CEO Apotheker seeks to save HP's 'lost soul'

CEO since Nov. 1, Apotheker is breaking with Hurd's legacy in other ways. He's overhauling HP's $41 billion personal-computer division and says he will use acquisitions to expand in the software market, dominated by rivals just as Oracle Corp. and IBM Corp. Apotheker is reversing Hurd's emphasis on cost-cutting in a bid to improve product quality and spur homegrown innovation, and he's touring HP's offices to find ways to get products to market more quickly.

Apotheker, 57, resigned as CEO of German software maker SAP AG in February 2010 amid falling sales, clashes with unions over job cuts and a price increase that vexed clients. He takes the helm of a company facing slowing revenue growth and accelerating competition in cloud computing, a fast-growing area of research that delivers software and storage via the Internet.

The company said inaccurate expense reports filed

Hurd resigned afterwards the company said inaccurate expense reports filed by him or on his behalf concealed a personal relationship with a contractor, in violation of HP's standards of business conduct.

"I happen to know something about software," said Apotheker, who spent more than 20 years at SAP, the world's largest maker of business-application programs.

Apotheker says he as well wants to make better use of WebOS, the computer-operating system acquired last year when Hewlett-Packard purchased smart-phone maker Palm Inc. for $1.2 billion. Starting at once year, every one of the PCs shipped by HP will include the ability to run WebOS just in case to Microsoft Corp.'s Windows, Apotheker said.

The move is aimed at enticing software developers to create a wider range of applications that would differentiate Hewlett-Packard PCs, printers, tablets and phones from those sold by rivals.

Programmers have built more than 350,000 apps for devices made by Apple Inc. and more than 250,000 for Google Inc.'s Android Market. WebOS has 6,000 apps, according to HP.

"Their Achilles' heel is software," said Brian Marshall, an analyst at Gleacher & Co. in San Francisco, who has a "buy" rating on HP shares. Hewlett-Packard gets 70 percent of sales from computers, storage, networking and printers; 27 percent from providing information-innovation services; and 2.2 percent from software.

German-born Jew whose Polish parents fled the Nazis

A German-born Jew whose Polish parents fled the Nazis, Apotheker went on to run SAP, one of Germany's largest companies. At HP, he inherits an icon of American business, begun in a garage in Palo Alto by William Hewlett and David Packard, who used $538 in working capital, including a used drill press from Sears-Roebuck.

Under Hurd's cost-cutting, morale flagged during the pace of competition accelerated. HP expanded into networking equipment - and onto Cisco Systems Inc.'s turf - through its $2.7 billion acquisition of 3Com Inc. last year. It's vying against Apple in smart phones afterwards its 2010 purchase of Palm. HP must as well contend with Oracle, which entered the hardware arena through its Sun Microsystems purchase last year and hired Hurd as a president a month afterwards he left HP.