A brave new world
Hiring Apotheker and Lane clearly signals that the company needs to grow more actively in the software and consulting business. While neither hire is very experienced in HP's core hardware and PC business, that's not why they were brought in.
Lane is the former COO of newly minted HP archrival Oracle
An analyst at Global Equities Research explained Lane's arrival as "a historical shift for HP," one which will bring a much needed entrepreneurial spirit to a stodgy firm. For those opposed to the Apotheker hiring, Lane could also serve as a backup or "next man up" if business doesn't go as planned. He certainly brings experience to the table, and his work as chairman will allow him to get up to speed with HP's business.
While HP needs a shift in its business strategies, the company's new direction will lead it to a much more competitive environment, filled with more able and innovative rivals. It was easier competing in the PC world, with the likes of unimaginative companies like Dell
Sure, the world of software has a few Dells of its own. But it's also full of dynamic companies that have a huge lead on HP when it comes to innovation. Competitors IBM
Not too soft
HP's software unit contributes only 3% to the company's total revenue, but it can crucially bundle with HP's hardware and consulting offerings to provide customers end-to-end solutions and cost savings. As Apotheker said himself, software needs to be the "glue" that holds the company together. Today, enterprise clients are looking for one-stop shops, where a single company can cover their software, servers, hardware, and consulting needs. As previously mentioned, rivals like IBM, Oracle, and Cisco
Leo Apotheker may not have been the rock-star hire that analysts and tech gurus wanted. But along with Ray Lane, his arrival represents a step in the right direction. With the company's balance sheet ripe for future acquisitions, it's time for these two to get to work.
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Fool contributor Andrew Bond owns no shares in the companies listed. The Fool has written a bull call spread on Cisco Systems. The Fool owns shares of IBM and Oracle. Try any of our Foolish newsletter services free for 30 days. The Fool has a disclosure policy.