News
 

Bookmark and Share

(0) 

The recent quarters were not exactly impressive for Hewlett-Packard, the world's top PC maker, as its sales forecasts were reduced, something that caused analysts question whether the new chief executive can run the company successfully. But HP's chairman of the board claims that at present the company is paying for mistakes made by the previous CEO, who reduced spending and stifled innovation.

"It is not a three-month job [to transform HP and enable long-term growth]. Mark Hurd did not invest, he burned the furniture to please Wall Street. Leo is not that," said Ray Lane, the chairman of HP's board of directors, in an interview with Reuters news-agency.

This is by far not the first time when Mark Hurd, who was ousted from the position of HP's CEO with a scandal last year, is criticized for cutting costs and reducing HP's ability to innovate. Samuel Palmisano, chief executive of IBM, last year said that HP was forced to make large acquisitions because of inability to innovate itself due to reduced research and development (R&D) funding.

"HP used to be a very inventive company. IBM would never have paid what HP did to buy data-storage provider 3Par. HP had no choice: Hurd cut out all the research and development," said Mr. Palmisano.

Mark Hurd cut HP's R&D budget to $2.8 billion, or 2.5% of HP's revenue, in its last fiscal year from $3.5 billion, or 4% of earnings, in 2005, when he took over as CEO. Under Mr. Palmisano, IBM has continued to invest about 6% of its revenue in R&D, including $5.8 billion last year. Leo Apotheker increased R&D funds to $815 million (2.57% of revenue) for the quarter ended April 30, 2011, which was up from $722 million (2.34% of revenue) for the same period in 2010.

Since Leo  Apotheker became chief exec eight months ago, the stock is down 11%, compared with a 13% rise in the Nasdaq composite, due to the fact that investors and analysts were not sure whether Mr. Apother can spark growth of the company by embracing cloud computing and mobile eco-system strategies.

Tags: HP, Business, webOS, Hewlett-Packard

Discussion

Comments currently: 0

Add your Comment




Related news

Latest News

Thursday, August 28, 2014

12:22 pm | AMD Has No Plans to Reconsider Recommended Prices of Radeon R9 Graphics Cards. AMD Will Not Lower Recommended Prices of Radeon R9 Graphics Solutions

Wednesday, August 27, 2014

9:09 pm | Samsung Begins to Produce 2.13GHz 64GB DDR4 Memory Modules. Samsung Uses TSV DRAMs for 64GB DDR4 RDIMMs

Tuesday, August 26, 2014

6:41 pm | AMD Quietly Reveals Third Iteration of GCN Architecture with Tonga GPU. AMD Unleashes Radeon R9 285 Graphics Cards, Tonga GPU, GCN 1.2 Architecture

Monday, August 25, 2014

6:05 pm | Chinese Inspur to Sell Mission-Critical Servers with AMD Software, Power 8 Processors. IBM to Enter Chinese Big Data Market with the Help from Inspur

Sunday, August 24, 2014

6:12 pm | Former X-Bit Labs Editor Aims to Wed Tabletop Games with Mobile Platforms. Game Master Wants to Become a New World of Warcraft