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"The corporate brand is not only used to improve competitive positioning and express company aspirations, it can also be a powerful tool to motivate employees."

Market Populism: Karl Cates

The line -- if there is one -- between free-run capitalism and the greater good.


Dec 10
2009

H-P's CFO sees a wintertime turnaround

Posted by kcates in IT spendinginformation technologyHewlett-PackardCathie Lesjak

kcates
 

Here's a sign that the business economy is feeling the tickle of a turnaround: Hewlett-Packard's CFO said in a speech in San Francisco this week that the company was expecting gangbuster business as the year winds down and we inch toward springtime.

"There's a sense -- at least within our organization -- that there is a bit of a budget flush going on and we want obviously to be there to take advantage of it," Cathie Lesjak said at a Barclays technology conference, adding that H-P "is in a very different place than we were a year ago."

By "budget flush," CFO Lesjak apparently means that businesses for a change have some money to spend on information-technology upgrades, a heartening sign for vendors like H-P, whose logo is next to the world "behemoth" in the dictionary ($118.4 billion in revenue in fiscal 2008 and a presence in 170 countries).  H-P of course is a company that makes printers - lots of them - and Lesjack mentioned a current "uptick in demand" in that department and said that the company this fall had finally managed to meet an unexpected sure in demand for ink cartridges but was still playing catch-up with customer orders for laser printers. 

Note also that H-P this spring will close on the $3 billion acquisition of 3Com Corp, which makes networking equipment (routers, switchers, wireless, etc.).

A couple of weeks ago, Javesh Punater, chief executive of Gravitas Technology spoke to me for a tech-trend article posted at SecuritiesOperations.com, and said he thought things were about to break loose after a year of what in many sectors has been a spending freeze.  Gravitas is in a very specialized niche - providing back-office tech support to private equity funds and hedge funds - but it is drastically jacking up its activity in response to demand from its 80 clients. The company runs 30 data-center "racks" in server farms in northern New Jersey and is adding 20 more in the next few months.  I heard similar things from IT operations companies like Capco and Tervela.

But back to H-P, which is doing more than sending its executives out to make speeches.  The company this week asked its U.S. sales force responsible for products like network servers and data storage to forget about a scheduled two-week break over the holidays.  "We need all hands on deck," Randy Seidl, the sales leader for that unit, wrote in an email leaked to Bloomberg.

It was a reversal of an earlier order that workers burn two weeks of holiday and vacation time immediately after Dec. 21.

Ebenezer Scrooge would approve of the change, but if IT spending is a bellwether, this is good news.

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