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CEO Hurd Keeps the Pressure On to Improve HP

By Robert Mullins

June 19, 2007 — IDG News Service (San Francisco Bureau) — Hewlett-Packard may be on track to be a US$100 billion company this year, but CEO Mark Hurd said there's a total $1.1 trillion IT market for it to pursue.

Hurd, in a keynote address Monday at the HP Technology Forum in Las Vegas, told an audience of HP customers, partners and employees that the company needs to continue to reduce costs so it can invest in innovation more.

In an emotional moment in his 30-minute address, he expressed confidence that his 167,000 employees are up to the challenge.

Mark Hurd

"I know of no CEO who is prouder of their company as I am about HP," Hurd said, in an arena inside the Mandalay Bay Resort and Casino convention center.

HP's capital spending has remained relatively flat in recent years while its budget for IT maintenance and continuing operations has continued to rise. Hurd pledged that HP would increase its capital spending by a factor of four over what it is today, with a goal of getting HP to a point where maintenance and operations are just 30 percent of the IT budget and innovation on new technology is 70 percent.

HP is in the midst of a capital project to reduce the number of data centers it operates, from 85 worldwide to just six, to improve the efficiency of its own operations.

Hurd, who is also chairman and president of the technology company, said it has a goal of reducing the amount of energy used for power and cooling by 50 percent, which he said would save enough energy to power the city of Palo Alto, Calif., HP's headquarters city, for a year.

"Green is not just about being environmentally friendly, it's [about] a great outcome. It's also about the efficiency we gain and the money we save at the same time," Hurd said.

While remaining focused on costs, HP is also hiring. Hurd said the company hired approximately 1,000 new salespeople over the past 12 months, two-thirds of them in the technology solutions group, which sells to businesses and large enterprises.

Hurd said that all the innovation HP designs into its personal computers, servers and other products won't make a difference if the products are not well distributed. He said the company needs to hire more and better salespeople and handle more accounts to better serve their customers.

The Technology Forum is cohosted by HP user groups, including Encompass. The forums help HP customers, particularly small to midsize businesses, get the company to listen to them, said Nina Buik, president of Encompass.

 

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