Ex-Compaq trio pay for HP's poor performance

HP has made several management changes in the wake of "unacceptable" performance in its enterprise servers and storage (ESS) unit.

The company reported yesterday that third-quarter revenues in its ESS division fell to $3.4bn - down five per cent on the same period a year ago.

Industry-standard server revenue grew two per cent year over year. Business-critical server revenue declined eight per cent to $828m, with Unix revenue up eight per cent, Alpha down 32 per cent, and NonStop down 25 per cent.

Total storage revenue for the quarter was $709m - down 15 per cent year over year. Online storage declined 23 per cent and near-line storage declined 16 per cent year over year.

Branding the performance "unacceptable", HP chief executive Carly Fiorina announced "immediate management changes".

Three former Compaq executives have been canned: Peter Blackmore, executive vice president of the customer services group; Kasper Rorsted, vice president for HP's Europe, Middle East and Africa division; and Jim Milton, managing director for North America.

HP acknowledged that channel problems had led to lower revenues in Europe. These included channel compensation issues, overly aggressive discounting and a transition to a centralised claims process.

"We have already resolved centralised claims and expect to have compensation issues behind us by Q1 [November 2004-January 2005]," said Fiorina.

Fiorina also noted that HP's troubled implementation of a supply chain system had led to problems with customer orders. But she added that these problems had now been solved.