HP to maintain focus on PCs and blades

18 Jun 2007

Unlike its nearest competitor IBM, technology giant HP has no intention of ever exiting the personal computing business, the head of HP’s US$33bn Tech Solutions Group Ann Livermore (pictured) told siliconrepublic.com.

The personal computer business has proven to be tough and competitive. IBM two years ago sold off its PC division to Chinese player Lenovo and Dell is currently cutting its headcount by 10pc in order to get its operating margins under control.

But Livermore said HP has no intention of leaving the PC business. “The PC business is an attractive business. If you look at HP’s performance in the last few quarters, the company has done exceptionally well in profit and revenue growth. We have the No 1 market share position in computing and gained share and improved profits. That’s because we are executing well.”

Livermore leads a 100,000-strong workforce and is a 24-year veteran of the IT giant. HP last year posted US$91.7bn in annual revenues, compared with US$91.4bn by IBM, making HP the largest IT vendor in the world in terms of sales.

Last year her group turned in US$1.9bn of the US$4.2bn operating profits HP turned in.

Livermore has been listed No 14 on the Fortune 50 Most Powerful Women in Business. She is also No 19 on the Forbes list of the world’s 100 Most Powerful Women

She was the only internal candidate who made the shortlist for the CEO position before HP appointed former Lucent executive Carly Fiorina to the role. Livermore remained in her current post when Mark Hurd took over as CEO and she has worked with Hurd to engineer a dramatic turnaround in HP’s performance since 2005.

“We were smart about where the market was going. We took a bet on notebooks, emerging markets and on having a strong consumer business. And for the industry those three areas is where growth has occurred. We took those bets several years ago.

“Part of what you see when a company is performing well is often a reflection of strategic choices made several years earlier and good execution in current quarters.”

Livermore said the current bet that the company is taking very seriously is on blade server technology, capturing 45pc of the current world market. “That was a bet we took four years ago. We made our investments and now we’re seeing the growth.”

As one of Ireland’s largest employers, Livermore is adamant that the company has achieved a good return on investment from its Irish operations.

“The powerful thing for us in Ireland is that we’ve so many different business divisions present, from printing and manufacturing to international banking. As a cross section of HP as a whole all the areas that are growing for us are based in Ireland.”

Livermore brushed off the thorny subjects of Ireland’s 12.5pc corporate tax rate, the issue of repatriation of funds by US multinationals back to the US and the volatile US dollar rate by saying: “One of the fastest things a country can do is to change its financial attractiveness.

“But what we look for is the availability of a strong workforce and a stable political and economic environment. A number of those vectors are favourable for Ireland,” she said.

By John Kennedy

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