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By Jack Ganssle

See Ya, Carly

Published 2/10/2005

Hewlett-Packard is suffering through yet more change and disruption. Carly Fiorina, CEO for the last 6 years, was shown the door this week.

Her HP reign began in July 1999, the same month the company spun off the test equipment division into Agilent.

It's hard for me to walk by the Agilent booth at the Embedded Systems Conference and not think of them as HP. Today Agilent carries on HP's tradition of producing great test equipment. But I wonder what Bill Hewlett and Dave Packard would think of the name change.

The duo started HP in 1939, in an old garage that's now designated a California State historical landmark. They built an innovative audio oscillator that sold for a quarter of what the competition charged. Walt Disney bought some of these units for use in producing the still incredible movie Fantasia.

Test equipment was a core business for decades. But that business couldn't measure up to the siren song of personal computers. Today Agilent does a respectable $7.2 billion in sales, but that's less than 10% of HP's $80b empire, one grounded in PCs, servers, printers and services. Under Ms. Fiorina the company spun off its roots and became a computer company.

She drove the company to acquire Compaq in 2002, a merger that most feel never netted much for either business.

Today PCs and printers dominate HP's revenues, though the PC business barely returns 1% profit on operations compared to 16% for printers. Rumors abound they may sell the latter division, which sure sounds like lopping off one's arm to save the tumor.

Not being an analyst I don't know if Ms. Fiorina was ultimately a boon for the company or not. She did nearly double HP's revenue in her 6 years there. But the stock price still stutters around $20/share, just about the same level when she started. In capitalism the worth of the company is the stock price times the number of shares. Revenue is nice, profits even better. but stockholders buy when they think the company's valuation will increase. By that measure she stumbled badly.

HP used to be considered one of the best places to work in the world. Hewlett and Packard were known as gentle giants, astonishingly rich and successful men who were often seen strolling around their facilities, getting to know the workers. The phrase "management by walking around" originated with them, which translated into close interaction between management and the employees.

I'm writing this on my HP Pavillion PC, which is networked to my HP (OK - Agilent darn it!) scope. I sure hope the company post-Fiorina rebounds, and that the old "HP-way" and esprit des corps returns.

HP has been a truly great company, and can remain so into the future.

What's your take on HP as a company and Ms. Fiorina's ouster?