HP's top priorities after its change of CEO: Regain lost trust, resolve identity crisis

Steve Ranger's Notebook: Meg Whitman has some big decisions to make...

HP's biggest problem is working out what kind of company it actually wants to be, says silicon.com editor Steve Ranger.

You can say one thing for HP - it's definitely shed that image of being boring. It's now onto its third boss in 13 months, having unveiled Meg Whitman as president and CEO on Thursday.

Now is a "critical moment" for the company, HP's executive chairman Ray Lane said yesterday, going on to praise Whitman's operational, communication and leadership skills.

The former eBay chief will need all those skills - and more - to resolve the tangle that HP has got itself into.

A quick history lesson: under former CEO Mark Hurd, HP worked hard at getting costs under control. However, one victim of this cost-cutting was innovation. That's where ex-SAP boss Leo Apotheker came in. Appointed as CEO, Apotheker began creating a new vision for HP, which would most likely have focused on building up the high-margin software side of the business - his area of expertise - and moving away from the low-margin hardware.

It was a transition that involved buying Autonomy, re-examining the future of HP's hardware business and jettisoning webOS - the latter was a bit of a distraction and the TouchPad hadn't troubled Apple so HP was better off without it, the thinking ran.

HP webOS

webOS - the unit behind HP's TouchPad - was killed off under CEO Leo ApothekerPhoto: HP

Communication problems

However, the explanation of that transition was bungled. Ditching the TouchPad turned into a surreal saga of a zombie tablet, while talk of rethinking the PC business spooked customers, staff and the market.

On top of that, HP probably paid too much for Autonomy, too. The acquisition will nonethless proceed as planned, HP revealed this week, and it will also decide before the end of the year what to do about the PC business, as well as figuring out what to do with webOS. Plenty for Whitman to work on, then.

In light of its change of CEO, analyst TBR predicts HP will now perform a U-turn and hold onto its PC business: "The synergies between PCs and the rest of HP's business are positive, giving the company greater scale and allowing it to leverage its sales forces and partnership ecosystem. We believe assuring customers it will retain and nurture its PC business is HP's most logical and likely course of action," the company said.

But Forrester analyst Pascal Matzke is less certain: "[HP] might undo the planned PC spin-out, but only if they...