HDS Shuffles Deck on QT

Hitachi Data Systems (HDS) has quietly swapped CEOs, and at least three of its top executives have left the company in a major management reorganization that went unannounced.

Indeed, HDS's Website still presents a view of the executive team that's out of date. Instead of Dr. Jun Naruse, the CEO is now Shinjiro Iwata, who took the post September 4. Naruse, a 31-year veteran of Hitachi who was appointed CEO when HDS reorganized in April 2000, hasn't gone far, however; he's reportedly left HDS to return to its parent company, Hitachi Ltd. (NYSE: HIT; Paris: PHA).

Shinjiro Iwata has reappeared on the HDS roster after an extended absence. In 1999, he was senior VP of business development at HDS, but with the shuffle in April 2000, he appeared to have dropped from the scene, apparently "headed back to corporate," or Hitachi Ltd.

Iwata's heading up a team that's changed too. Ron Gervenack, former general manager of enterprise products and solutions, has retired. John Lovejoy, former Information Technology Group general manager and chief information officer, and Clive James, former VP and general manager of the OEM Business Unit, have split the scene. Lovejoy had been with the company for about three years; James, for more than 18.

Hitachi spokespeople said the vacated positions have not been filled. They have furnished no information regarding other executive vacancies or the reasons for the reorganization.It's not unusual for executives to appear and disappear at HDS. The company's executive roster has changed nearly annually over the past few years. Only two of the top nine executives from 1999's team, for example, remain on the roster (at least, to the best of Byte and Switch's knowledge): Dave Roberson and Shinjiro Iwata.

The news of the reorg apparently proves that HDS isn't immune to the same market upsets that have plagued its rivals, including EMC Corp. (NYSE: EMC).

Today, its parent company announced its results for the first half of fiscal 2001, ended September 30, posting a net loss of $929 million.

According to Hitachi's statement today, "The Company is implementing emergency management measures to cut fixed costs and boost management efficiency in order to bring about an early improvement in its business results, and is also carrying out sweeping management reforms and restructuring." (Emphasis added.)

The irony here is that the poor financials don't seem to be the fault of HDS. Indeed, Hitachi's press statement indicates that "Storage solutions were... steady, especially overseas." And HDS has garnered lots of positive news lately, reportedly beating EMC to 2-Gbit/s Fibre Channel (see Hitachi Hoists 2-Gig Standard) and putting it to shame in analyst polls (see EMC Slides Down Poll