Information Age: News, analysis & insight for IT & business leaders

10 December 2003 Hewlett-Packard (HP) CEO Carly Fiorina has announced a radical restructuring that will involve combining HP's services and corporate hardware units into one "technology solutions group".

The merger of two of its biggest divisions, enterprise (servers and software) and services (maintenance and support), is intended to improve the co-ordination of its approach to major corporate customers. Services chief Ann Livermore will head the new group.

The announcement coincided with a bullish address to analysts in New York, in which Fiorina fought back against criticism that the US computer and printer giant had suffered as a result of its merger with Compaq 18 months ago.

Brandishing $1 billion in new services contract wins and improved quarterly and annual results, Fiorina rebuffed claims that HP was failing to be sufficiently innovative to distinguish it from its main rivals, particularly Dell and IBM.

"This is a company that leads in virtually every category in which we compete," Fiorina told an audience of financial analysts in New York. "I know it's popular to describe HP as stuck between IBM and Dell," she said, "but unfortunately the facts don?t support the thesis."

The results, by no means sparkling compared to the double-digit growth achieved by Dell, were nevertheless on a par with IBM's recent results. In the fourth quarter to the end of October, revenues rose 9% to $19.85 billion, compared to the same period a year earlier, and the net income were up from $390 million to $862 million.

For the full year, revenues rose by just 1%, although net income swung from a loss of $928 million in fiscal 2002 to a net profit of $2.54 billion.