HP CEO barely mentions scandal at customer conference

18.09.2006
Hewlett-Packard Co. CEO Mark Hurd, whose company is under investigation by state and federal investigators over how it acquired private telephone records of board members, appeared before thousands of HP customers Monday and barely mentioned the boardroom scandal.

Speaking at HP's Technology Forum, Hurd spoke of the company's problems obliquely when he told attendees that Jack Novia, its managing director and senior vice president of technology in the solutions group, would be throwing out the first pitch Tuesday night at Houston Astros game. Hurd said he hoped Novia wouldn't "embarrass the company with all the press that we have had over the past week."

That was it on this subject from Hurd, who otherwise emphasized the company's overall technology strategy and left questions about some of the specifics of that direction to other HP officials expected meet with the 5,200 attendees.

The forum comes about two weeks after the company disclosed in a filing with the U.S. Securities Exchange Commission that it had obtained telephone records of board members, reporters and others in an attempt to determine who was leaking board information. Its acquisition of telephone records has touched off state and federal investigations and the threat of criminal charges, as well as a congressional inquiry.

Some HP officials are nonetheless discussing the company's boardroom problems.

One conference attendee, Mark Yturralde, a systems engineer at a major health care provider that he asked not be identified, attended two technical sessions yesterday. At each one, the speakers spent a few minutes on the board's problems, seeking to assure attendees that it's not going to be a big problem or affect HP technology. Yturralde said he's really not interested in hearing about HP's boardroom troubles.

"I'm more hoping that they just concentrate on technology and the company and don't make an overly big deal over the whole scandal -- everybody seems to be obsessing over this," said Yturralde. "It happened in the past. I don't really think it affects us, the IT guys."

This conference is intensively focused on technology. There are no sessions exploring the ethics and legality of pretexting -- the practice of acquiring telephone records by pretending to be someone else -- or sessions examining boardroom best practices. The issue that users interviewed here are most interested in are those that have dogged the company for a long time, such as the future of HP-UX, its Unix operating system.

"I'm a techie, and I just want to know if there's a long-term future for Unix or HP-UX, or is everything going to be migrated to the hegemony of Microsoft," said Rob Roy, who works for Advanced Technology Solutions Inc. in Dallas, a systems consulting firm. He said he will be looking for insight into HP's long-term direction on HP-UX and how it fits into its emphasis on open systems, "which they categorize as Windows more even than Linux. That leaves HP-UX out in the cold, I think."

Dan Berry, a senior systems engineer at Lockheed Martin Corp., called the boardroom issue a "big distraction. I don't want to hear anything more about telephone records."

Berry said his chief concern involves HP's decision to move off its PA-RISC chip. Lockheed runs a major human resources system on hardware based on that chip, and migrating to Itanium -- HP's recommended customer direction -- will cost his company millions of dollars.

"What happens when I have to buy another server and I've got an Itanium server and the rest are all PA-RISC and I can't have a dual development and operating environment?" said Berry. "I have to do a massive upgrade all at one time across the world."

The operating system supporting the human resources application is HP-UX, he said.

Fernando Guerrero, a manager at Grupo CMA, a Costa Rica-based IT provider, also wants to hear more about HP's plans for its Itanium-based server line, Integrity. He feels that HP is moving ahead on encouraging use of this system, but he believes the company has "to be more aggressive."

When asked yesterday what he wanted Hurd to address, one IT director at a large company who didn't want to be identified said, "What's most important is [Hurd] showed up, that he's here. Carly never came." He was referring to Carly Fiorina, HP's former chairman and CEO. "I think it's important that Mark Hurd is coming."

Hurd Monday painted the company's objectives in broad brushstrokes, stressing the need to become more efficient and grow by cutting the company's decision-making bureaucracy.

He said the company is trying hard to "reduce our layers of management. I have firm belief that the the fewer number of layers you've got, the more speed you have, [and] the less cost you have, the less complexity."

At the end of his talk, Hurd was asked a series of questions by Novia on index cards, called "secret questions." None concerned the pretexting scandal or even specifics about some of the technology issues users have raised, such as HPUC. One question dealt with the differentiators that separate HP from its competitors. Hurd said the company would stay with its core technology and wouldn't push into consulting.

"Core technology, core services around that technology," he said, explaining the company's direction.