After two months of waffling, hemming, and hawing, Hewlett-Packard (NYSE: HPQ ) has finally picked a CEO to replace Mark Hurd. In the process, HP is picking a fight with IBM (NYSE: IBM ) and Oracle (Nasdaq: ORCL ) .
The new leader of the free world's largest technology company as measured by revenue is Leo Apotheker, former CEO of German business software giant SAP (NYSE: SAP ) . It's a curious choice that took pretty much everybody by surprise, and Apotheker is apt to take the company in a whole new direction. Not necessarily a good one, mind you, but it will at least be different.
All Apotheker knows is enterprise-scaled software, which HP traditionally does very little of. He'll need to get up to speed on the server hardware, printer, and services businesses before doing anything of note. Then again, perhaps that's why he is scheduled to take his new job on Nov. 1 rather than right away – give the poor guy a chance to relocate, look around, and get acquainted with the new digs. But if and when Leo does start mixing it up, I strongly suspect that he'll want to move HP further into the software business; it's what he knows.
Whether that means a renewed commitment to internal innovation or taking the ongoing multibillion-dollar spending spree in a new direction remains to be seen. Whatever HP does tends to play against Big Blue, but a software strategy in particular would acknowledge Oracle as another head-to-head archrival.
Choosing Apotheker almost feels like a jilted partner lashing out after a departing ex. If you can't tame Hurd or get him back, why not go after his new employer with all guns blazing? The new CEO comes with a no-nonsense reputation that will keep Hurd's cost-cutting tradition going. But that's hardly the medicine HP needs right now; company coffers are bulging but morale is low. Passing over a plethora of highly qualified insiders and then not landing on a proven winner could be the final insult that drives another rash of top talent out of HP.
I still think HP should have boldly merged with EMC (NYSE: EMC ) , thereby staying comfortably in its hardware wheelhouse with rich access to great leaders and a firm hand in the red-hot virtualization game by way of its Vmware (NYSE: VMW ) semi-subsidiary. Maybe that'll happen when HP's board runs out of patience with Apotheker. I don't see great things happening here.
Does this choice make any sense at all, dear reader? If you feel that way, please explain how in the comments below because I am left scratching my head.