New HP CEO Could Signal Strategic Shift From IT Services to Software

Partner David Rutchik offers deep marketplace analysis in this article about the impacts of HP naming Leo Apotheker as its new CEO. Sample excerpts: “’It doesn't seem as though outsourcing will be HP's focus. This [appointment] shows an emphasis on software as a growth engine rather than services,’ says David Rutchik, partner with outsourcing consultancy Pace Harmon. ‘HP is disappointed with the growth in the outsourcing area—both its internal results and external market opportunity.’…‘Elevating Ann Livermore [head of HP's services business] to the top job would have made a statement that HP is a services company,’ Rutchik says. ‘That is what IBM did when appointing Sam Palmisano.’…‘We expect HP to initiate extensive technology solutions in delivering outsourcing services to customers, utilizing more automation and systemization, replacing [their] labor [base], and driving down their costs,’ says Pace Harmon's Rutchik. ‘While this is true industry-wide, HP's efforts could be disproportionate, benefitting their outsourcing customers via lower prices and more innovative solutions.’”