HP corporate shuffling unites products, services

FRAMINGHAM (12/15/2003) - Hewlett-Packard Co. (HP) last week announced a corporate restructuring, merging its enterprise hardware and software unit with its services group to form one division called the Technology Solutions Group.

The move is intended to unify HP's sales teams in their approach to large corporate accounts, CEO Carly Fiorina said during an HP meeting with financial analysts in New York. The changes began in June and will be finalized in mid-2004, she said. HP plans to continue breaking hardware, software and services revenue out separately in its financial reports.

"We don't expect undue disruption. This has been part of the path we've been on for some time," Fiorina said.

Ronald Evans, head of the 94,000-member Interex HP user group in Sunnyvale, Calif., said combining the services and product groups should improve customer support.

"It can't but help in providing better communications with the customers," Evans said. "You are putting all the systems, software and services at their disposal through one operation."

In a memo to HP employees last week, Fiorina detailed the management changes, which include putting Ann Livermore, who heads the services division, in charge of the new business group. Peter Blackmore, who headed the enterprise systems division, will manage sales. In her memo, Fiorina said the change is a "more holistic grouping that allows us to simplify our management structure."

Evans praised Livermore as having a "very good level of experience in making organizations pull together."

Analysts said the restructuring may make HP staff more likely to recommend HP products over those of third parties. It "will certainly have a strong tendency to make the services more HP product-centric," said Gordon Haff, an analyst at Illuminata Inc.

HP made the announcement a day after saying it would merge its global operations and IT divisions. Longtime HP employee Gilles Bouchard will run that group and assume the title of CIO.

Fiorina cast that IT consolidation as a sign of the company practicing what it preaches.

"We're combining our global operations and our IT functions because we know that driving process improvements and IT together is the way to continue to make the most rapid progress," she said. 43524

Cowley writes for the IDG News Service.

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