Why Hewlett-Packard's Impulse Buy Didn't Pay Off

When Leo Apotheker took over as Hewlett-Packard’s chief executive officer two years ago, the company needed shock therapy. HP was stuck with a portfolio of slow-growth businesses—PCs, printers, and servers—and had missed major tech industry developments including smartphones, tablet computers, and online cloud-computing software. Apotheker believed that HP’s platform was sinking, according to a person familiar with the executive’s thinking, and likened this fabled Valley company to a dying animal. He “appeared to be in a hurry to transform the company,” says Robert W. Baird analyst Jayson Noland. “You can’t cut costs forever, and investors wanted to see growth.”