Carly's Latest Challenge

Hewlett-Packard announced its lower-than-expected third-quarter earnings and posted an operating loss of $208 million. CEO Carly Fiorina blamed the loss to business server and storage unit and fired three executives, including Peter Blackmore, head of the company's sales arm to businesses.

While decisive in her decision to fire under-performing executives, Carly has an uphill battle to fight in defending her most controversial move to acquire Compaq in 2002. BusinessWeek says, "Nowhere are HP's missteps more obvious than in its storage business. When the merger was announced, Compaq was the storage kingBut under HP, the group has stumbled, losing focus and key talent."

Carly was somewhat successful in having breathed new life into a proud but aging company and steered one of the most audacious business transformations of all times. Will she be able to curb the brain drain and bring HP back into black? Do you think its acquisition of Compaq was to blame? Was Wall Street unforgiving to Carly, and should she be given more time?

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  • Steve

    I attended a networking event where a CIO proceeded to tell me a story about HP telling the company that they had to upgrade their SAN. After the upgrade, systems stopped working.

    HP groups and former Compaq groups proceeded to argue with each other. This kind of service leads to lower revenues.

    Mergers may work for a while -- due largely to cost cutting -- but in the long run they seldom work.

    Look at spin offs and why they work. Tighter focus on market and customers.