Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bloomberg Customers


HP Leak: Let's Turn to the Evidence

Do not stop the presses. The celebrated news leaks that set Hewlett-Packard (HPQ) Chairwoman Patricia Dunn on a tear weren't news. The now-famous Jan. 23 scooplet by CNET News's (CNET) Dawn Kawamoto and Tom Krazit prompted Dunn to launch an ill-fated investigation to find the identity of the leaker. But every tidbit offered up by CNET's secret source—now known to be former director George Keyworth—was either conventional wisdom or already on the record.

Still, CEO Mark Hurd makes no apologies, calling HP's leak investigation "proper and appropriate." Herewith are snippets from the CNET story, each followed by a description of where the information appeared earlier.


"According to the source, HP is considering making more acquisitions in the infrastructure software arena. Those acquisitions would include security software companies, storage software makers, and software companies that serve the blade server market. The acquisitions would dovetail with HP's growth plans for its Technology Systems Group, which has already bought companies such as AppIQ for storage management."


In an Oct. 18, 2005, onstage interview at a Gartner Symposium in Orlando, Hurd laid out HP's acquisition strategy, noting recent purchases of ApplQ, software management company Peregrine Systems, and RLX Technologies, maker of server blade technology. "These are places where we are going to continue to invest," Hurd told the audience. HP posted a transcript of the interview on its Web site.


"On the chip front, although HP and Intel have had a long relationship involving their collaboration on the Itanium chip, delays by Intel have created frustration in the HP camp, the source said. As a result, HP may use Intel's archrival Advanced Micro Devices as a cattle prod of sorts to the chip giant, the source noted. 'We plan to use AMD's Opteron more and more,' the source said."


It was hardly a showstopper that HP was mulling over more reliance on AMD (AMD) chips. As early as July 17, 2005, IT blog TechWhack had reported an HP deal to use AMD microprocessors and quoted Stephen Shultis, HP's acting director of business notebook marketing, saying: "We're going to offer choice in the mobile space." Before long, an AMD-HP partnership was conventional wisdom. When Intel (INTC) slowed production of its dual core Itanium chip in October, Sun Microsystems (SUNW) began hyping itself as an HP alternative, using its Web site to label AMD's challenge to Intel "troubling" for HP.


"One area expected to get an internal technology revamp in the coming year and a half is direct sales, the HP source said."


The supply chain efficiency mantra has been on Hurd's lips from Day 1. A July 19, 2005, eWeek report on Randy Mott, HP's new chief information officer, noted that Hurd's wooing of Mott from Dell (DELL)—not to mention Mott's $15.3 million compensation package—was a sign that Hurd "expects to use data analysis and tracking as a competitive weapon" to smooth the supply chain and boost deliveries. By September, BusinessWeek reported that Mott had "big plans" for HP's information systems, calling them "a golden opportunity to cut costs," and noted Mott's plans to build "sophisticated data-mining capabilities" similar to Dell's to help increase sales (see, 9/12/05, "HP Says Goodbye to Drama").


"Though HP's direct sales technology is expected to undergo changes, one thing that's not likely to happen is a merging of the HP and Compaq PC brands, the source said. Because the Compaq brand is still recognized in the market, it offsets the additional costs associated with maintaining two brands, the source said."


In a Dec. 13, 2005, analyst call, Bear Stearns (BSC) analyst Andrew Neff asked why the company still sold computers under both the HP and Compaq brands. The brands "stand for different things," HP Executive Vice-President Todd Bradley said. In time, Bradley added, "You'll see much better delineation between the two." That day, InfoWorld had Bradley predicting the brand differentialwould be apparent in time for the fall, 2006, product cycle.

Woellert is a correspondent in BusinessWeek's Washington bureau.

blog comments powered by Disqus