HP to have merger map in 100 days

Daily Newsletters

Sign up to ZDNet UK's daily newsletter.

NEWS
Like a newly inaugurated US president, the new Hewlett-Packard is giving itself 100 days to flesh out its strategic vision. Jim McDonnell, vice president of worldwide marketing for the business customer unit at HP, said on Wednesday that the transition team charged with overseeing HP's acquisition of Compaq Computer will try to formalise a strategy for how the new company will operate in relatively short order. "Within 100 days, we should have a very, very solid plan," he said. "We believe we can combine the strengths of the two companies and discard the weaknesses." The need for speed grows partly out of concerns over the gargantuan task of combining the two companies, which have combined annual revenue of approximately $87billion and many overlapping departments. Analysts, industry executives and others have said the inordinate amount of time Compaq took to formalise its acquisition of Digital Equipment is one of the principal reasons for the company's decline since 1998. In fact, the plan, which will only be shared internally, is likely to be finished well before regulators approve the merger, a process that takes about six to eight months. Webb McKinney, vice president of HP's computing group, and Jeff Clarke, Compaq's chief financial officer, are heading up the integration team. HP's transition plan will have to tackle a number of issues. Because of the merger, HP finds itself responsible for supporting multiple server operating systems, for example: Linux, Windows NT, OpenVMS, HP-UX and Compaq's own version of Unix, among others. Eventually, HP will converge toward Linux, NT and Unix, according to McDonnell. The challenge will lie in coming up with a product road map that will push customers toward a more streamlined OS portfolio without alienating them. The transition plan will also likely include internal product road maps, plans for combining different departments and plans for explaining how the merger will benefit large corporate customers, he said. The plan, however, won't look into issues such as pricing, technological cooperation or other issues that might violate antitrust laws in countries where HP does business. The public also won't see the strategic plan until after regulatory approval is granted, if then. "It is not going to be shared externally," McDonnell said. While acknowledging the difficulty of the task ahead, McDonnell said it should be an easier task than when Compaq bought Digital. "They were completely different types of companies," he said. "The cultural differences between Compaq and HP are relatively minor." On other notes, McDonnell termed the largely critical response to the merger by Wall Street analysts and the press as superficial. Shares in both HP and Compaq have declined sharply since Tuesday. When the merger was announced, HP's stock offer amounted to $25bn. By Wednesday night, it was down to $18bn. Many critics have looked at the merger as a deal between two PC companies, he noted, although HP and Compaq operate in many other markets. "We thought a lot of the industry reaction was very superficial," McDonnell said. "This is not about a PC company. This is more than a PC company." McDonnell also hinted that the combined company may continue HP's strategy of outsourcing manufacturing. Over the past few years, HP has increasingly shifted manufacturing to contractors. Compaq has too, but it has also attempted to create a build-to-order manufacturing facility, a la Dell Computer. The manufacturing strategies of both companies are fairly complex, but he added that "Compaq has made moves toward outsourcing." See techTrader for the latest financial news in the high-tech sector. See the Business News Section for full coverage. Have your say instantly, and see what others have said. Click on the TalkBack button and go to the techTrader forum Let the editors know what you think in the Mailroom. And read other letters.

Post your comment

In order to post a comment you need to be registered and logged in.

You can also log in with Facebook. Log in or create your ZDNet UK account below

  • Login

Will not be displayed with your comment

By signing up for this service, you indicate that you agree to our Terms and Conditions and have read and understood our Privacy Policy. Questions about membership? Find the answers in the Community FAQ

Get ZDNet UK's daily newsletter

Enter your email address to sign up

ZDNet UK Live

GHar123

I totally dislike pirating of works, I fear that artists will be deterred from creating works if they think that they are going to get ripped off....

1 hour ago by GHar123 on ACTA stumbles in Germany
JCB33

How dare film makers, artists or anybody that invests in creativity stop us pirating their works for free. I want to be able to walk into my local...

7 hours ago by JCB33 on ACTA stumbles in Germany
Moley

@GrueMaster. I prefer horses for courses rather than one size fits all. I, and I suspect most other computer users, do not really wish to have...

9 hours ago by Moley on A tale of two distros: Ubuntu and Linux Mint
greycynic

The product that scares me every time I have to use it is the Office 2007 version of Excel. The first bug that I found was applying the median...

9 hours ago by greycynic on Ten flawed products that derail productivity
GrueMaster

Nice review and very informative. One thing I'd like to add (in reply to whs001's 1st question), the main reason to have the same interface from...

11 hours ago by GrueMaster on A tale of two distros: Ubuntu and Linux Mint
Frederick Wrigley

I'be been using Mint 12 since the RC came out, and I am far more happy with the Cinnamon, the Mate, and, yes (with extensions), theGnome 3...

11 hours ago by Frederick Wrigley via Facebook on A tale of two distros: Ubuntu and Linux Mint
bdantas

Excellent article. One small correction, though--although a fresh installation of Linux Mint 12 will, indeed, provide the user with a version of...

12 hours ago by bdantas on A tale of two distros: Ubuntu and Linux Mint
Alan Ralph

In related news, the ISPs club together to get the members of the Home Affairs Select Committee (ya goofed on that part, ZDNet UK) copies of "The...

12 hours ago by Alan Ralph via Facebook on MPs urge ISPs to take down terrorist material
Alan Ralph

In related news, the ISPs club together to get the members of the Home Affairs Select Committee (ya goofed on that part, ZDNet UK) copies of "The...

13 hours ago by Alan Ralph via Facebook on MPs urge ISPs to take down terrorist material
Moley

For Gnome 2 die-hards, it is possible to add icons to the bottom panel (or top top panel, if you prefer) which provide the exact Gnome 2...

13 hours ago by Moley on A tale of two distros: Ubuntu and Linux Mint
ramwellian

Your comments would seem pretty naive and immature. Your 'solution' appears to be, "gee, let's all just give in to the hackers and give them...

14 hours ago by ramwellian on Cloud computing security: no more oxymoron?
BugStalker

"Interesting thought ... If you installed Win7 as a dual boot on a machine that previously only had Linux, and it wrecked your Linux installation,...

14 hours ago by BugStalker on Windows 7 Declares War on GRUB
whs001

This is an excellent summary of Ubuntu and Mint and the interface differences between them. Most such articles take a very partisan position for...

14 hours ago by whs001 on A tale of two distros: Ubuntu and Linux Mint
Moley

@ewallace. Not so clear. Anyone can obtain the text, for example from here http://www.ustr.gov/webfm_send/2379. I support ACTA so long as it and...

14 hours ago by Moley on ACTA: Facts, misconceptions and questions
45283

I think WinRT is fantastic. I just wish it was an option for people that didn't want to go through Microsoft's App Store with its attendant...

17 hours ago by 45283 on Why Windows 8 needs architectural hygiene for WOA
Burn-IT

Nine people? £30m? Who's back pocket is that lot going in? And IF they say it is for new buildings, what about all the ones the government has...

18 hours ago by Burn-IT on Police set to launch three £30m e-crime hubs
ewallace

Just to be clear, nobody knows what is in the text of ACTA, here is a photograph of the text of ACTA http://twitpic.com/8h9iju as submitted to the...

19 hours ago by ewallace on ACTA: Facts, misconceptions and questions
fgvrg56

Unfortunately main issue is that ASUS is refusing to accept that they make some mistake on this version of asus Transformer prime. 1 - GPS sensor...

20 hours ago by fgvrg56 on Asus Eee Pad Transformer Prime Wi-Fi & GPS problems?
Ben Woods

@Marcus A fair question. Just talked with Archos which said it was working on an announcement for next week....

21 hours ago by Ben Woods on Archos confirms G9 Ice Cream Sandwich update schedule
Marcus Karlsson

Any update on this, considering the claimed "first week of February"?

22 hours ago by Marcus Karlsson via Facebook on Archos confirms G9 Ice Cream Sandwich update schedule