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HP Confirms Bigger-than-Expected Reorg

It said it expects the collective move to improve its performance and drive profitable growth

First thing Wednesday morning HP confirmed the big news that leaked the day before: it's moving its printers and PCs together under PC chief Todd Bradley, who will run a new $65 billion Printing and Personal Systems Group, and losing printer chief Vyomesh Joshi to retirement.

It's also pushing its global account sales organization and its $36 billion technology services unit into a new $58 billion-a-year Enterprise Group and giving the whole thing to David Donatelli, who's already running its $22 billion enterprise servers, storage and networking business.

It didn't say what it's going to do with Jan Zadak, who ran global sales thanks to former CEO Léo Apotheker. It says it's saving that for a later date. (Bet they are.) Meanwhile he's supposed to help make it an orderly transition.

It's bringing all marketing functions under CMO Marty Homlish and doing the same thing with communications under chief communications officer Henry Gomez.

HP said it expects the collective move to improve its performance and drive profitable growth. What it left unsaid was how many jobs are likely to go in the shuffle only that it's supposed to "provide opportunities for cost savings."

Of course it's debatable whether creating one giant $65 billion-a-year PC and printer unit, responsible for half of the company's revenue, will let HP drive innovation and improve the customer experience like it said since PCs and printers are different animals on different development cycles and aren't necessarily sold together.

The units have been put together and taken apart under former CEOs Carly Fiorina and Mark Hurd. Now it's Meg Whitman's turn to tinker in her quest to burnish the company's compromised financial outlook.

The printer unit is not the gold mine it once was and in HP's last quarter its earnings plunged a whopping 32% on sales down 7% to $6.3 billion. Pressed by mobiles PC sales were down 15% in the quarter and took a 34% earnings hit.

The combination is supposed rationalize HP's go-to-market strategy, branding, supply chain and customer support worldwide.

The wisdom of unifying cross-unit marketing in search of a unified voice is probably a matter of six of one half-dozen of another. Ditto communications.

HP said joining technology services to its enterprise servers, storage and networking group is supposed to "speed decision making, increase productivity and improve efficiency, while providing a simplified customer experience."

Lastly it said it was moving the global real estate function from finance into global technology and business processes to "address real estate consolidation and improve the workplace experience for HP employees."

In a canned statement Whitman said, "Ensuring we have the right organizational structure in place is a critical first step in driving improved execution, and increasing effectiveness and efficiency. The result will be a faster, more streamlined, performance-driven HP that is customer-focused and poised to capitalize on rapidly shifting industry trends." Guess we'll see.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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