REACTION: Despite Apotheker being ousted, uncertainty still looms over HP, says Ovum

REACTION: Despite Apotheker being ousted, uncertainty still looms over HP, says Ovum

Analyst weighs in on the curious case of Leo Apotheker

The last few weeks have been chaotic for American PC vendor, Hewlett-Packard (HP), with the shock announcement it would be getting rid of its PC business by the end of the year (or maybe not) and shuttering its (WebOS tablet initiative (or maybe not).

These announcements have created a significant degree of uncertainty about the company not only among shareholders, but among public and enterprise customers as well.

“HP is flailing, causing more uncertainty and increasing the risk of doing business with it,” Ovum research fellow, Carter Lusher, said.

“As a consequence, CIOs should beware of the downsides of making major commitments to HP products and services.”

As early as Wednesday, the word on the grapevine was that HP’s Board of Directors were meeting to decide whether or not to CEO Leo Apotheker should be replaced.

This rumour became fact just a day later, with Apotheker being ousted from his position and replaced by HP director Meg Whitman, who formerly headed up online auction site, eBay, as CEO.

However, despite the Board’s seemingly swift ousting of Apotheker, who was in the position for less than a year, Ovum’s Lusher believes that damage has already been done and HP is being increasingly seen as a company in disarray.

“This is a damning indictment of not just the new CEO, but also the Board itself,” Lusher said.

With HP employees already demoralised after severe cost cutting and layoffs that have spanned over a decade, Lusher warns that it is possible that other “key executives and staff are getting ready to leave or are mentally out the door.”

As a result of all of this malaise and uncertainty that has been hanging over HP, Ovum's advice for organizations is to adopt a “risk premium” approach when dealing with HP, and ask for better discounts, pricing, or packaging during deal negotiations.

“CIOs should also explore new terms and conditions that protect the company should HP be broken or experience major disruption to its business,” Lusher added.

Ovum recently found that mobile phone shipments (will surpass 835 million in Asia-Pacific.

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