Hewlett: Preliminary Results Won't Be Known For A Few Weeks

Hewlett-Packard

Shortly after all proxy cards received by the dissident HP board member were turned over to the independent inspectors of elections, Hewlett issued a statement which said in part, "It is expected that the preliminary tabulation will be provided to Mr. Hewlett and Hewlett-Packard in a few weeks after which both sides will have the opportunity to examine the proxy tabulation."

The indecision injects even more doubt into a rancorous and bitter proxy fight that has waged for six months between dissident board member Walter Hewlett and HP management. With customers and solution providers weary of the long fight, the lack of a definitive outcome is probably the worst outcome in an already edgy market.

At stake, too, is the future of HP Chairman and CEO Carly Fiorina. Hewlett has called for her ouster should shareholders reject the merger.

Hewlett, son of HP co-founder William Hewlett, mounted a determined and often rancorous fight to block the merger, saying the deal would expose the company to low-margin PC business and dilute the value of HP's crown jewel: its imaging and printing business. Instead, he advocated a focus and execute strategy in which HP would build its services and enterprise businesses through internal growth and targeted, smaller acquisitions.

Should the Hewlett camp prevail, HP will be faced with a management upheaval and a 180-degree shift in strategy that could end up being as disruptive as the bitter six-month proxy fight.

Under Fiorina, the company greatly simplified both its businesses and its channel organizations by creating a single channel czar to manage all of HP's channel strategy. Previously, each business unit had its own autonomous channel organization, which was sometimes out of synch with each other. This resulted in confusion and channel conflicts both inside and outside of HP.

If HP management wins its merger fight, the company also faces more battles. Although Compaq and HP have had 900 employees working full-time on integration planning, merging cultures and organizational structures, keeping customers in the fold remains a formidable task.

Both Fiorina and Hewlett agree that most mergers fail over integration strategy and execution. Even if HP wins, the company will still have to deliver on its promises to make the merger work.