networking product portfolio. We've see the companies stage dueling, simultaneous partner conferences full of strategy sessions on how to steal each other's business. And we've seen channel partners on both sides growing more than a little uneasy about what all of this means for their ability to recommend best-of-breed solutions for customers.
They say when elephants fight, it's the ants that get trampled, and as 2010 draws to a close, there are still a lot of nervous ants in the HP and Cisco partner channels.
The Mark Hurd scandal wasn't the only embarrassment HP had to deal with this year. In April, Russian authorities raided HP's Moscow offices as part of an investigation into whether HP paid about $11 million in bribes to win a lucrative Russian government contract in 2003. In September, the Securities and Exchange Commission (SEC) and US Department of Justice (DOJ) launched their own investigation into the allegations.
In August, HP reached a settlement with the DOJ in a long running investigation into alleged kickbacks paid out by HP to win lucrative government contracts. HP channel partners found all of this quite ironic given that HP last year forced all of its partners to complete a $120 anti-bribery training program or risk losing their partner status.
HP and Microsoft kicked off 2010 by unveiling a $250 million investment aimed at pushing cloud computing into the technology mainstream. The partnership, which the companies jointly described as a "technology stack integration", was seen a chess move on HP's part designed to raise hackles over at Cisco. But since then, it has emerged as the bedrock for both companies' emerging private cloud message.
HP now offers Cloud Foundation for Hyper-V, a reference architecture that combines HP BladeSystem Matrix hardware with Microsoft's System Center management software. And HP's HP CloudStart for Hyper-V weaves together services, hardware and software from both companies to help customers jump on the private cloud bandwagon. Expect the HP-Microsoft partnership to continue cutting through the noise in the coming year with actual, deployable products.
Stephen DiFranco, a 23-year channel veteran whose resume includes stints at AMD and Lenovo, took over the role of vice president and general manager of Hewlett-Packard's Americas Solution Partners Organization (SPO) in April, replacing the reassigned Adrian Jones. DiFranco's role includes stewardship of the PartnerONE program, and he's spent much of the year getting up to speed with one of the massive channels organizations in IT today.
At HP's Americas Partner Conference in April, DiFranco presided over the launch of an all-out SMB channel offensive aimed at building HP's partner ranks in this segment.
Later on in the wake of the Mark Hurd scandal, DiFranco emphatically reassured HP partners that its channel focus and plans wouldn't change under new leadership, and that went a long way toward quelling the uneasiness that has been simmering within the partner ranks.
In June, HP unveiled plans to invest $1 billion in "fully automated, standardized, state-of-the-art commercial data centers" built on HP's converged infrastructure and operated by its management software.
HP is looking to consolidate its Enterprise Services' commercial data centers, management platforms, networks, tools and applications and build data centers that essentially operate themselves. The company said at the time that this data center consolidation would result in 9,000 jobs being eliminated over the next several years, although HP did note that roughly 6,000 new jobs would be created in sales and delivery.
New HP CEO Leo Apotheker joined HP on Nov. 1 under a cloud of controversy stemming from Oracle's lawsuit against SAP, and made one of his first appearances at HP's Q4 earnings call on Nov. 21. During that call, Apotheker signaled his intention to boost HP's software business. "We need more software both as a category and also across the portfolio so that we can differentiate our individual products and services," he said in the call.
Although Apotheker hasn't had time to meet with many partners, he did take time to film a video in which he reassures partners that he's not planning to alter HP's channel focus. "We remain fully engaged in our channel objectives and fully engaged with you as a core component of our long term business strategy," Apotheker said in the video.
Check out the other biggest IT vendor stories of 2010.