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Originally published August 15, 2010 at 10:00 PM | Page modified August 16, 2010 at 6:51 AM

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Brier Dudley

NW tech industry has big stake in next HP chief

Whoever replaces Mark Hurd as CEO of Hewlett-Packard could have the biggest effect on the Northwest's tech industry in years. HP is the world's largest computer maker and Microsoft's biggest partner. It's also going through a transformation and cutting its longtime dependence on Redmond.

Seattle Times staff columnist

It's hard to focus when the sun's finally shining in Seattle, but we have to pay attention to the Mark Hurd story.

Hurd's the guy who grabbed a Perrier and leapt from Hewlett-Packard's cockpit, riding a golden parachute into history.

Before fudging expense accounts to cover dates with a former actress, the married chief executive and Jack Welch protégé dazzled investors with his Midas touch.

During his five-year tenure, HP consistently reduced spending on research and development relative to the company's sales.

Hurd slashed benefits and laid-off more than 40,000 as the nation approached its economic meltdown.

He also finished Carly Fiorina's work cleaning out HP's symbolic garage, replacing its antiquated, employee-oriented culture with a new emphasis on financial discipline and shareholder value.

So why should we care about Hurd and a fusty boardroom in Palo Alto, Calif.?

For one thing, whoever replaces Hurd could have the biggest effect on the Northwest's tech industry in years. Not Bezos or Gates big, but still big.

HP is the world's largest computer maker and Microsoft's biggest partner. It's also going through a transformation and cutting its longtime dependence on Redmond.

The new chief executive will also arrive during a period of upheaval in Silicon Valley, where the tech giants seem to be splitting into camps for or against Google and Apple. Microsoft's warming to Apple but everything seems up in the air.

A symbol of Microsoft's troubles with HP is the HP Slate computer that Steve Ballmer waved at the Consumer Electronics Show in January as the Microsoft comeback to Apple's iPad. It was to go on sale this holiday season, with Windows 7.

A few months later, HP spent $1.2 billion buying device-maker Palm, mostly because it wanted Palm's operating system for upcoming tablets and mobile devices — instead of Windows.


Around the same time, word surfaced that Ballmer declined to pursue a Microsoft tablet created by a skunkworks team in Redmond. Presumably Microsoft declined to produce its own iPad challenger to stay in good graces with computer makers, hoping they'd make Windows tablets.

When Ballmer talked up Windows tablets during a financial-analyst meeting last month, he demonstrated one from an obscure Chinese company.

The latest word is that HP may offer a Windows Slate to business customers, potentially giving it the same fate as the Tablet PC, and use Palm software for consumer models.

It could be a case of Apple envy, with HP thinking that it can best compete by building the whole package. Or maybe Palm was simply a better deal than buying 100 million copies of Windows for the exploding mobile-device market.

Either way, Hurd was surely influenced by his pals in the Valley. Since he resigned Aug. 6, his most vociferous defender has been Oracle founder Larry Ellison, a close friend and tennis partner. Ellison is also Microsoft's nemesis and was a ringleader in the Valley's great war with Redmond in the 1990s.

Hurd was also getting advice from Netscape co-founder Marc Andreessen, who was added to HP's board last September.

Is it any surprise Microsoft was on the outs?

HP's not the only PC maker playing the field. Microsoft's next biggest partner, Dell, chose Google's Android software for new phones and mobile devices such as the Streak, which went on sale last week. Combined, the HP and Dell situations raise questions about how Microsoft will fare in the next era of mobile computing.

One school of thought says Hurd should be replaced with someone more focused on innovation, beyond the balance sheet. That kind of person may be intrigued by the potential of the Palm software and pull further away from Microsoft, or realize it's a hassle to develop and support another operating system.

Some have suggested Hurd's job could go to Todd Bradley, head of HP's personal-computer group and the former head of Palm. The interim boss, Chief Financial Officer Cathie Lesjak, doesn't want the job permanently.

I wonder if Kevin Turner, Microsoft's chief operating officer, is a candidate.

Another intriguing candidate would be Paul Maritz, former head of platform strategy at Microsoft and the current chief executive of VMware.

This is much more than a Microsoft story, of course.

HP is also one of the largest tech employers in the Northwest, with thousands of workers at major facilities in Boise, Idaho, and Corvallis, Ore.

It used to employ thousands more in Vancouver, Wash., but it sold off most of that campus last year. Hurd promised investors he'd keep cutting the regional operations, casting a pall of uncertainty over communities like Corvallis.

Maybe I'm a little biased here. My father-in-law was a lifetime HP employee who retired before getting laid off, or transferred across the country and then laid off, as some co-workers were under Fiorina.

I'm just glad I don't live in California. Voters there have a bizarre predilection for washed-out tech executives who remake themselves as politicians.

It's still a land of opportunity for Hurd.

Brier Dudley's column appears Mondays. Reach him at 206-515-5687 or

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About Brier Dudley

Brier Dudley offers a critical look at technology and business issues affecting the Northwest. | 206-515-5687



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