The 10 Biggest HP Stories Of 2009

For the first few years of his stewardship, Hewlett-Packard CEO Mark Hurd was technology's Golden Boy, feted for his discipline and savvy in righting the HP ship following the Carly Fiorina era. But the deep economic recession of 2009 would prove to be his biggest challenge -- and it's not entirely clear yet whether he's passed it with flying colors. HP's industry-leading revenue fell by 3 percent in 2009 as compared to the previous year, while year-over-year earnings declined by 8 percent. Which isn't to say that the moves HP made in the past year won't pay off for the company and its channel partners in 2010. Here's a look at the 10 biggest stories generated by the biggest company in all of technology during the most challenging year of our lifetimes.

In an era of consolidation amidst economic uncertainty, technology's titans are increasingly jockeying for the same positions in the marketplace. And no two tech vendors traded more paint in 2009 than Hewlett-Packard and Cisco. With the networking giant encroaching on HP's data center turf with the first Cisco server products, HP responded by taking its own ProCurve marketing efforts out of neutral and jamming on the accelerator. This pedal-to-the-metal race goes all the way to the top -- HP channel partners say CEO Mark Hurd is the lead driver in what he's been quoted as calling a "war" with Cisco for all-out supremacy in the data center. Such overt hostilities aren't welcomed by some VARs who partner with both vendors, while others, like Redmond, Wash.-based Denali Advanced Integration's John Convery, say they're ready to be "foot soldiers" for HP in the conflict.

Want more evidence that HP wants a piece of every thread of fabric in the data center? The computing giant's proposed $2.7 billion acquisition of 3Com would nicely round out certain parts of HP's networking product portfolio to better compete with Cisco. And 3Com's solid penetration in the Asian market is some pretty nice icing on the would-be merger cake. Announced in November, the proposed deal would also add $1.3 billion or so to HP's revenue outlook. With market conditions still shaky, that could come in handy for HP in 2010 earnings reports -- if not quite as dramatically as the mid-2008 addition of EDS and its $20 billion in sales, which nearly made up for HP's double-digit revenue declines in everything but EDS-inflated services for most of 2009.

It's no surprise that HP CEO Mark Hurd (pictured) kicked off his 2009 quarterly earnings calls singing the praises of the HP Services business unit. For one thing, HP was under the gun to show that its integration of Electronic Data Systems, acquired in 2008, was proceeding apace. For another, HP Services was pretty much the only business unit that had good news to report for much of the year -- thanks to the EDS addition, sales were up (if only "inorganically"), even as other HP business units were suffering double-digit declines. Services is now the biggest earner for HP. In a world of razor-thin hardware margins, that's not a bad development for a company still known primarily as a manufacturer of PCs, servers and printers. The next big challenge for HP, say some industry watchers, is to transform HP Enterprise Services (the former EDS) into stronger competition for the business process consultancies of rivals IBM and Accenture.

All of the first-tier OEMs hit the ground running with new servers built around Intel's benchmark-busting Xeon 5500 series processors when those chips were introduced in late March. But no computer manufacturer debuted a new server portfolio as broad as Hewlett-Packard, which made the new Intel chips the linchpin of its next-generation ProLiant G6 lineup of tower, blade and rack server platforms. Later adding options for AMD six-core processors in its G6 line, HP made its latest, greatest servers the centerpiece in expanded portfolios of end-to-end data center infrastructure offerings like the company's Extreme Scale-Out Computing initiative. Now if only enterprises would start buying servers again...

In late April, HP snagged David Donatelli, formerly president of EMC's storage division, to lead its global Enterprise Storage and Servers (ESS) business. An exchange of lawsuits between Donatelli and his former company aside -- EMC insisted that Donatelli (pictured) couldn't touch HP's storage business per a non-compete clause in his EMC contract -- the move ended a one-sided poaching war during which EMC had itself hired away several executives from HP. Donatelli himself quickly proved to be a no-nonsense, take-no-prisoners type in the mold of both his new CEO Mark Hurd and his old one, EMC boss Joe Tucci. Reporting to Ann Livermore, Donatelli has staffed HP's ESS business unit with preferred lieutenants like ex-Sun Microsystems executive Randy Seidl. That unit's sales team has been increasingly aggressive under Donatelli's watch, many HP channel partners say, pressuring resellers to ply customers with an HP-only portfolio more than ever before.

If it's true that small businesses are the most reliable engine of any economic recovery, HP has certainly endeavored to be in a position to benefit in 2010. The computing giant doubled down on its SMB-targeted initiatives in 2009, rolling out everything from "zero percent" financing for SMB customers buying HP office products to designating key HP channel partners with a new SMB Elite tag. Heading up the SMB channel sales effort at HP is Meaghan Kelly (pictured), vice president of channel sales development and strategy, while HP's various business units have also contributed several product pieces to the vendor's growing SMB Total Care portfolio.

Adrian Jones had an extremely productive, if brief run as HP's Americas channel chief -- so productive, in fact, that in early October the company rewarded him with a promotion. Jones (pictured) is now running HP's Enterprise Storage, Servers and Networking (ESS) business in Asia-Pacific and Japan. HP's proposed acquisition of 3Com and its solid penetration in the Asian market presumably only adds to expectations for Jones. Meanwhile, the leadership of HP's Solution Provider Organization in the Americas is in flux. Stephen DeWitt, senior vice president and general manager of HP's Personal Systems Group, and Tom LaRocca, an SPO vice president of marketing, will lead the Solution Partners Organization on an interim basis as HP partners await the naming of a new channel chief.

Hewlett-Packard didn't climb to the top of the PC mountain by lagging on the rollout of new products. This year was no exception as HP refreshed old brands in 2009 and ramped up new ones, such as the vendor's first business-class netbooks and the first editions of the ultrathin-and-light notebook category it pioneered with Advanced Micro Devices. But if any one thing stands out for HP's PC business, it's the investment the company has made in its TouchSmart products for consumers, businesses and retailers. HP now has touchscreens for product categories ranging from all-in-one PCs to notebooks to digital signage. Equally important, the vendor has put as much effort into improving its multi-touch software, working with partners like Adobe and adding multi-touch support to the HP MediaSmart suite of applications.

Hewlett-Packard is no slouch when it comes to being green, keeping pace with and often even leading industry initiatives such as recycling old hardware and improving the energy efficiency of its products. But HP's environmental efforts apparently haven't been good enough for activists at Greenpeace, who scrawled "Hazardous Products" on the roof of the company's Palo Alto, Calif. headquarters in an early morning "action" in July. HP had allegedly "backtracked" on its schedule to eliminate materials containing polyvinyl chloride (PVC) plastic and brominated flame retardants (BFRs) in its products by the end of 2009, according to a Greenpeace spokesperson. For its part, HP lashed out at Greenpeace's "unconstructive antics" on its campus.

Microsoft's introduction of its Windows 7 operating system could help spur a resurgence in PC sales. Enterprises on the recovery track in 2010 might just kick off the mother of all refresh cycles as they replace aging servers and storage units in the data center. That leaves Hewlett-Packard's Imaging and Printing Group (IPG) as the one HP hardware unit that some believe has the least-clear path to a recovery from double-digit revenue declines in this brutal past year of recession. That's why Vyomesh Joshi, executive vice president of the IPG, laid out HP's sweeping new services-oriented strategy for recapturing lost ground in the printing market in September. According to Joshi (pictured), a new alliance with Canon fills out HP's product portfolio for enterprise engagements, where a new emphasis on managed print services by HP Enterprise Services and a new IPG unit called Managed Enterprise Solutions also comes into play. Meanwhile, new channel partner programs are expected to drive increased sales of products and services into the SMB segment.