Think of Hewlett-Packard as the technology world's version of the Hydra, the nine-headed, marsh-dwelling serpent of Greek mythology.
The company sells a dizzying array of products, including printers and personal computers, of course, but also photocopiers, plasma televisions, digital projectors, and a catalog of hardware and software products so thorough and arcane it would make the geeks running your average corporate computer center drool like Homer Simpson eyeing a doughnut.
For good measure, the company also sells its own operating system, HP-UX 11i, and what it calls a "printable tattoo," a decorative case to protect an Apple iPod music player from scuffs and scratches.
Unwieldiness
This week, Mark Hurd took his first bold step as Hewlett's new chief executive, attacking its unwieldiness like a cold-hearted Hercules, when he announced that he would lay off nearly 10 percent of the company's employees over the next year and a half.
At the same time, Hurd declared the company would no longer offer a pension and shifted the responsibilities of its global sales team.
But for the moment, at least, he is ignoring those on Wall Street and in academia's ivory towers calling on the company to sell parts of itself, if not chop itself into more manageable pieces -- something to give focus to a company only loosely tied together by a jumble of marketing messages.
Steven Milunovich of Merrill Lynch might best be described as the resident crank among financial analysts following Hewlett-Packard.
Milunovich has found himself the de facto leader among a small band on Wall Street who are convinced that more drastic measures are needed, and soon.
This week's moves buy Hurd maybe six months.
By year's end, Milunovich said, he will once again start clamoring for the company to break itself into two -- ? his preferred solution -- unless Hurd unveils the kind of sweeping overhaul in strategy conspicuously absent from his pronouncements four months into the job.
"I have no doubt that HP will do a better job of executing under Mark," Milunovich said of Hurd.
"But it's our view that turning things around isn't just a matter of execution. We think the strategy is a problem as well," Milunovich added.
That view was echoed by any number of observers, including M. Eric Johnson, a management professor at Dartmouth's Tuck School of Business.
Johnson, who worked at Hewlett-Packard for several years starting in the late 1980s, is currently a part-time consultant to the company.
Preliminary step
"This is a good preliminary step," he said of this week's announcement. "But I don't see how anything we've heard so far is going to cause people to write a year from now, `Mr. Hurd has transformed HP.'"
Indeed, the entire layoff process will not be complete until November 2006.
The company estimates it will save US$1.6 billion annually on labor costs with an additional US$300 million in annual savings from reduced pension costs.
Inside Hewlett-Packard, executives talk a lot about synergies. The digital photos someone snaps with one of the company's cameras can be published on a Hewlett printer, uploaded to one of its personal computers or displayed on one of its plasma television screens.
The company also sells the top-end computers and data storage equipment corporations need to run their operations, as well as select software products and the services of consultants who can make the component parts work in harmony.
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