Home Why HP Picked Former SAP CEO Léo Apotheker, and What HP Should Do Next

Why HP Picked Former SAP CEO Léo Apotheker, and What HP Should Do Next

HP announced today that former SAP CEO Léo Apotheker will fill the role vacated by now ex-CEO Mark Hurd. The move has surprised many who expected the role to go to someone within HP. Apotheker’s stint at SAP was somewhat less than stellar – he was CEO for only 7 months before being resigning when his contract wasn’t renewed.

However, he had a 20 year career at SAP and had been the co-CEO for nearly two years before transitioning to CEO. CNET‘s Erica Ogg has the best take on the news I’ve seen: she suggests that Apotheker was hired for his established relationships with enterprise customers.

Léo Apotheker, image via SAP

Additionally, HP announced former Oracle president Ray Lane will join HP’s board of directors. Olgg notes that some say Lane was “ruthlessly forced out” of Oracle by Oracle CEO Larry Ellison.

Ellison was a vocal critic of HP’s decision to force Hurd out after a sexual harassment scandal. Hurd was cleared of wrong doing in the sexual harassment investigation, but HP’s board fired Hurd when it discovered Hurd had falsified expense reports. Hurd joined Oracle as co-president shortly there after, prompting a lawsuit from HP that was recently settled.

Ogg notes that hiring both the CEO of Oracle arch-rival SAP and a former Oracle president will likely heighten the drama of HP’s competition with Oracle.

Altimeter Group co-founder and analyst R “Ray” Wang told us: “Despite Leo’s ascerbic style and approach, he may be the right person to kick HP up a notch and gain the software and services footing it sorely needs” and “Ray Lane’s appointment to the board indicates a clear drive for HP to move towards software and M&A’s. Ray brings calmness, wisdom, and stability to the board.”

Wall Street isn’t so sanguine – HP’s stock is down 3% following the news.

What’s Next for HP?

ZDnet‘s Larry Dignan suggests that HP may buy SAP to compete with Oracle. Rumors have been spreading that SAP is considering buying Sage.

Wang suggests that HP purchase Salesforce.com – another Oracle rival – instead. “HP needs to make acquisitions in software to take it to the next level,” he says “SAP is legacy. Salesforce.com is the future.”

I’m not so sure about SAP being “legacy,” but it’s SaaS offering isn’t selling well. And I’m also not sure how well Salesforce would mix with HP culturally, but it would indeed be a bold move on HP’s part.

What do you think HP should do next?

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