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Technology battles are all about being daring. And, who dares wins as the likes of Microsoft and SAP suggest. It appears that those opposing Carly Fiorina ignore the fact that HP is a company with serious underlying problems. Most businesses she inherited are aging and in mature markets. Compaq's Michael Capellas has a similar story to tell. The fate of the merger depends on how she wins over her adversaries. If she wins, she will have won half the battle. If she does not, she will still be remembered as a daring leader.
In the near term, it's a gold mine for usit doesn't change our strategy a bit. It makes them a larger, more confused competitormore dependent on the PC.
While critics have had their moments of joy ever since the HP-Compaq merger deal was announced, this has not stopped the seemingly dare devil Carly Fiorina, the CEO of HP, to move ahead with her plans. Her bravery got her the approval of the EU anti-trust commission, which cleared the merger much to the chagrin of those who predicted it would go the GE-Honeywell way. But Fiorina's woes are far from over. By throwing his hat into the ring along with other deal opponents, Walter Hewlett, the HP scion, has opened one more front for the duo of Fiorina-Capellas to battle out even before they gear up to fight many more crusades with their rivals, provided the merger goes through as planned.
HP, which until the late 1960s manufactured only testing and measurement equipment, was among the winners of successive waves of information technology, including PC and client-server computing, long dominant architecture of corporate network. It also made it big with peripherals like printers and scanners. But times have changed; the firm's vision, now, is to be a customer-focused and integrated provider of information appliances, highly reliable IT infrastructure and "e-services".
The new HP is likely to be better positioned to address the challenges of the new environment. The merger will expand HP's enterprise capabilities across products, software and solutions. HP's strength in data center Unix and management software together with Compaq's strengths in industry standard servers, enterprise storage and high performance computing would result in the richest enterprise portfolio in the industry. The combination appears to be a good response to the industry dynamics and changing customer needs. The combine stands a good chance of achieving growth and critical mass in global services; the latest HP quarterly numbers lend credence to this belief. It would also double the size of services business and extend the reach into new markets and growth opportunities. At the same time, the new HP would have improved economics of the PC business along with the ability to drive innovation in new markets and new categories of devices.
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