Several recent stories about the tribulations at HP assume that the HP of today is somehow similar to the HP of 1990, or 1950, for that matter. Well, it's not.
I blame Carly Fiorina for creating the "beginning of the end" situation at HP, which started under the former CEO's leadership during the disputed purchase of Compaq computers in 2002.
At the time, HP was a thriving minicomputer company, making inroads into desktops, and one of the three kings of the inkjet business. It probably was the company that discovered it was ozone, not UV, that was fading inkjet prints and the porous fast drying paper was the real culprit. You recall those green prints, yes?
So anytime a company absorbs a behemoth like Compaq, it gets into trouble and loses its way for a decade or more. Companies can buy and own other companies as divisions, but this was an attempt to absorb Compaq.
Compaq was no slouch for this sort of stupidity. It had made the mistake of buying DEC (Digital Equipment Corporation), the hottest minicomputer company in the world. DEC was positioned to dominate the web server business. With DEC came Alta Vista, the progenitor of Google. There was also the Alpha chip, arguably the most powerful microprocessor developed by anyone. On top of that, Compaq also tried to absorb Tandem Computers, a hugely successful operation that was about to own the entire banking ATM backbone.
So while Compaq was essentially choking on its food, trying to reorganise these massive operations, HP decided to buy Compaq so it could choke on regurgitated food. It was a crazy move.
But despite objections, Fiorina thought this was a great way to grow and perhaps she'd personally make more money. Whatever the case, HP has been choking on this deal ever since. It is able to catch its breath every so often, but at the end of the day, this Compaq deal has the company gagging. Oh, and did I mention that HP also decided to buy Palm, the creative little phone maker?
In the process, the Alta Vista search engine, which could have been Google, was neglected and languished. DEC is dead. Compaq is dead. Tandem is dead. The Alpha chip decayed. Palm is a zombie and I could go on and on with other notations of endless misery for a while. I don't even know the half of it.
This all culminated in boardroom antics worthy of a novel, which led to the eventual use of a private eye to snoop on journalists who kept exposing boardroom stupidity.
Now we have one-time gubernatorial candidate and former eBay CEO Meg Whitman running the show. Is she a notorious turnaround artist? Not to my knowledge. So what's the point? I'm curious why the HP board felt obliged to hire an outsider to run such a complex company.
This has been going on a lot in Silicon Valley and it is very baffling. It also happened at Yahoo. Here is a huge company with a lot of smart executives who peculiarly decided to hire someone from outside the company, Marissa Mayer, who has no idea what is going on. Why can't the company find someone in the ranks? It takes too long for an outsider to dismantle the mini-empires and find the skeletons in the closet.
In summary, HP isn't turning back into a world power anytime soon. But hey, its computers are a pretty good deal. So it's not all bad.
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