Hurd: PC Business Is Key Pillar For Hewlett-Packard

Hewlett-Packard president and CEO Mark Hurd said the PC business is a key pillar of HP's goal to become the leading provider of enterprise technology.

Not only is HP's personal-systems portfolio a key component with customers, but it provides leverage with suppliers of components who source its higher-margin hardware businesses as well.

"I do believe the PC business brings leverage," Hurd said, speaking at HP's annual analyst meeting in New York for the first time. Hurd's remarks were noteworthy, given his known distaste for PCs at his prior employer NCR, which got out of the PC business during his tenure there, and given key rival IBM's decision last year to sell off its PC business to Lenovo of China.

Noting HP's notebook PC business grew 42 percent in its most recent fiscal year ended Oct. 31, Todd Bradley, executive vice president of the company's Personal Systems Group, said HP's PC business is twice the size of Lenovo, three times that of Acer, and it is gaining ground on Dell.

"Clearly, we are in a hypercompetitive marketplace," Bradley said. "We will drive world-class cost structures and processes to continue to drive profitable growth in the business. We are not planning to buy share at the expense of profitability, but to grow both simultaneously."In outlining his vision for HP, Hurd sees virtualization of distributed computing and storage, automated systems management, mobile computing and printing as key components of its growth in the coming years. Hurd said it will pursue that growth organically, through targeted acquisitions with a controlled cost structure. He emphasized he does not envision making any major acquisitions.

The CEO, who joined HP in April, said his goal is to "establish HP as the world's leading IT company." In describing his view of HP and the industry, Hurd predicts the cost of computing will continue to decline, a move away from mainframes to industry-standard platforms, virtualization that makes computing capacity ubiquitous, and the move toward self-healing systems.

Customers will either want to buy these systems themselves, acquire them through a partner or move to a fully outsourced model, Hurd said. "This trend I'm here to tell you, it isn't going to slow down, it's going to keep gaining momentum," he said.

Hurd also emphasized HP's largest business, printing and imaging, has plenty of room for growth. The CEO wants that business to be understood as a provider of printing solutions, not "printers," a distinction the company intends to emphasize as it moves into new areas of data output, such as commercial printing, graphics and visual communications.

Meanwhile, Hurd reiterated his objective to achieve growth through rigid cost controls and through partners who play by its rules. Though he has stated this before, he elaborated that there are some partners who take HP products, mix them with gray market goods and dilute HP's brand and revenues.Hurd said the company will not tolerate that behavior and will focus on partners who attach HP products and services, along with their own technical and vertical industry expertise.

"We want to incent that latter behavior, and we want to reward that behavior," he said. "The better you perform, the more money you make."