Thoughts on Apotheker, and why we're potentially concerned | webOS Nation

Thoughts on Apotheker, and why we're potentially concerned 76

by Derek Kessler Sat, 02 Oct 2010 10:12 am EDT

Leo Apotheker, HP Léo Apotheker is the new CEO of HP, or at least will be in short order, and it’s a choice we don’t think anybody predicted. He certainly wasn't on our radar. HP’s board says that Apotheker was the first and only person they offered the job, and according to recent SEC filings, he’s going to be making some serious money ($1.2 million annual salary, $4 million signing bonus, $4.6 million for moving expenses (buh?), and incentive bonuses ranging from 200%-500% of his salary). But just where did he come from, and what does his arrival at HP mean, especially for our favorite little business unit: Palm?

Apotheker is coming to HP off a short stint as CEO of German software monolith SAP. SAP is an enterprise software company, which as Sascha Segan of PC Magazine put it, sells “hideously boring but profitable enterprise software.” Apotheker spent twenty years at SAP, serving as “co-CEO” in 2008, before being elevated to CEO in May 2009. His reign at the top of SAP was not for long, as in February of 2010, the SAP board and Apotheker reached an agreement that saw him leaving the CEO position, the SAP board, and SAP as a company.

Now, you might be thinking, “only seven months and they already forced him to resign?” We were thinking that too, but that’s not what has as most worried. HP is a strong and seriously profitable company - if it turns out that the first and only choice for CEO is a dud, HP will be able to move on to somebody else without skipping a beat. And from what we can deduce from SAP’s carefully worded press releases over the years, Apotheker was dumped into a mess of a company when he took over as singular CEO. Shareholders demanded action, ignoring the fact that every company on the planet was suffering in February of 2010, and so he became the sacrificial lamb to the poor economy.

Here’s what has us concerned: Apotheker is a software guy. Not just a software guy, an enterprise software guy. His focus is selling complicated and expensive software solutions with serious regard to function, but little regard to form, to large firms. Divisions like printers and personal computers and handheld devices (i.e. Palm) have not factored into his management experience.

Apotheker’s words about what he plans to do at HP have been limited to meaningless “It’s a great privilege to run this company” CEO-speak. Of course he’s excited - HP is a big jump up from SAP and unemployment (not that he couldn’t have lived comfortably in perpetual retirement). We really have nothing to go on to predict how his tenure as CEO will go, except to look at his history elsewhere, and that’s what worries us.

HP is a massive company with some 300,000 employees making servers, software, personal computers, flexible displays, smartphones, printers, and everything in between. It’s a huge undertaking for anybody, but to hire a CEO with a specialty in one area strikes us as potentially foolish. We know that enterprise software is a ridiculously profitable division of HP, and we know that shifting to an enterprise-driven focus is what saved IBM a few years back.

But HP is not IBM. The latter company was hurtling towards collapse, struggling to carry along the dead weight of their hardware divisions. Shedding those and refocusing brought IBM back from the brink. HP is in no such situation. In fact, HP is the number one computer seller in the world, with nearly 20% of global units. HP also dominates the world of printers, claiming some 37% of that market. HP’s leverage all of their assets to become the world’s largest technology company, and quarterly profits approaching $2 billion on more than $30 billion in revenue would stand to back that up.

HP passed over a number of fantastic internal candidates before picking Apotheker. We don’t need to list the names (Todd Bradley, Phil McKinney) to know that there’s a lot of talent at the top of HP. And that’s talent that’s going to be at Léo Apotheker’s back, but in the end the decisions will be his. Does he have what it takes to run a multi-faceted monolith of a company like HP? We certainly hope so.

Source: PC Magazine, HP, SEC, Wall Street Journal



I hope so. I don't want an ipaq with enterprise os. I want a pre with webos.

I see your concern. And share it.

The parallels with IBM are fair, but not directly comparable. IBM struggled as a manufacturer. They liked to make a lot of stuff on their own. HP, they prefer to contract out the build-ups, let other companies figure out the efficiencies and bring them quality at an unbeatable price. HP and Compaq are a couple of reasons why IBM decided to narrow down their mix to Software. They've always been strong and aggressive on hardware.

Remember all the "waves" of IBM hardware offers? PCs, PS2's, PS1, et al. Each time one would end, they's announce intentions to focus on other parts of the market. Then a year later, they were back to try again and again. IBM could never combine profits with market domination on the consumer side. then light office equipment struggled, then infrastructure...then they finally decided, they had less compatitors on the software side and put their leverage there. And for them, it worked great.

HP is much more aggressive in vertical and horizontal integration. Cameras, mp3 plays, phones, calculators...if nothing less, it's a channel to deliver their software and other services. It will be a while before HP decides to hop out of the hardware side, if ever. And, they'll likely spin stuff off, like Thinkpads/Lenovo.

sometimes you have to scratch your head regarding the choices large companies make in leaders and direction. This is one of those times. Hey Leo, don't go messing up webOS (HPalm)!

A CEO is only as good as the people he surrounds himself with.

Excuse me while I award one of my rare +1s.



Does that mean Ruby is as good as gone?

I was going to make this point too. I have seen both sides of this (success and failure) and both can be ugly at times. People get kicked out of positions that everyone thought they owned when new CEOs come in. The big danger is if we start to see Leo bring in a bunch of SAP folks to help manage. That starts to create an "us vs. them" situation and rarely works out well.

Well no reason to panic yet. Companies like HP have headguys for every sector they have so even if Aphoteker doesnt know squat about mobile devices or software he just needs to be reasonable enough to listen to ga uy in charge for mobile develpment in HP.
Problem could arrive if there is some need for cost cutting measures and Aphoteker is not emotionaly attached to HP mobile devices department and cuts it off without thinking twice.

"Problem could arrive if there is some need for cost cutting measures and Aphoteker is not emotionaly attached to HP mobile devices department and cuts it off without thinking twice."

thats pointless, he's not "emotionally" attached to any of HPs departments

He is German, like myself. What are those emotions you speak off?

..they are a Weakness

Lets not get back into the CEO = King of the HP world stuff. Corporations are driven by their Board of Directors. The CEO can make recommendations. And whatever they decide to do, he will put a public face on the action. He'll need to be there a while, and prove himself, before the BOD let's him start dismantling all the stuff they've been spending money on.

CEO typically runs day to day operation while BOD sets long term objectives/goals.

Emotionaly being that believes in some product and wants it to succseed so bad that its not first on a list of being cut. Everyone has those even if they are CEOs.

I worked with Europeans before and are very organized and respect and listen to the different divisions chiefs and like to take decisions with all them together. I don

Hmm, the Europeans with whom I have worked were lying, back-stabbing, loyalty-deficient, Eurotrash. I guess they are not all the same. I would not recommend projecting any qualities - good or bad - on Apotheker.

I just hope webos doesnt torment under this man

why should it?

It's innovative software with great potential for enterprise as well as consumer. If anything, he's gonna spend Monday night soaking in a tub full of nicely warmed, fresh WebOS in his CEO office bath suite.

As long as Plam comes up with Great Hardware and can integrate with whatever software solutions New Hp can come up with palm will be fine. But if they are not successful who knows how long New Hp will support them before they give palm the axe :(

Atlest with Hurd I think he would have keep then atlest 5-6 years before they made money. New guy might only give them 2-3 years :(

The RIM Playbook is what scares me, its basically a complete ripoff of Webos

hopefully hp/palm have patents on webos

of course Palm has patents on WebOS. The Playbook is just CGI graphics right now..totally fake demo. I'd be surprised if that shipped on time..

Full disclaimer, I am German but I am not working for SAP.

I think he is a good choice BECAUSE he is a software guy! HPs is great in making hardware. But there software is bad.

The bought WebOS to change that. Everyone jokes about WebOS on a printer but that is HPs issue, Great printer, horrible software.

That is why they went with a software guy. I was never worried that HP could create great hardware for the Pre 3 (since the Pre 2 will still be all Palm) but I was worried that the focus on the software would be less. (See Nokia...)

Really, the iPhone never had hardware that was so great but software that took advantage of the hardware. (First iPhone was only 2G, horrible cam, lousy battery life)

So all in all, what HP needs is to be less of a hardware company and more of a software company that makes hardware. And that is the reason Leo is the new CEO.... And of course the guy from Apple said no.



A guy like this would fit right in melding all these new companies that HP recently purchased.

Yes, he is a software guy. The problem is he's a SAP software guy. The utterly crappy unintuitive, bloated mess that is HP software probably looks like home to him.

This is not what we want for WebOS.

he was not responsible for making money, not developing software. sap is worth several billions, so what's your point again?

The same will be true at HP. His responsibility will be to make money, not make people happy. He'll push the same crap that HP is already making money off of, rather than try to make something great for users. People may like the printer hardware, but they generally hate the software on it. Why should he care as long as they are making cash. Get the point yet?

so you think they give away services, smartphones and tablets running webOS for free?

What? No. When did I ever say that? The point was he has little incentive to improve WebOS for the end user. He's used to selling crappy UI software.

He's probably good for HP's shareholders, but I have very high doubts he's any good for those of us who actually like WebOS and want to see it improved.

The good news is that he apparently has no HW expertise to bring to the table so won't muck up current plans for Palm device/s? Also may apply to consumer vs enterprise smartphone mkt & He may do some good as HPalm looks @ & markets smartphones to enterprise. So for now we sit and wait ( yet again), to see what happens. Man waiting for the future to arrive really Sucks!

I'm noticing the more I read the articles on this site, the more I see a gloom and doom tone. For every decision that is made in reference to webos the first is always a negative article. Then another article comes out wondering why people are so down on webos. This is the only site that I read that has such a onesided if it's not now than it's never attitude. The general public doesn't care about webos, andriod, or ios, or any other mobile software. Only us geeks and nerds on this site. The general public cares about apps and hardware and pretty formfactor. So while everyone is saying it's over it only takes one good device to change the tide of perception. Just like most of ya'll loyal Palmist who are, have, and will jump ship. It's because most people of sheeps to trends and will follow what's hot. So keep your demands. HP is a multi-billion dollar company that will move at their own pace. They aren't hurting for your mobile business. So you have to options wait or leave. If you leave and go apple or android it's ok. HP will still be here. And when and if they make the next hot phone the masses will come. Not just because of the os but because it is the it device.

"I'm noticing the more I read the articles on this site, the more I see a gloom and doom tone."

That's just Downer Derek. He has NO CLUE how to focus on the positive.

He can't even just say, in a neutral way, "Here are the new apps for the day..." It's more like, "Jeezy Kreezy, this is quite the showering of negative one apps today. Let's just not think about promoting this OS any further."

Unfortunately, everybody who reads the P|C front page is affected by his gloom and doom tone. Utterly depressing.

I don't understand who he doesn't try to get moved over to since he loves Apple so much. . . .

1) I do not love Apple. I love my MacBook Pro, but I cannot see a world where I move to Apple's walled iOS garden. I love Palm, but sometimes it's got to be tough love.

2) I can focus on the positive... if it's there.

3) "Here are the new apps" gets old after a while. Commentary, friend.

Tough Love on the front page of the largest webOS Fan site, does more harm than good. Other than for the Tea Party, negativity will just push people away. If we want to read how Palm or HP sux we can go to competing sites. Plus it never seems to be balanced, try adding a paragraph arguing against your points and maybe that piece of you that says it loves webOS will shine through and leave us with a good read.

Pretending that things on this side of the game are even remotely okay would just be dishonest.

I know a lot of you like to maintain your deep denial but in the real world, WebOS is not doing very well by any standard.

Pretending that it should be otherwise is even more dishonest.
How long has HP owned Palm?
In the real world no company can, acquire a company then squat and poop out a #1 selling piece of hardware that will displace the competition in a matter of months.
It will take a long while before the 80 percent of cell phone users in the world that do not have a smart-phone give a hoot. We're talking a battle of at least a decade. Picking a winner now is naive. Plus the market of billions ensures many winners. Had Palm not been bought out, then and only then could they have been considered out of the game.

Hate to break it to you, but this isn't a fan site. It's a news, opinion, reviews, and discussion website. We talk about Palm, good and bad, and do so as truthfully and knowledgeably as we can. If that means that we post some articles that aren't all roses, then that's what we'll do.
Yes, PreCentral is by far the largest, most active, and most vibrant Palm community out there, but we aren't going to pander to the fanbase just so I can stop being called Downer Derek. We got where we are by calling it how it is, and that is not going to stop any time soon.
If you disagree with our assessments, that's great. Head to the comments and voice your opinion. That's why they're there. Instead of proclaiming your desire for me to be less negative or more purple or whatever it is that you want, tell me how I'm wrong, tell me what the side you wish I'd taken is.

But Derek, some people cant handle the truth. Need to set up

Only good news and sunny days there for grndslm

Well put, Derek.

That was a sloppy attempt to insert your political views and demonstrate how much you hate liberty.

As a Faux News supporter, you should have been attracted to his idea about Derek reporting "fair & balanced" news.

PC Mag wrote a negative article about Apotheker yesterday. Then they wrote a positive article about him today.

Lemme guess that Derek's gonna write a new article tomorrow and tell the webOS community how "we" potentially feel good about Apotheker at that point in time!


2) OK! hahahaha.
3) The point is that perhaps you should take a couple days break before showing the apps if need be. Better that than being condescending in half of them! Make a performance like Steve Jobs would is the only advice I can offer you. And throw in some screenshots or something.

Also, Derek...

Please do not tell the webOS community when they are concerned.

If you want to say you're concerned about the new CEO, then say that. What council meeting did you go to in order to judge how we all were feeling?

There's just something that your words do to my feelings that is very disturbing.

We, as in the PreCentral staff. I do not presume to write for the community, even if my opinions do often mirror their thoughts.

Oh Derek, please sugarcoat you feelings so everyone else can call you a fannyboy, or wait, post your opinion and get roasted for negativity. Where is the middle?

I enjoy your (Derek) insightful articles and look forward to them each day I pass through PreCentral.

well said, cmeans90

I wouldn't be super worried. I'm quite sure Leo sees the value in webOS and mobile computing. For a company as large as HP the CEO's job is more to just keep the disparate divisions moving in the same direction (basically think big picture), so his affiliation with any particular segment is not that critical. That said, where he could be a boon is his experience in selling to European customers. His contact list could be a major help to HP/Palm.


The next focus in HP is the cloud. To be there and to dominate HP has already has many of the tools in place, however, software IP is not quite in a position of strength as hardware. This move allows Bradley, Livermore, Donatelli, etc. to keep on managing their business like CEO's. It also allows Apotheker to do deals in software to improve that part of the company so it can win in the cloud.

What you and nobody else is talking about is the part where Ray Lane is Chairman. Kliner Perkins is widely viewed as one of the top VC's in Silicon Valley and no doubt that Lane knows technology and has a lot of entries in his rolodex. Add that to Apotheker

I agree, I think they hired him to help their Euro Market...

We'll see though, as long as he doesn't fuck with palm/webos in a negative way, then I'll be happy, just follow the plans double down on them and watch webos take over!

I think i read that he was a sales focused guy a SAP, so he probably has connections and can push HP in the euro market

Different corporations put their CEOs in different roles. Steve Jobs is obviously super hands on, controlling and manipulative. HP's previous CEO barely seemed to know what was going on with Palm, it was the executives under him who seem to do most of the legworking on projects with Hurd being more of a mouthpiece. I'm sure that HP recognized the success they had with this approach and kept that in mind with their new hire.

I'm not concerned in the least.

I hope one day soon Palm can buy themselves back from HP.

Why? Because they were doing so well before HP bought them? HP is the #1 pc maker...ya think they know how to market devices?

Fact is, you guys moan and groan about new devices from HP...but if HP didn't buy Palm, there DEFINITELY would be no new devices. Palm barely had a pulse when HP bought them.

The sad truth I have learned is "enterprise" applications like SAP, Oracle, and others, are NOT purchased based on quality. Good sales does not equal good product.

This guy has probably never touched a webOS device in his life. Hopefully the Pre 2 (or whatever) is too far along in its development that this shylock won't have an affect on it. HP needed a visionary leader with technical skills who has an deep knowledge of HP and its divisions. What they got was an outsider who knows nothing about hardware or consumer software with no allegiance to HP whatsoever. He soon will know about every HP Labs project both past and present and 7 months from now so will the company he moves on to.

I think he's a great choice. Consider that HP has recently spent more than 10 billion - with a "B" - dollars buying.... wait for it.... software firms (and don't kid yourself; HP didn't buy Palm for it's hardware). Hardware is a commodity; it's the software that creates the ecosystem the hardware lives in, and what ultimately brings in the margins.

Here's a few more opinion pieces:

Full disclosure: I'm part German too. You haf a problem vis dis? Vat are you, French?

(BTW, many years ago, there was a hilarious piece floating around the Internet about the Germans agreeing to make English the official language of the EU, if only they'd make a few 'very logical' changes - which, of course, ended up making English almost 100% German. If anyone can point me to a copy of it, I'd be grateful!)

I think this may be what you're referring to:

I do find it funny.

Here's something to counter-balance:

It's a long read, but funny as well.

Yes, that's it - thanks! And for the mark Twain piece, to - I'd heard about it, but never seen it. A great diversion for a dull Saturday afternoon in the office!

This community has a glass half empty, no, make that broken glass shards in our hand mentality.
It stems from years of practice being abused by Palm in the Treo years seeing our devices superceded by everyone else.
There hasn't been a change since and including the acquisition by HP that didn't have the majority here foretelling doom and gloom.
Each and every time, the arm chair CEOs of billion dollar compainies are proven wrong. Other than Oracle's Ellison who obviously has his own agenda and not HP's interest at heart, who here knows what they are talking about?
I haven't seen a comparison of this new guy's experience with smart phones vs. M. Hurds' which this communty hated as well.
I guess my rant can be summed like this:
On Monday imagine this new guy makes a press conference and says : "We're shutting down all other divisions to concentrate solely on Palm smartphones."
This site would probably have most people criticizing his accent backed up by a front page article with a poll asking if we trust bald people as CEOs.
The funny thing is we have all been given the 10 year plan by Ruby mentioning 2 yr refresh rates. Now that HP is involved this has been /will be accelerated.
It's All Good. Of course I backed BetaMax, Amiga, and ReplayTV, so I don't know what I'm talking about either.

Many of you still look at Palm as a small company. HP is huge company that does pretty much everything in IT. Yes L

+1 If the hardware visionaries started leaving, I'd be concerned. McKinny, Bradley, Sood, if these guys show up elsewhere, then that's a sign they dont see the support for the future they envision.

Remember when Rubi announced they'd "retained" Goldman Sachs, I said to expect the brain drain we got. When these guys can't see their own future clearly, they get up and move on.

Something that needs to be mentioned, enterprise software for tablets and smartphones is something that few other platforms really stand to offer. WebOS already seems to be adding things like integrated VPN and other niceties. As blackberry seems focused on getting more consumers, perhaps Palm being focused on more business customers would be a good niche for Palm.

I think this piece was unnecessarily harsh at a personal level and seems to do nothing more than encourage similar ramblings.

So, rather than framing a negative opinion piece on Alotheker, I feel a more worthwhile effort might be an informational piece on what led to his selection as the CEO and what the implications are on the future of Palm as an HP subsidiary and webOS as mobile platform.

Precentral: "this guy hasn't made any comments about new hardware (Bradley, McKinney), so we don't like him!"

lol u mad

To me that just means that Bradley (and by extension Ruby) will have leave from Mr newCEO to rule their fiefdom as they see fit, as long as they turn a profit. Namely Mr newCEO will not thrust himself into something he doesn't really have a clue about.

HP has a bigger problem to worry about and that is Oracle (that when combined with the Sun hardware/services) is a bigger threat to profitability. Let's face it, hardware is commodity and there's no money to be there (that's why bill@msft decided to focus on software back in the 80s) so being the best seller of commodity hardware (oh yeah HP Superdome etc ho-hum booring, long-distant third/also-ran) doesn't really save the day for HP.

I'm seeing exactly the opposite of the conclusins reached and precisely for the reasons given. *shrug* Only time will tell.

Uhhhh who gives a shit? Theres not going to be any Palm left when the dust has settled. Its going to be iphone, android, and RIM. Palm is done, and in hindsight they were DOA. Time to join the winning team.

Warning, long-winded screed approaching...

I think this is exactly what needs to happen.

All of the legacy hardware vendors (Sun/Oracle, IBM, HP) are still mired in the legacy hardware business models from the 50s and 60s. Sell some hardware units, enjoy a perpetual revenue stream from services and support, and employ old-school protectionist tactics to keep a chokehold on your market share.

HP acquired plenty of software companies (Mercury, SPI, Palm, ArcSight, etc), and one significant services player (EDS), and yet for all the perception that HP is a monolithic presence in the technology scene they remain after all these years of M&A less of a single behemoth and more of a hundred semi-autonomous business units who all happen to be marching more or less in the same direction. Hurd (and his predecessors) had no clear vision on how to integrate all those nifty ideas from all those acquisitions into the old-school legacy business model that still relied on the philosophy that technology is arcane and byzantine and belongs to the wizards and not to the masses.

The modern IT world (both business and consumer) is far more nimble, and very much more in the hands of the end-user, and the heart of all of it is the software, not the hardware. It's a new world and whatever else you can say about him, Apotheker knows the software world and has proven he has the stones to lead in it.

Time will tell--the CEO is the public face of a company, but even a public relations rock star like Jobs doesn't turn his company on a dime. Wait and watch. By next June (the date of the 2011 HP software/hardware convention) his vision will be clear enough for us to make informed judgments.

(that said, where's my freaking PalmPad already???)

Actually, the choice does not worry me overmuch. He is clearly a hand out to the Euro market and frankly someone who by his resume can probably keep his Pre in his pants. What concerns me is that this is almost the same article that PC Mag ran yesterday. I am not slinging out the "P" word, there was clear attribution that Dieter was just regurging other stories. It bothers me that we have an "article" when some links would have done nicely. If someone beat you to the story, then look for a new angle, hitting the Euro market for example. Don't do a rehash.


Now I understand why he said "... and why WE are potentially concerned" in the title.

He wasn't referring to the webOS community. He was referring to tech ANALysts.

What is it that Derek Kessler actually thinks??? We'll never know.

I prefer this article written by another PC Mag author:,2817,2370112,00.asp

"On the other hand, Apotheker's an HP outsider who brings to the company something it's clearly lacking: The willingness and nerve to make hard choices about hardware and software and the insight into how to create a marriage between the two and an ecosystem to rival anything coming out of Apple."

Seems like an alright perspective to me. Like I said, somebody serious would be needed to meld the several companies that HP has just acquired. Considering the enterprise nature of the software companies that have been purchased... it seems like a good fit to me.

I'm still waiting to hear what Derek really thinks/feels about Apotheker, tho. I only heard him write what Sascha Segan wrote... just Sascha wrote it better.

I'm starting to wonder how committed HP is to Palm. When the acquisition was first announced, there was all this excitement about HP's resources and how they would bolster Palm to compete with the Big Boys. But here we are, well into a completed merger and I haven't seen a Palm/WebOS commercial on TV in months, no new devices have definitively been announced, and all we hear about is how WebOS is going to put on *printers*. Are you kidding me?

I'm really starting to believe that HP bought Palm solely for their patent portfolio. It's obvious they have no intention of seriously competing in the smartphone market. Otherwise, what are they waiting for?

It's not just printers. It's everywhere. When everybody first got their Pre, all people could think about is how they wish their desktop or laptop worked the same way!! HP realizes this!

It's the "unified interface and experience".

Read this for a more positive opinion:,2817,2370112,00.asp

"Step back and you see that even Apotheker's somewhat tone-deaf statements to the press on Friday have a sort of hidden brilliance. He talked about HP's "sum of its parts" and described software as a "glue that makes it all happen": inelegant sentiments that reduce a lot of innovation to their core components. They're also exactly right."

I think it's important to remember that HP just outbid a number of other companies to buy Palm. This had to have been approved by the Board of Directors. No new CEO will likely be able to disuade the BOD's direction on a new acquisition.

Now, if Palm was an older division that was floundering and had very little excitement, it might be different.

Remember that Palm brings something unique to HP: us. I might be grasping here but true Palm users are almost as fanatical as Amiga users and some Apple fans. How many people do you see waiting in line for a new HP release? But the buzz in the Palm community is different altogether.

Palm gives HP the chance to build a stronger customer loyalty base in the niche market.

Given that HP is primarily an enterprise technology company, the new CEO was probably a good choice. Consumer businesses like cheap laptops, inkjet printers and smartphones are really a side business for HP.