New HP CEO Decides PCs, Printers Aren't Better Together

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Hewlett-Packard's new CEO Tuesday made his first big organizational move by returning Personal Systems and Imaging and Printing to standalone groups, reversing a decision by his predecessor to merge the two units earlier this year.

HP CEO Mark Hurd said in a prepared statement, "By managing PSG and IPG as separate, highly focused organizations, we can further sharpen our competitiveness and improve our cost structure." The restructuring could pave the way for Hurd to eventually spin off either HP's printer business or personal computer business in order to drive additional shareholder value.

Former Chairman and CEO Carly Fiorina had combined the two units into the Imaging and Personal Systems Group just last January.

Vyomesh (VJ) Yoshi, who had served as the executive vice president of the combined group will now revert to his former role as executive vice president of the Imaging and Printing Group (IPG).

Todd Bradley, formerly the president and CEO of palmOne, has joined HP as executive vice president of the Personal Systems Group (PSG). Prior to his four-year stint at palmOne, Bradley spent three years at Gateway, with his last position being executive vice president of global operations. PSG includes notebooks, desktop PCs, handhelds, monitors and workstations.

Pete Busam, the executive vice president and COO of Decisive Business Systems, a Pennsauken, New Jersey solution provider, characterized the splitting off of the personal systems business as a classic operations move to get a handle on the costs for both personal systems and HP's cash cow printing and imaging group and then drive best in class performance from both organizations.

"This allows VJ (Vyomesh Joshi, HP's longtime top printer executive) to go back and focus on HP's core business," said Busam. "This is an operations guy (HP CEO Mark Hurd) protecting his bread and butter business which has always been imaging and printing."

"HP wants to track the printing and imaging business very closely against who they are competing against like the Lexmarks and Ricohs of the world," added Busam."If you add personal systems into that you are diluting what you are reporting and how you are measuring yourself."

As for new Personal Systems Group Chief R. Todd Bradley, Busam said Hurd probably tapped him for his operations expertise.

Rick Chernick, CEO of Camera Corner Connecting Point, solution provider in Green Bay, Wisc., said the move will likely have little impact on his business. "It won't make any difference to me at all unless it changes the factor on how they pay me," said Chernick.

Busam said it is still unclear as to what kind of impact Hurd will ultimately have on channel policy. That said, he noted that HP layoffs particularly in the services business could heighten HP's dependency on solution providers for services muscle. "HP is not going to have all of the services resources they had in the past," he said. "I see more of that being pushed to VARs."

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