Article

Customers express relief at departure of HP's CEO

Margie Semilof

Some of Hewlett-Packard Co.'s customers are not at all sorry to see changes at the top of the company that makes many of the servers that they use to run their Windows systems.

Customers have expressed their frustration with the Palo-Alto, Calif.-based HP's problems since its merger with Compaq

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We've been using Compaq products for years, and since HP got into the mix, we've seen a serious decline in quality of the hardware.


Paul Edwards, administrator,

PHH Corp.

,
Computer Corp. in 2001, with regard to its product quality and its ability to deliver orders in timely fashion. The company's decision to replace its high profile chairman and CEO Carleton "Carly" Fiorina on Wednesday could be construed as a sign of hope that perhaps the business will begin to turn around.

"Personally, I see this as a good thing," said Paul Edwards, a Windows administrator at PHH Corp., a Mt. Laurel, N.J., transportation fleet management company. "We've been using Compaq products for years, and since HP got into the mix, we've seen a serious decline in quality of the hardware."

"I would rather have seen [ex-Compaq CEO and current MCI Inc. CEO Michael Capellas] maintain the reins of HP, since maintaining quality was what he was about," Edwards said. "HP's current approach seems to be about cost cutting."

Delays in delivering hardware

Other customers cited problems in seeing their orders fulfilled and the general backlog in getting the servers on which they are running their Windows systems, because of problems with hard disk suppliers and memory.

During the past year, the company has been plagued by problems with order management, supply chain

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management and channel management issues in Europe.

Kent Smith, a Boston consultant and chairman of the Boston Area Windows Server User Group, said he has waited for Proliant DL585 servers for at least three weeks, and now HP is estimating he will have to wait at least another three to six weeks.

"But what can you do?" Smith said, citing the fact that even though he can get a white box package -- a non-branded computer -- there are a limited number of vendors that sell something with "good engineering."

Longtime industry watcher and consultant Richard Ptak, principal at Ptak, Noel & Associates, Amherst, N.H., said he expects the general reaction to HP's decision to be one of relief. "There has clearly been tension within HP about what was going on within the company," Ptak said. "And there is a growing dissatisfaction with the company overall."

Shaking up the HP way

Fiorina, who was formerly a sales executive for AT&T and Lucent Technologies and only 44 years old when she joined HP in 1999, was brought in to shake things up at HP. She navigated the merger with Compaq, but then set about for a task for which many said they believe she had no ability, which was to build something new.

"She shook up the culture, introduced changes and then tried to build a new company and take it in a new direction, which caused controversy and turmoil," Ptak said.

HP's board of directors appointed chief financial officer Robert Wayman to the position of interim CEO. Patricia Dunn, an HP director, was named non-executive chairman of the board. Both changes were effective immediately.

In a conference call on Wednesday, Dunn said Fiorina's departure was not a change related to strategy, but a desire to accelerate HPs existing strategy. The search for a new CEO will begin immediately.


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