German pick
October 1, 2010
US technology giant Hewlett-Packard has reached outside its own ranks to tap European software veteran Leo Apotheker as CEO, replacing recently ousted Mark Hurd.
The move signals HP's determination to continue a strategic direction under Hurd's leadership. Confronted with shrinking margins in its traditional computer and printer business, the former CEO had given expanding focus to high-profit markets for software and technology services.
Successful sales record
Apotheker could cement that strategic direction. The 57-year-old executive worked for more than 20 years at the Walldorf-based business software maker SAP, where he successfully built up the company's national and international sales. From April 2008 to July 2009, he served as co-CEO with Henning Kagermann before taking over as the company's solo chief executive. And in that role, he executed SAP's first major acquisition, a $7.5 billion (5.5 billion euros) buyout of business intelligence software maker Business Objects.
At the top, however, Apotheker stumbled. Under his leadership, SAP suffered delays in introducing new business software targeted at small and medium-sized business, an area in which the company had been struggling to grow for years. It also introduced maintenance fees in the middle of the economic crisis – only to back down after numerous big customers complained.
In addition to these and other missteps, Apotheker gained a reputation along the way for having lost touch with employees, clients and shareholders. And the latter hurt: SAP's shares had lost more than half their value by the time the CEO left the company earlier this year after a mutual agreement with the company's board.
Picking a winner
If Apotheker's ascension to the top of SAP surprised many – he was the first CEO who was unable to write software code – his rise to the top of HP is just as surprising: he knows little about the hardware business.
But that doesn't seem to be an issue with HP's management board. "Leo is a strategic thinker with a passion for technology, wide-ranging global experience and proven operational discipline – exactly what we were looking for in a CEO," said Robert Ryan, lead independent director of the HP board, in a statement. "After more than two decades in the industry, he has a strong track record of driving technological innovation, building customer relationships and developing world-class teams."
This time, HP hopes it has picked a winner after two abrupt CEO departures in just five years. Hurd quit in August amid a scandal and his predecessor, Carly Fiorina was given the boot in 2005 by board members unhappy with HP's financial performance.
Author: John Blau
Editor: Chuck Penfold