And so it came to pass that on the 55th day — 55 days, that is, after firing its chief executive, Mark V. Hurd, for playing footsie with a consultant and fudging his expense accounts — the board of directors at Hewlett-Packard proudly announced it had found a new man to lead the company out of the wilderness.
Léo Apotheker, the former chief at SAP, will lead H.P.
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Ray Lane, who will be H.P.'s chairman, said Mr. Apotheker "got a raw deal" in the recession.
His name is Léo Apotheker, a suave European — how many American C.E.O.’s have an accent aigu in their name? — who had spent most of his career at SAP, the giant German maker of business software. SAP has one primary competitor: Oracle, the very same company that hired Mr. Hurd barely a month after H.P. let him go, in a move clearly intended not only to bolster Oracle but to humiliate H.P.
Oracle and H.P. had once been the closest of partners, with the latter selling the industrial-strength hardware that ran Oracle’s industrial-strength software. But that partnership appears to be dissolving. Earlier this year, Oracle completed its purchase of Sun Microsystems, a move that meant that it would now be trying to sell its own hardware, instead of encouraging customers to buy H.P. computers. What’s more, Larry Ellison, Oracle’s flamboyant founder, had taken to sending e-mail to reporters mocking the ineptitude of the H.P. board.
Is it possible that the hiring of Mr. Apotheker was motivated by the board’s desire to strike back at Oracle? And that, with Mr. Apotheker on board, H.P. would try to encroach on Oracle’s software stronghold just as Oracle was moving into H.P.’s hardware arena? There are analysts who are convinced that was the case.
H.P., of course, was adamant that nothing could be further from the truth. “Hiring him had nothing to do with fighting Oracle,” said Ray Lane, the former Oracle (!) president who is set to become H.P.’s chairman next month. “The board chose Léo because he was the best available athlete.”
There were other things about the appointment that seemed a bit odd. For instance, at the point at which the H.P. board hired him, Mr. Apotheker was unemployed.
You see, his tenure at SAP had ended abruptly in February, when the company’s executive board (as boards are called in Germany) declined to renew his contract. After being named co-C.E.O. in April 2008, he had just become sole C.E.O. in 2009 — meaning that he had been flying solo for just seven months when he was shown the door.
Maybe, as his defenders insisted, he was simply an unfortunate victim of the global recession. “He got a raw deal,” said Mr. Lane. But maybe, as I heard from others, his own missteps had contributed to his downfall. He had tried to raise prices aggressively for servicing SAP’s complex software, which had resulted in a customer revolt. A critical new initiative, called Business ByDesign, had flopped. And he had managed to alienate the SAP work force.
“My communication towards you was not always optimal,” he was quoted as saying in a memo SAP issued to its employees when he left. While I found some people who defended Mr. Apotheker’s management style —“He’s a tireless worker who gives everyone a second chance,” said Andre Boisvert, a former top software executive — I found just as many people who thought that Mr. Apotheker was likely to further traumatize the already demoralized H.P. staff. “If you wanted to find someone who represented the diametrical opposite of the H.P. way, it is Léo,” said Jason Maynard, a veteran technology analyst with Wells Fargo Securities. “He is tough as nails and chews glass for breakfast.”
Still, having written two unflattering columns recently about the H.P. board, I was inclined to take a pass on Mr. Apotheker’s hiring. But then I learned something about him that caused me to shake my head in disbelief.
Next month, Oracle and SAP are scheduled to go to trial in a case involving the wholesale theft of Oracle’s intellectual property by an SAP division. SAP has acknowledged its guilt; the only issue being litigated is the size of the damages. (Oracle is asking for $2 billion; SAP says it should have to pay only “tens of millions” of dollars.) As a member of SAP’s executive board, Mr. Apotheker clearly knew about the theft.
It takes your breath away, really: the same board that viewed Mr. Hurd’s minor expense account shenanigans as intolerable has chosen as its new C.E.O. someone involved — however tangentially — with the most serious business crime you can commit.
If it were anybody besides the H.P. directors, the situation would be unbelievable. With these guys, though, it’s all too believable.
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