October 1, 2010 1:04 am

Change at the top for HP

The hiring of Leo Apotheker, a prominent salesman from the software industry, to run the world’s biggest computer maker sends a strong message about what lies in store for Hewlett-Packard.

With the tough job of knocking the company’s operations into shape now largely completed, its board wants to shift the focus back to expanding its sales and reinforcing its relations with customers.

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Mr Apotheker, a former chief executive of SAP, the German software company, represents a sharp contrast in experience and style to Mark Hurd, who was forced out as HP’s chief executive less than two months ago.

While Mr Hurd was a hard-nosed operations expert, Mr Apotheker built his career at SAP by expanding the company’s sales operations around the world.

That included running several of its country-level sales organisations, including the US, before going on to head its overall sales operations and, eventually, rising to the position of chief executive.

Paul Hamerman, an analyst at Forrester Research, said the selection of Mr Apotheker was “a rather odd choice”.

“He brings some strengths to the table: he built the SAP global sales organisation and is very well connected with very large companies,” he said. “On the other hand, the employee morale and customer relations did suffer under his tenure as CEO and that is a risk for HP.”

Mr Apotheker, a German national, relishes his reputation as a cosmopolitan, says one person who has worked with him. This contrasts with Mr Hurd, who spent most of his career in the US mid-West as head of computer-maker NCR.

Yet it was Mr Apotheker’s lot to take the helm at SAP in the middle of a deep recession, casting him in the role of cost-cutter and forcing him to find ways to boost revenues that antagonised some of SAP’s biggest customers and eventually proved his undoing.

As co-chief executive with Henning Kagermann, one of SAP’s founders, Mr Apotheker bore the brunt of the criticism in Germany for SAP’s decision in early 2009 to cut 3,000 jobs, the first cull in its history. He was also criticised for trying to offset slower software sales by ramping up maintenance fees for existing customers, a decision that caused a backlash from SAP’s biggest domestic customers.

The fall-out led SAP’s board to force Mr Apotheker out earlier this year, less than 12 months after he had become sole chief executive.

Mr Apotheker’s brief leadership was bedevilled by delays to one of the company’s most important initiatives of recent years. Known as Business by Design, the software was intended to launch the company deeper into the small business market and give it its first big foothold in the market for delivering software over the internet.

HP’s decision to look overseas for a chief executive marks a return to earlier practices in at least one other way: Mr Apotheker’s CV echoes that of Carly Fiorina, the former chief executive who once ran sales and marketing for telecom equipment maker Lucent.

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