HP's enterprise server group has stumbled by betting big on Intel Corp.'s Itanium, at a time when its major competitor, IBM Corp., focused on its Power architecture, King said. The group has also failed to incorporate some of the technology it acquired along with Compaq, such as the Alpha processor and Nonstop server technology, he said.
Compaq's Nonstop line was "the nearest thing any vendor had to competing with IBM's mainframe division," and it has languished since the merger, King said.
HP's storage division has also struggled since the merger. "The Compaq deal brought them a lot of good quality midrange storage products," King said. But after losing former Compaq executive Mark Lewis in 2002, who had served as vice president of worldwide marketing and solutions at HP's Network Storage Solutions Group, the company has dealt with a flood of executive defections to EMC Corp. and its storage business has suffered.
Lewis' departure "was a huge loss for HP," King said. "He's a very, very smart guy. EMC was a major beneficiary of HP's inability to articulate what they wanted to do with storage."
In Europe, Rorsted presided over a region that had been historically strong for HP, but was under attack by rival Dell Inc. Dell said in April that it believed it had taken market share from HP over the course of the year with the same direct-sales approach it uses in the U.S.