Hewlett-Packard has named former SAP CEO Leo Apotheker to be its new president and chief executive, replacing Mark Hurd, who resigned abruptly last month in the midst of a scandal. HP's announcement on Thursday came as a surprise, since the company had reportedly been focusing lately on internal candidates. Apotheker's name had not been raised by industry pundits as a likely successor.
It also means that HP overlooked two internal candidates for the position: Ann Livermore, the head of HP's enterprise business and Todd Bradley, who runs its giant PC division.
The HP board also appointed Ray Lane, a former Oracle president, to be its non-executive chairman. Like Livermore and Bradley, Lane had been seen as a possible contender for the top job. Both appointments are effective November 1, HP said.
Apotheker will likely be seen as a controversial choice. He spent more than 20 years at SAP, becoming joint CEO in April 2008 and then its sole CEO in May 2009. His tenure as sole CEO lasted less than a year, however, and Apotheker resigned unexpectedly in February after SAP's supervisory board opted not to renew his contract.
HP praised Apotheker's long career and said he was "a driving force in making [SAP] the largest business software applications company in the world."
"Leo is a strategic thinker with a passion for technology, wide-reaching global experience and proven operational discipline, exactly what we were looking for in a CEO," HP said in a statement.
His experience in the software industry may also have been a factor. HP's future lies to some extent in expanding its software portfolio to better compete with IBM and Oracle, said Ray Wang, a partner with technology consulting company Altimeter Group. "HP needed a tech leader, someone who has run a billion dollar business, someone who has a global perspective and a software perspective to help the company get more into the software business, and there aren't too many people like that walking the street," Wang said.
HP will likely be on the lookout to partner with and acquire software businesses, he said. Indeed, speculation about a possible acquisition of SAP may intensify in the wake of HP's announcement, but the company is more likely to buy a company with more of a "cloud orientation," Wang said. "There's always been rumours about SAP being acquired, but a SaaS-oriented company like Salesforce.com would likely make more sense," he said.