With the firing of Carly Fiorina, I’m wondering how things might have gone differently for Hewlett-Packard. For example, how has Agilent done since it was spun off? (I’m not even sure if Carly Fiorina was responsible for that decision. Anyone know?) Would HP’s stock price and financial performance otherwise be stronger if the company were still intact?
It seems to me that the businesses in Agilent represent the heart of the traditional HP. Hewlett-Packard still has the printing business, which is huge, profitable and serves to distinguish the company from its competitors. But the computer business is turning into a commodity, so buying Compaq for $19 billion seems a mistake. So were they wise to divest themselves of Agilent?
HP didn’t buy Compaq for home PCs. They wanted the Tandem servers. (aka Non-Stop or Himalaya servers - highly redundant server systems that drive the stuff that can’t ever break down like air traffic control, the stock exchange and bank ATM networks.) In a case of what goes around, comes around, this was a re-acquisition of sorts. Tandem was founded by HP personnel in the early 1970s, bought by Compaq in 1997, and then re-absorbed by HP.
Agilent suffered in the crash of the test equipment market, like everyone else. It would have happened if they had still been part of HP.
gotpasswords, do you have a cite for the contention that they bought Compaq for Tandem? That market segment is mjniscule compared to PCs. They sure didn’t buy it for Alpha. The Fortune article that came out just before the canning mentioned promises for revenue and earnings in several segments of their business, and I don’t remember high reliability servers being mentioned. All the press is on cheap x86 based relatively low reliability servers, so if she did buy Compaq for Tandem she screwed up even worse than I had imagined.
I don’t have a published cite - my info comes from rank-and-file people at HP/Compaq. More than one person has told me that Carly only wanted the Tandems and was more than willing to gut Compaq like a fish for them.
When you’re selling computers that go for a $1 million or more a pop, you can handle a “miniscule” market.
If you asked 100 people at HP, particularly at the rank and file level, you’d get 100 different theories as to why Carly wanted Compaq, particularly if they worked in different divisions.
It seems like the post-merger spin was to point the rank-and-file at the complementary products that Compaq brought to the table to strengthen your division. If you worked in storage, you got tales of how the EVA and HSG80 was going to revolutionize the storage world and put the final stake into EMC. (Reality: EMC hired away everybody from HP who knew anything about running a storage division, then implemented HP’s game plan better than HP did.)
If you worked on HP-UX, you got spun tales of how well the DEC team could integrate the VMS clustering software (Reality: never happened). Services? Compaq was better at selling those. Servers? Compaq had top-line ones that HP didn’t offer yet. PC buisiness? “Economy of scale”.
In any event, I think the main reason was that Carly wanted to be CEO of an $80 billion company. She got the BOD to buy off on it, then bribed the investment bankers to win the closest shareholder vote in company history.
The Fortune article that came out just before the canning mentioned promises for revenue and earnings in several segments of their business, and I don’t remember high reliability servers being mentioned. All the press is on cheap x86 based relatively low reliability servers, so if she did buy Compaq for Tandem she screwed up even worse than I had imagined.