|Last logo of Hewlett-Packard used from 2010 to 2015; now used by HP Inc.|
HP headquarters in Palo Alto, California, U.S.
|Traded as||NYSE: HPQ|
|Fate||Renamed as HP Inc.|
Hewlett Packard Enterprise
|Founded||January 1, 1939|
Bill Hewlett and |
|Defunct||November 1, 2015 (main company) (For Hewlett Packard Enterprise). Now operating as HP Inc.|
|Headquarters||Palo Alto, California, U.S.|
|Products||See list of HP products.|
|Subsidiaries||List of subsidiaries|
The Hewlett-Packard Company (commonly referred to as HP) or shortened to Hewlett-Packard (/
The company was founded in a one-car garage in Palo Alto by Bill Hewlett and David Packard, and initially produced a line of electronic test equipment. HP was the world's leading PC manufacturer from 2007 to Q2 2013, after which Lenovo came to rank ahead of HP. It specialized in developing and manufacturing computing, data storage, and networking hardware, designing software and delivering services. Major product lines included personal computing devices, enterprise and industry standard servers, related storage devices, networking products, software and a diverse range of printers and other imaging products. HP marketed its products to households, small- to medium-sized businesses and enterprises directly as well as via online distribution, consumer-electronics and office-supply retailers, software partners and major technology vendors. HP also had services and consulting business around its products and partner products.
Hewlett-Packard company events included the spin-off of its electronic and bio-analytical measurement instruments part of its business as Agilent Technologies in 1999, its merger with Compaq in 2002, and the acquisition of EDS in 2008, which led to combined revenues of $118.4 billion in 2008 and a Fortune 500 ranking of 9 in 2009. In November 2009, HP announced the acquisition of 3Com, with the deal closing on April 12, 2010. On April 28, 2010, HP announced the buyout of Palm, Inc. for $1.2 billion. On September 2, 2010, HP won its bidding war for 3PAR with a $33 a share offer ($2.07 billion), which Dell declined to match.
Hewlett-Packard split the PC and printers business from its enterprise products and services business on November 1, 2015, resulting in two publicly traded companies: HP Inc. and Hewlett Packard Enterprise. In 2017, Hewlett Packard Enterprise spun-off its Enterprises Services division as DXC Technology and its Software division to Micro Focus.
Bill Hewlett and David Packard graduated with degrees in electrical engineering from Stanford University in 1935. The company originated in a garage in nearby Palo Alto during a fellowship they had with a past professor, Frederick Terman at Stanford during the Great Depression. Terman was considered a mentor to them in forming Hewlett-Packard. In 1938, Packard and Hewlett begin part-time work in a rented garage with an initial capital investment of US$538. In 1939 Hewlett and Packard decided to formalize their partnership. They tossed a coin to decide whether the company they founded would be called Hewlett-Packard (HP) or Packard-Hewlett. HP incorporated on August 18, 1947, and went public on November 6, 1957.
Of the many projects they worked on, their very first financially successful product was a precision audio oscillator, the Model HP200A. Their innovation was the use of a small incandescent light bulb (known as a "pilot light") as a temperature dependent resistor in a critical portion of the circuit, the negative feedback loop which stabilized the amplitude of the output sinusoidal waveform. This allowed them to sell the Model 200A for $89.40 when competitors were selling less stable oscillators for over $200. The Model 200 series of generators continued until at least 1972 as the 200AB, still tube-based but improved in design through the years.
One of the company's earliest customers was Walt Disney Productions which bought eight Model 200B oscillators (at $71.50 each) for use in certifying the Fantasound surround sound systems installed in theaters for the movie Fantasia.
HP is recognized as the symbolic founder of Silicon Valley, although it did not actively investigate semiconductor devices until a few years after the "traitorous eight" had abandoned William Shockley to create Fairchild Semiconductor in 1957. Hewlett-Packard's HP Associates division, established around 1960, developed semiconductor devices primarily for internal use. Instruments and calculators were some of the products using these devices.
HP partnered in the 1960s with Sony and the Yokogawa Electric companies in Japan to develop several high-quality products. The products were not a huge success, as there were high costs in building HP-looking products in Japan. HP and Yokogawa formed a joint venture (Yokogawa-Hewlett-Packard) in 1963 to market HP products in Japan. HP bought Yokogawa Electric's share of Hewlett-Packard Japan in 1999.
HP spun off a small company, Dynac, to specialize in digital equipment. The name was picked so that the HP logo "hp" could be turned upside down to be a reverse reflect image of the logo "dy" of the new company. Eventually Dynac changed to Dymec, then was folded back into HP in 1959. HP experimented with using Digital Equipment Corporation (DEC) minicomputers with its instruments, but after deciding that it would be easier to build another small design team than deal with DEC, HP entered the computer market in 1966 with the HP 2100 / HP 1000 series of minicomputers. These had a simple accumulator-based design, with registers arranged somewhat similarly to the Intel x86 architecture still used today. The series was produced for 20 years, in spite of several attempts to replace it, and was a forerunner of the HP 9800 and HP 250 series of desktop and business computers.
The HP 3000 was an advanced stack-based design for a business computing server, later redesigned with RISC technology. The HP 2640 series of smart and intelligent terminals introduced forms-based interfaces to ASCII terminals, and also introduced screen labeled function keys, now commonly used on gas pumps and bank ATMs. The HP 2640 series included one of the first bit mapped graphics displays that when combined with the HP 2100 21MX F-Series microcoded Scientific Instruction Set enabled the first commercial WYSIWYG Presentation Program, BRUNO that later became the program HP-Draw on the HP 3000. Although scoffed at in the formative days of computing, HP would eventually surpass even IBM as the world's largest technology vendor, in terms of sales.
Although Programma 101 was the first commercial "desktop computer", HP is identified by Wired magazine as the producer of the world's first device to be called a personal computer, the Hewlett-Packard 9100A, introduced in 1968. Programma 101 was called "computer personale" (in Italian), at Fiera di Milano, 1966. HP called it a desktop calculator, because, as Bill Hewlett said, "If we had called it a computer, it would have been rejected by our customers' computer gurus because it didn't look like an IBM. We therefore decided to call it a calculator, and all such nonsense disappeared." An engineering triumph at the time, the logic circuit was produced without any integrated circuits; the assembly of the CPU having been entirely executed in discrete components. With CRT display, magnetic-card storage, and printer, the price was around $5,000. The machine's keyboard was a cross between that of a scientific calculator and an adding machine. There was no alphabetic keyboard.
Steve Wozniak, co-founder of Apple, originally designed the Apple I computer while working at HP and offered it to them under their right of first refusal to his work, but they did not take it up as the company wanted to stay in scientific, business, and industrial markets. Wozniak said that HP "turned him down 5 times", but that his loyalty to HP made him hesitant to start Apple with Steve Jobs.
The company earned global respect for a variety of products. They introduced the world's first handheld scientific electronic calculator in 1972 (the HP-35), the first handheld programmable in 1974 (the HP-65), the first alphanumeric, programmable, expandable in 1979 (the HP-41C), and the first symbolic and graphing calculator, the HP-28C. Like their scientific and business calculators, their oscilloscopes, logic analyzers, and other measurement instruments have a reputation for sturdiness and usability (the latter products are now part of spin-off Agilent's product line, which were later spun-off from Agilent as Keysight Technologies). The company's design philosophy in this period was summarized as "design for the guy at the next bench".
The 98x5 series of technical desktop computers started in 1975 with the 9815, and the cheaper 80 series, again of technical computers, started in 1979 with the 85. These machines used a version of the BASIC programming language which was available immediately after they were switched on, and used a proprietary magnetic tape for storage. HP computers were similar in capabilities to the much later IBM Personal Computer, although the limitations of available technology forced prices to be high.
In 1984, HP introduced both inkjet and laser printers for the desktop. Along with its scanner product line, these have later been developed into successful multifunction products, the most significant being single-unit printer/scanner/copier/fax machines. The print mechanisms in HP's tremendously popular LaserJet line of laser printers depend almost entirely on Canon Inc.'s components (print engines), which in turn use technology developed by Xerox. HP develops the hardware, firmware, and software that convert data into dots for the mechanism to print.
In the 1990s, HP expanded their computer product line, which initially had been targeted at university, research, and business users, to reach consumers. HP also grew through acquisitions. It bought Apollo Computer in 1989 and Convex Computer in 1995.
Later in the decade, HP opened hpshopping.com as an independent subsidiary to sell online, direct to consumers; in 2005, the store was renamed "HP Home & Home Office Store."
From 1995 to 1998, Hewlett-Packard were sponsors of the English football team Tottenham Hotspur.
In 1999, all of the businesses not related to computers, storage, and imaging were spun off from HP to form Agilent Technologies. Agilent's spin-off was the largest initial public offering in the history of Silicon Valley. The spin-off created an $8 billion company with about 30,000 employees, manufacturing scientific instruments, semiconductors, optical networking devices, and electronic test equipment for telecom and wireless R&D and production.
In July 1999, HP appointed Carly Fiorina, formerly of AT&T and Lucent, as the first female CEO of a Fortune-20 company in the Dow Jones Industrial Average. Fiorina received a larger signing offer than any of her predecessors. Fiorina served as CEO during the technology downturn of the early 2000s and led the merger with Compaq that was "disastrous", according to CNN and led to the firing of 30,000 U.S. employees. Under her leadership, the company doubled in size. Her tenure as CEO was beset by damaging leaks. The HP Board of Directors asked Fiorina to step down in 2005 following a boardroom disagreement, and she resigned on February 9, 2005.
Sales to Iran despite sanctions
In 1997, HP sold over $120 million worth of its printers and computer products to Iran through a European subsidiary and a Dubai-based East distributor, despite U.S. export sanctions prohibiting such deals imposed by Bill Clinton's executive orders issued in 1995. The story was initially reported by The Boston Globe, and it triggered an inquiry by the SEC. HP responded that products worth US$120 million were sold in fiscal year 2008 for distribution by way of Redington Gulf, a company based in the Netherlands, and that as these sales took place through a foreign subsidiary, HP had not violated sanctions.
HP named Redington Gulf "Wholesaler of the Year" in 2003, which in turn published a press release stating that "[t]he seeds of the Redington-Hewlett-Packard relationship were sowed six years ago for one market — Iran." At that time, Redington Gulf had only three employees whose sole purpose was to sell HP products to the Iran market. According to former officials who worked on sanctions, HP was using a loophole by routing their sales through a foreign subsidiary. HP ended its relationship with Redington Gulf after the SEC inquiry.
On September 3, 2001, HP announced that an agreement had been reached with Compaq to merge the two companies. In May 2002, after passing a shareholder vote, HP officially merged with Compaq. Prior to this, plans had been in place to consolidate the companies' product teams and product lines.
Compaq had already taken over Digital Equipment Corporation in 1998. HP therefore still offers support for the former Digital Equipment products PDP-11, VAX and AlphaServer.
The merger occurred after a proxy fight with Bill Hewlett's son Walter, who objected to the merger. Compaq itself had bought Tandem Computers in 1997 (which had been started by ex-HP employees), and Digital Equipment Corporation in 1998. Following this strategy, HP became a major player in desktops, laptops, and servers for many different markets. After the merger with Compaq, the new ticker symbol became "HPQ", a combination of the two previous symbols, "HWP" and "CPQ", to show the significance of the alliance and also key letters from the two companies Hewlett-Packard and Compaq (the latter company being famous for its "Q" logo on all of its products).
In 2004, HP released the DV 1000 Series, including the HP Pavilion dv 1658 and 1040 two years later in May 2006, HP began its campaign, "The Computer is Personal Again". The campaign was designed to bring back the fact that the PC is a personal product. The campaign utilized viral marketing, sophisticated visuals and its own website (www.hp.com/personal). Some of the ads featured Pharrell, Petra Nemcova, Mark Burnett, Mark Cuban, Alicia Keys, Jay-Z, Gwen Stefani, and Shaun White.
In January 2005, following years of under performance, which included HP's Compaq merger that fell short, and disappointing earning reports, the board asked Fiorina to resign as chair and chief executive officer of the company. Following the news of Fiorina's departure, HP's stock jumped 6.9 percent. Robert Wayman, chief financial officer of HP, served as interim CEO while the board undertook a formal search for a replacement.
In 2006, HP unveiled several new products including desktops, enhanced notebooks, a workstation and software to manage them, OpenView Client Configuration Manager 2.0. In the same year, HP's share price skyrocketed due to consistent results in the last couple quarters of the year with Hurd's plan to cutback HP's workforce and lower costs.
In July 2007, HP signed a definitive agreement to acquire Opsware in a cash tender deal that values the company at $14.25 per share. This combined Opsware software with the Oracle enterprise IT management software.
In the first few years of Hurd's new role, HP's stock price more than doubled. By the end of Fiscal 2007, HP hit the $100 Billion mark for the first time. The company's annual revenue reached $104 Billion, allowing HP to overtake competitor IBM.
On May 13, 2008, HP and Electronic Data Systems (EDS) announced that they had signed a definitive agreement under which HP would purchase EDS. On June 30, HP announced that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 had expired. "The transaction still requires EDS stockholder approval and regulatory clearance from the European Commission and other non-U.S. jurisdictions and is subject to the satisfaction or waiver of the other closing conditions specified in the merger agreement." The agreement was finalized on August 26, 2008 at $13 billion, and it was publicly announced that EDS would be re-branded "EDS a HP company." The first targeted layoff of 24,600 former EDS workers was announced on September 15, 2008. (The company's 2008 Annual Report gave the number as 24,700, to be completed by end of 2009.) This round was factored into purchase price as a $19.5 billion liability against goodwill. As of September 23, 2009, EDS is known as HP Enterprise Services.
On November 11, 2009, 3Com and Hewlett-Packard announced that Hewlett-Packard would be acquiring 3Com for $2.7 billion in cash. The acquisition is one of the biggest in size among a series of takeovers and acquisitions by technology giants to push their way to become one-stop shops. Since the beginning of the financial crisis in 2007, tech giants have constantly felt the pressure to expand beyond their current market niches. Dell purchased Perot Systems recently to invade into the technology consulting business area previously dominated by IBM. Hewlett-Packard's latest move marked its incursion into enterprise networking gear market dominated by Cisco.
On April 28, 2010, Palm, Inc. and Hewlett-Packard announced that HP would buy Palm for $1.2 billion in cash and debt. Before this announcement, it was rumored that either HTC, Dell, Research in Motion or HP would buy Palm. Adding Palm handsets to the HP product line created some overlap with the iPAQ series of mobile devices but was thought to significantly improve HP's mobile presence as iPAQdevices had not been selling well. Buying Palm gave HP a library of valuable patents, as well as the mobile operating platform known as webOS. On July 1, 2010, the acquisition of Palm was final. The purchase of Palm's webOS began a big gamble – to build HP's own ecosystem. On July 1, 2011, HP launched its first tablet named HP TouchPad, bringing webOS to tablet devices. On September 2, 2010, HP won its bidding war for 3PAR with a $33 a share offer ($2.07 billion) which Dell declined to match. After HP's acquisition of Palm, it phased out the Compaq brand.
On August 6, 2010, CEO Mark Hurd resigned amid controversy and CFO Cathie Lesjak assumed the role of interim CEO. Hurd had turned HP around and was widely regarded as one of Silicon Valley's star CEOs. Under his leadership, HP became the largest computer company in the world when measured by total revenue. Accused of sexual harassment against a colleague, the allegations were deemed baseless. The investigation led to questions concerning between $1000 and $20000 of his private expenses and his lack of disclosure related to the friendship. Some observers have argued that Hurd was innocent, but the board asked for his resignation to avoid negative PR. Public analysis was divided between those who saw it as a commendable tough action by HP in handling expenses irregularities, and those who saw it as an ill-advised, hasty and expensive reaction, in ousting a remarkably capable leader who had turned the business around. At HP, Hurd oversaw a series of acquisitions worth over $20 billion. This allowed the company to expand into services of networking equipment and smartphones. Shares of HP dropped by 8.4% in after-hours trading, hitting a 52-week low with $9 billion in market capitalization shaved off. Larry Ellison publicly attacked HP's board for his ousting, stating that the HP board had "made the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago."
On September 30, 2010, Léo Apotheker was named as HP's new CEO and President. Apotheker's appointment sparked a strong reaction from Oracle chief executive Larry Ellison, who complained that Apotheker had been in charge of SAP when one of its subsidiaries was systematically stealing software from Oracle. SAP accepted that its subsidiary, which has now closed, illegally accessed Oracle intellectual property. Following Hurd's departure, HP was seen by the market as problematic, with margins falling and having failed to redirect and establish itself in major new markets such as cloud and mobile services. Apotheker's strategy was broadly to aim at disposing of hardware and moving into the more profitable software services sector. On August 18, 2011, HP announced that it would strategically exit the smartphone and tablet computer business, focusing on higher-margin "strategic priorities of Cloud, solutions and software with an emphasis on enterprise, commercial and government markets" They also contemplated selling off their personal computer division or spinning it off into a separate company, quitting the 'PC' business, while continuing to sell servers and other equipment to business customers, was a strategy already undertaken by IBM in 2005.
HP's stock continued to drop, by about a further 40% (including 25% on one day, August 19, 2011), after the company abruptly announced a number of decisions: to discontinue its webOS device business (mobile phones and tablet computers), the intent to sell its personal computer division (at the time HP was the largest personal computer manufacturer in the world), and to acquire British big data software firm Autonomy for a 79% premium, seen externally as an "absurdly high" price for a business with known concerns over its accounts. Media analysts described HP's actions as a "botched strategy shift" and a "chaotic" attempt to rapidly reposition HP and enhance earnings that ultimately cost Apotheker his job. The Autonomy acquisition had been objected to even by HP's own CFO.:3–6
On September 22, 2011, the HP Board of Directors fired Apotheker as chief executive, effective immediately, and replaced him with fellow board member and former eBay chief Meg Whitman, with Raymond J. Lane as executive chairman. Though Apotheker served barely ten months, he received over $13 million in compensation. HP lost more than $30 billion in market capitalization during his tenure. Weeks later, HP announced that a review had concluded their PC division was too integrated and critical to business operations, and the company reaffirmed their commitment to the Personal Systems Group. A year later in November 2012 wrote-down almost $9 billion related to the Autonomy acquisition (see below: Takeover of Autonomy), which became the subject of intense litigation as HP accused Autonomy's previous management of fraudulently exaggerating Autonomy's financial position and called in law enforcement and regulators in both countries, and Autonomy's previous management accused HP of "textbook" obfuscation and finger pointing to protect HP's executives from criticism and conceal HP culpability, their prior knowledge of Autonomy's financial position, and gross mismanagement of Autonomy after acquisition.:6
On May 23, 2012, HP announced plans to lay off approximately 27,000 employees, after posting a profit decline of 31% in the second quarter of 2012. The profit decline is on account of the growing popularity of smart phones, tablets, and other mobile devices, that has slowed the sale of personal computers.
On July 10, 2012, HP's Server Monitoring Software was discovered to have a previously unknown security vulnerability. A security warning was given to customers about two vulnerabilities, and a patch released. One month later, HP's official site of training center was hacked and defaced by a Pakistani hacker known to as 'Hitcher' to demonstrate a web vulnerability.
On December 31, 2013, HP revised the amount of jobs cut from 29,000 to 34,000 up to October 2014. The current amount of jobs cut until the end of 2013 was 24,600. At the end of 2013 the company had 317,500 employees. On May 22, 2014 HP announced it would cut a further 11,000 to 16,000 jobs, in addition to the 34,000 announced in 2013. "We are gradually shaping HP into a more nimble, lower-cost, more customer and partner-centric company that can successfully compete across a rapidly changing IT landscape," CEO Meg Whitman said at the time.
In June 2014, during the HP Discover customer event in Las Vegas, Meg Whitman and Martin Fink announced a project for a radically new computer architecture called The Machine. Based on memristors and silicon photonics, The Machine is supposed to come in commercialization before the end of the decade, meanwhile representing 75% of the research activity in HP Labs.
On October 6, 2014, Hewlett-Packard announced it was planning to split into two separate companies, separating its personal computer and printer businesses from its technology services. The split, which was first reported by The Wall Street Journal and confirmed by other media, would result in two publicly traded companies: Hewlett Packard Enterprise and HP Inc. Meg Whitman would serve as chairman of HP Inc. and CEO of Hewlett Packard Enterprise, Patricia Russo would be chairman of the enterprise business, and Dion Weisler would be CEO of HP, Inc.
On October 29, 2014, Hewlett-Packard announced their new Sprout personal computer.
In May 2015, the company announced it would be selling its controlling 51 percent stake in its Chinese data-networking business to Tsinghua Unigroup for a fee of at least $2.4 billion.
On November 1, 2015, as previously announced, Hewlett-Packard changed its name to HP Inc. and spun off Hewlett Packard Enterprise as a new publicly traded company. Because of this, HP Inc. retains Hewlett-Packard's stock price history and its stock ticker symbol, HPQ, while Hewlett Packard Enterprise trades under its own symbol, HPE.
HP's global operations are directed from its headquarters in Palo Alto, California, USA. Its U.S. operations are directed from its facility in unincorporated Harris County, Texas, near Houston. Its Latin America offices are in unincorporated Miami-Dade County, Florida, U.S., near Miami; Its Europe offices are in Meyrin, Switzerland, near Geneva, but it has also a research center in the Paris-Saclay cluster, 20 km south of Paris, France. Its Asia-Pacific offices are in Singapore.
It also has large operations in Leixlip, Ireland; Austin, Texas; Boise, Idaho; Corvallis, Oregon; Fort Collins, Colorado; Roseville, California; Saint Petersburg, Florida; San Diego, California; Tulsa, Oklahoma; Vancouver, Washington; Conway, Arkansas; and Plano, Texas (the former headquarters of EDS, which HP acquired). In the UK, HP is based at a large site in Bracknell, Berkshire with offices in various UK locations, including a landmark office tower in London, 88 Wood Street. Its recent acquisition of 3Com will expand its employee base to Marlborough, Massachusetts. The company also has a large workforce and numerous offices in Bucharest, Romania and at Bangalore, India, to address their back end and IT operations. MphasiS, which is headquartered at Bangalore, also enabled HP to increase their footprint in the city as it was a subsidiary of EDS which the company acquired.
Products and organizational structure
HP produces lines of printers, scanners, digital cameras, calculators, PDAs, servers, workstation computers, and computers for home and small-business use; many of the computers came from the 2002 merger with Compaq. HP as of 2001 promotes itself as supplying not just hardware and software, but also a full range of services to design, implement, and support IT infrastructure.
HP's Imaging and Printing Group (IPG) was described by the company in 2005 as "the leading imaging and printing systems provider in the world for printer hardware, printing supplies and scanning devices, providing solutions across customer segments from individual consumers to small and medium businesses to large enterprises".
Products and technology associated with IPG include:
- Inkjet and LaserJet printers
- consumables and related products
- Officejet all-in-one multifunction printer/scanner/faxes
- Designjet and Scitex Large Format Printers
- Indigo Digital Press
- HP Web Jetadmin printer management software
- HP Output Management suite of software
- LightScribe optical recording technology
- HP Photosmart digital cameras and photo printers
- HP SPaM
- Snapfish by HP, a photo sharing and photo products service.
On December 23, 2008, HP released iPrint Photo for iPhone, a free downloadable software application that allows the printing of 4" x 6" photos.
- business PCs and accessories
- consumer PCs and accessories, (e.g., HP Pavilion, Compaq Presario, VoodooPC)
- handheld computing (e.g., iPAQ Pocket PC)
- digital "connected" entertainment (e.g., HP MediaSmart TVs, HP MediaSmart Servers, HP MediaVaults, DVD+RW drives)
HP resold the Apple iPod until November 2005.
HP Enterprise Business (EB) incorporates HP Technology Services, Enterprise Services (an amalgamation of the former EDS, and what was known as HP Services), HP Enterprise Security Services oversees professional services such as network security, information security and information assurance/ compliancy, HP Software Division, and Enterprise Servers, Storage and Networking Group (ESSN). The Enterprise Servers, Storage and Networking Group (ESSN) oversees "back end" products like storage and servers. HP Networking (former ProCurve) is responsible for the NW family of products. They are a business unit of ESSN.
HP Software Division is the company's enterprise software unit. For years, HP has produced and marketed its brand of enterprise-management software, HP OpenView. From September 2005 HP purchased several software companies as part of a publicized, deliberate strategy to augment its software offerings for large business customers. HP Software sells several categories of software, including:
- business service management software
- application lifecycle management software
- mobile apps
- big data and analytics
- service and portfolio management software
- automation and orchestration software
- enterprise security software
- steering the company's $3.6 billion research and development investment
- fostering the development of the company's global technical community
- leading the company's strategy and corporate development efforts,
- performing worldwide corporate marketing activities
Under the Office of Strategy and Technology comes HP Labs, the research arm of HP. Founded in 1966, HP Labs aims to deliver new technologies and to create business opportunities that go beyond HP's current strategies. Examples of recent HP Labs technology includes the Memory spot chip of 2006. HP IdeaLab further provides a web forum on early-state innovations to encourage open feedback from consumers and the development community.
HP also offers managed services by which they provide complete IT-support solutions for other companies and organizations. Some examples of these include:
- offering "Professional Support" and desktop "Premier Support" for Microsoft in the EMEA marketplace. This is done from the Leixlip campus near Dublin, Sofia and Israel. Support is offered on the line of Microsoft operation systems, Exchange, Sharepoint and some office-applications.
- outsourced services for companies like Bank of Ireland, some UK banks, the U.S. defense forces.
- the computerisation project at Cambridge University Hospitals NHS Foundation Trust.
Staff and culture
The founders developed a management style that came to be known as "The HP Way." In Hewlett's words, the HP Way is "a core ideology ... which includes a deep respect for the individual, a dedication to affordable quality and reliability, a commitment to community responsibility, and a view that the company exists to make technical contributions for the advancement and welfare of humanity." The following are the tenets of The HP Way:
- We have trust and respect for individuals.
- We focus on a high level of achievement and contribution.
- We conduct our business with uncompromising integrity.
- We achieve our common objectives through teamwork.
- We encourage flexibility and innovation.
- Michael Capellas (Compaq CEO/Chairman – HP President)
- Barney Oliver, founder and director of HP laboratories
- Steve Wozniak
- Tom Perkins
- Carly Fiorina, 2016 Republican presidential candidate
- Matt Shaheen, management consultant executive at HP Enterprise Services in Plano, Texas; Republican member of the Texas House of Representatives
- John Schultz (HP Lawyer - Oracle Lawsuit)
Corporate social responsibility
In July 2007, the company announced that it had met its target, set in 2004, to recycle one billion pounds of electronics, toner and ink cartridges. It set a new goal of recycling a further two billion pounds of hardware by the end of 2010. In 2006, the company recovered 187 million pounds of electronics, 73 percent more than its closest competitor.
In September 2009, Newsweek ranked HP No. 1 on its 2009 Green Rankings of America's 500 largest corporations. According to environmentalleader.com, "Hewlett-Packard earned its number one position due to its greenhouse gas (GHG) emission reduction programs, and was the first major IT company to report GHG emissions associated with its supply chain, according to the ranking. In addition, HP has made an effort to remove toxic substances from its products, though Greenpeace has targeted the company for not doing better."
HP took the top spot on Corporate Responsibility Magazine's 100 Best Corporate Citizens List for 2010. The list is cited by PR Week as one of America's most important business rankings. HP beat out other Russell 1000 Index companies because of its leadership in seven categories including environment, climate changes and corporate philanthropy. In 2009, HP was ranked fifth.
Fortune magazine named HP one of the World's Most Admired Companies in 2010, placing it No. 2 in the computer industry and No. 32 overall in its list of the top 50. This year in the computer industry HP was ranked No. 1 in social responsibility, long-term investment, global competitiveness, and use of corporate assets.
In May 2011, HP released a Global Responsibility report covering accomplishments during 2010. The report, the company's tenth, provides a comprehensive view of HP's global citizenship programs, performance, and goals and describes how HP uses its technology, influence, and expertise to make a positive impact on the world. The company's 2009 report won best corporate responsibility report of the year. The 2009 reports claims HP decreased its total energy use by 9 percent compared with 2008. HP recovered a total of 118,000 tonnes of electronic products and supplies for recycling in 2009, including 61 million print cartridges.
In an April 2010 San Francisco Chronicle article, HP was one of 12 companies commended for "designing products to be safe from the start, following the principles of green chemistry." The commendations came from Environment California, an environmental advocacy group, who praised select companies in the Golden State and the Bay Area for their efforts to keep our planet clean and green.
In May 2010, HP was named one of the World's Most Ethical Companies by Ethisphere Institute. This is the second year in a row HP has made the list. Ethisphere reviewed, researched and analyzed thousands of nominations in more than 100 countries and 35 industries to create the 2010 list. HP was one of only 100 companies to earn the distinction of top winner and was the only computer hardware vendor to be recognized. Ethisphere honors firms that promote ethical business standards and practices by going beyond legal minimums, introducing innovative ideas that benefit the public.
HP is listed in Greenpeace's Guide to Greener Electronics that ranks electronics manufacturers according to their policies on sustainability, energy and climate and green products. In November 2011, HP secured the 1st place (out of 15) in this ranking (climbing up 3 places) with an increased score of 5.9 (up from 5.5). It scored most points on the new Sustainable Operations criteria, having the best program for measuring and reducing emissions of greenhouse gases from its suppliers and scoring maximum points for its thorough paper procurement policy. In the November 2012 report, HP was ranked second, with a score of 5.7.
HP does especially well for its disclosure of externally verified greenhouse gas emissions and its setting of targets for reducing them. However, Greenpeace reports that HP risks a penalty point in future editions due to the fact that it is a member of trade associations that have commented against energy efficiency standards.
HP has earned recognition of its work in the area of data privacy and security. In 2010 the company ranked No. 4 in the Ponemon Institute's annual study of the most trusted companies for privacy. Since 2006, HP has worked directly with the U.S. Congress, the Federal Trade Commission (FTC), and the Department of Commerce to establish a new strategy for federal legislation. HP played a key role in work toward the December 2010 FTC report "Protecting Consumer Privacy in an Era of Rapid Change."
After winning nine straight annual "Most Respected Company in China" awards from the Economic Observer and Peking University, HP China has added the "10 Year Contribution" award to its list of accolades. The award aims to identify companies doing business in China with outstanding and sustained performance in business operations, development and corporate social responsibility.
HP has many sponsorships. One well known sponsorship is Mission: SPACE in Epcot at the Walt Disney World Resort. From 1995 to 1999, and again from 2013, HP has been the shirt sponsor of Premier League club Tottenham Hotspur F.C. From 1997 to 1999 they were sponsors of Australian Football League club North Melbourne Football Club. They also sponsored the BMW Williams Formula 1 team until 2005 (a sponsorship formerly held by Compaq), and as of 2010 sponsor Renault F1. Hewlett-Packard also had the naming rights arrangement for the HP Pavilion at San Jose, home of the San Jose Sharks NHL hockey team until 2013, in which the arena's naming rights were acquired by SAP AG, renaming the arena to the SAP Center at San Jose. The company also maintains a number of corporate sponsorships in the business sector, including sponsorships of trade organisations including Fespa (print trade exhibitions), and O'Reilly Media's Velocity (web development) conference.
After the acquisition of Compaq in 2002, HP has maintained the "Compaq Presario" brand on low-end home desktops and laptops, the "HP Compaq" brand on business desktops and laptops, and the "HP ProLiant" brand on Intel-architecture servers. (The "HP Pavilion" brand is used on home entertainment laptops and all home desktops.)
In March 2003, HP restated its first-quarter cash flow from operations, reducing it 18 percent because of an accounting error. Actual cash flow from operations was $647 million, not $791 million as reported earlier. HP shifted $144 million to net cash used in investing activities.
On September 5, 2006, Shawn Cabalfin and David O'Neil of Newsweek wrote that HP's general counsel, at the behest of chairwoman Patricia Dunn, contracted a team of independent security experts to investigate board members and several journalists in order to identify the source of an information leak. In turn, those security experts recruited private investigators who used a spying technique known as pretexting. The pretexting involved investigators impersonating HP board members and nine journalists (including reporters for CNET, The New York Times and The Wall Street Journal) in order to obtain their phone records. The information leaked related to HP's long-term strategy and was published as part of a CNET article in January 2006. Most HP employees accused of criminal acts have since been acquitted.
In November 2007, Hewlett-Packard released a BIOS update covering a wide range of laptops with the intent to speed up the computer fan as well as have it run constantly, whether the computer was on or off. The reason was to prevent the overheating of defective Nvidia graphics processing units (GPUs) that had been shipped to many of the original equipment manufacturers, including Hewlett-Packard, Dell, and Apple. The defect concerned the new packaging material used by Nvidia from 2007 onwards in joining the graphics chip onto the motherboard, which did not perform well under thermal cycling and was prone to develop stress cracks – effectively severing the connection between the GPU and the motherboard, leading to a blank screen. In July 2008, HP issued an extension to the initial one-year warranty to replace the motherboards of selected models. However this option was not extended to all models with the defective Nvidia chipsets despite research showing that these computers were also affected by the fault. Furthermore, the replacement of the motherboard was a temporary fix, since the fault was inherent in all units of the affected models from the point of manufacture, including the replacement motherboards offered by HP as a free 'repair'. Since this point, several websites have been documenting the issue, most notably www.hplies.com, a forum dedicated to what they refer to as Hewlett-Packard's "multi-million dollar cover up" of the issue, and www.nvidiadefect.com, which details the specifics of the fault and offers advice to the owners of affected computers. There have been several small-claims lawsuits filed in several states, as well as suits filed in other countries. Hewlett-Packard also faced a class-action lawsuit in 2009 over its i7 processor computers. The complainants stated that their systems locked up within 30 minutes of powering on, consistently. Even after being replaced with newer i7 systems, the lockups continued.
Lawsuit against Oracle
On June 15, 2011, HP filed a lawsuit in California Superior Court in Santa Clara, claiming that Oracle Corporation had breached an agreement to support the Itanium microprocessor used in HP's high-end enterprise servers. On June 15, 2011, HP sent a "formal legal demand" letter to Oracle in an attempt to force the world's No. 3 software maker to reverse its decision to discontinue software development on Intel Itanium microprocessor and build its own servers. HP won the lawsuit in 2012, requiring Oracle to continue to produce software compatible with the Itanium processor. HP was awarded $3 billion in damages against Oracle on June 30, 2016. HP argued Oracle's canceling support damaged HP Itanium server brand. Oracle has announced it will appeal both the decision and damages.
Takeover of Autonomy
In November 2012, HP recorded a writedown of around $8.8 billion related to its acquisition a year earlier of the UK based Autonomy Corporation PLC. HP accused Autonomy of deliberately inflating the value of the company prior to its takeover. The former management team of Autonomy flatly rejected the charge.
Autonomy specialized in analysis of large scale unstructured "big data", and by 2010 was the UK's largest and most successful software business. It maintained an aggressively entrepreneurial marketing approach, and controls described as a "rod of iron", which was said to include zero tolerance and firing the weakest 5% of its sales force each quarter, while compensating the best sales staff "like rock stars".
At the time, HP had fired its previous CEO for expenses irregularities a year before, and appointed Léo Apotheker as CEO and President. HP was seen as problematic by the market, with margins falling and having failed to redirect and establish itself in major new markets such as cloud and mobile services. Apotheker's strategy was to aim at disposing of hardware and moving into the more profitable software services sector.
As part of this strategy, Autonomy was acquired by HP in October 2011. HP paid $10.3 billion for 87.3% of the shares, valuing Autonomy at around $11.7 billion (£7.4 billion) overall, a premium of around 79% over market price. The deal was widely criticized as "absurdly high", a "botched strategy shift" and a "chaotic" attempt to rapidly reposition HP and enhance earnings, and had been objected to even by HP's own CFO.:3–6 Within a year, Apotheker himself had been fired, major culture clashes became apparent and HP had written off $8.8 billion of Autonomy's value.
HP claim this resulted from "accounting improprieties, misrepresentations and disclosure failures" by the previous management, who in turn accuse HP of a "textbook example of defensive stalling":6 to conceal evidence of its own prior knowledge and gross mismanagement and undermining of the company, noting public awareness since 2009 of its financial reporting issues:3 and that even HP's CFO disagreed with the price paid.:3–6 External observers generally state that only a small part of the write-off appears to be due to accounting mis-statements, and that HP had overpaid for businesses previously.
The Serious Fraud Office (United Kingdom), and the U.S. Securities and Exchange Commission joined the FBI in investigating the potential anomalies. HP incurred much damage with its stock falling to decades' low. Three lawsuits were brought by shareholders against HP, for the fall in value of HP shares. In August 2014 a United States district court judge threw out a proposed settlement, which Autonomy's previous management had argued would be collusive and intended to divert scrutiny of HP's own responsibility and knowledge, by essentially engaging the plaintiff's attorneys from the existing cases and redirecting them against the previous Autonomy vendors and management, for a fee of up to $48 million, with plaintiffs agreeing to end any claims against HP's management and similarly redirect those claims against the previous Autonomy vendors and management. In January 2015 the SFO closed its investigation as the likelihood of a successful prosecution was low. The dispute is still being litigated in the US, and is being investigated by the UK and Ireland Financial Reporting Council. On June 9, 2015, HP agreed to pay $100 million to investors who bought HP shares between August 19, 2011, and November 20, 2012 to settle the suite over Autonomy purchase.
On October 25, 2012, Richard Falk, the Human Rights Council's Special Rapporteur on the situation of human rights in the Palestinian territories occupied since 1967, called for boycotting HP together with other "businesses that are profiting from Israeli settlements on occupied Palestinian lands until they brought their operations in line with international human rights and humanitarian law". In 2014, the Presbyterian Church voted to move forward with divestment from HP "in protest of Israeli policies toward Palestinians". In 2015, the City of Portland's Human Rights Commission requested to place Caterpillar, G4S, Hewlett-Packard, and Motorola Solutions on the City's "Do Not Buy" list.
On April 9, 2014, an administrative proceeding before Securities and Exchange Commission was settled by HP consenting to an order acknowledging that HP had violated the Foreign Corrupt Practices Act (FCPA) when HP subsidiaries in Russia, Poland, and Mexico made improper payments to government officials to obtain or retain lucrative public contracts.
The SEC's order finds that HP's subsidiary in Russia paid more than $2 million through agents and various shell companies to a Russian government official to retain a multimillion-dollar contract with the federal prosecutor's office. In Poland, HP's subsidiary provided gifts and cash bribes worth more than $600,000 to a Polish government official to obtain contracts with the national police agency. And as part of its bid to win a software sale to Mexico's state-owned petroleum company, HP's subsidiary in Mexico paid more than $1 million in inflated commissions to a consultant with close ties to company officials, and money was funneled to one of those officials. HP agreed to pay $108 million to settle the SEC charges and a parallel criminal case.
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