cyberspacial musings
bits about the real and virtual worlds

19 Mar

Big Day for Compaq and HP

Today’s the big day. Just shortly after this post, the shareholder’s meeting starts to decide whether HP and Compaq will officially merge (see Reuters story on Yahoo). This has been one of the more interesting stories this year. It’s been a tug-of-war between the old and the new, as HP CEO Carly Fiorina works to bring HP into a space that’s competitive with the IBM Global Services that former IBM CEO Lou Gerstner created. Make no mistake — this deal isn’t about Compaq’s ability to manufacture computers. This deal is almost entirely about the integration and services group at Compaq. A merged company would hold a substantial stake in the lucrative computer services market.

Historically, HP has been a collegial environment, but that will change with this merger. This is what has been troubling the Hewlett families. The employment-for-life, laid back environment of the HP Way (the inspiration for the Apple Way) must change in today’s economy. Until last year, HP had never had a layoff. Pretty amazing, but Fiorina believes that life has changed enough now that HP must change with it.

This vote is as much a vote about Carly Fiorina and her leadership as it is about merging two companies. If this merger fails, it will take all of 10 minutes for Fiorina to clean out her desk. That would likely be a real shame. Although she has had her ups and downs at HP, her vision of HP as an IBM competitor is probably the only way for HP to continue to exist.

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