HP Pledges to Better Connect With Customers (UPDATED)

Since this story was originally posted, it has been updated to correct the name of the International Tandem Users Group (ITUG).

Hewlett-Packard President and Chief Executive Officer Mark Hurd, speaking at a user conference Monday in Houston, told customers the company’s goal is to listen to them more and respond to their needs more quickly.

In a keynote address at the HP Technology Forum, which made only passing reference to the scandal that has rocked the company for the past two weeks, Hurd said “HP has made a lot of progress, but we’ve got a lot more to do.”

HP is on track to record about US$91 billion in revenue and an operating profit of $8 billion to $9 billion in fiscal 2006, he said. That leaves $83 billion in costs that the Palo Alto, Calif.-based company still needs to scrutinize for efficiencies.

HP announced in July 2005 a restructuring that would result in the elimination of 15,300 jobs to save $1.9 billion in operating costs by the end of its fiscal year Oct. 31. Hurd told the Houston audience that while cutting some jobs, the company is creating others and reinvesting in other areas to develop new opportunities for growth.

“We want to spend money to realign our IT and make those investments so in the long term we save money,” he said.

Randy Mott, HP’s executive vice president and chief information officer, explained the progress of HP’s consolidation of 85 of its own data centers into six centers—two each in Austin and Houston, Texas, and Atlanta, Ga. HP projects that consolidation will save the company about $1 billion in IT costs over the next few years. The company gave some of the 5,000 attendees a tour of one of the Houston centers to see how they might consolidate their own IT infrastructures.

Hurd’s one applause line in his presentation was his admission that HP needs to be more responsive to customers during the sales cycle: “When we actually show up at the account, we actually get more business than when we don’t. We’re working on that right now.”

To be more responsive, HP has cut the length of contract terms and conditions by two-thirds to make them easier to understand, said Ann Livermore, executive vice president of the technology solutions group, in her keynote.

That was welcome news to Sam Ayers of the International Tandem Users Group (ITUG), representing users of HP’s NonStop server line. Ayers chaired an ITUG advocacy committee that pushed for the streamlined contract terms. “It took a long time for that to be decided, but it’s here,” he said.

Ayers is an IT professional with Chase Paymentech Solutions, the largest credit, debit and gift card payment processor in the United States.

Hurd took only a handful of prescreened questions from the audience, and after his speech was quickly escorted out of the convention center and into a waiting Lincoln sport utility vehicle. Aides and security guards prevented a reporter from approaching him with questions about the HP board scandal.

State, federal and congressional investigations are probing allegations that HP hired a private investigation firm to find out who was leaking news of HP board deliberations to the media. The private agency allegedly obtained private phone records of directors and reporters under false pretenses to find out whom they were calling. Media reports Monday said investigative methods also included physical surveillance of people and an attempt to install surveillance software on a reporter’s computer.

Hurd made only a brief reference to the scandal in his keynote. When he mentioned that Jack Novia, HP’s managing director of the Americas region and senior vice president of the customer solutions group, was throwing out the first ball at a Houston Astros baseball game Tuesday evening, Hurd said: “I asked him not to embarrass the company, given the press coverage we’ve gotten over the last week.”

-Robert Mullin, IDG News Service (San Francisco Bureau)

Related Links:

• Reports: HP Probe Included Physical, E-Mail Tracking

• HP Obtained Reporters’ Phone Records in Probe

• HP Extends Deadline for Mercury Acquisition

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