Las Vegas -- One year and a week into his tenure as president and CEO of Hewlett-Packard, Mark Hurd took the stage at Forrester's IT Forum 2006: GigaWorld conference in Las Vegas. Following profiles this week in the Wall Street Journal and other media outlets that focused on the company's financial performance, Hurd turned the focus to product, service and competitive strategies and fielded questions from Forrester founder George Colony and the audience.

The CEO pointed to three areas of growth for HP: printing/imaging, a focus on the mobile market and an evolving data center focused on virtualization, modularization and looming automation that will lower price points for customers. "You won't be arbitraging labor," said Hurd, "you'll be eliminating labor." Overall, he predicted a blurring between products and services and the need to offer services in support of in-house technologies. "If you're a service business that doesn't have a direct alignment to a technology, you will be at somewhat of a disadvantage because the opportunity to align technology directly to the service delivery process is a key competitive advantage." Hurd repeatedly pointed to HP's need to uncomplicate and improve customer interaction and service. "We are in the process of hiring more salespeople, trying to align them closer to the customer [and shrinking] layers of management."

Other Highlights

Looking back on his first year at HP:

"When I look at all that's happened in a year I'm not sure I'd want to go through it again. I think it's one of those things [where] you're excited when you go and you look back and say, 'we did all that' ... The biggest surprise I had coming to HP was the tenacity of the people to go work on the whole thing."

The toughest job he's faced at HP:

"The hardest thing you'll ever do is to fire somebody ... Every one of those people has a family."

On the evolution of the print industry:

"The number of print images is going to incline [increase] double digits, 11 or 12 percent ... that's good news for somebody like us ... We are basically the world's number one printer company and we are trying to change that to become the world's leading printing and imaging company. Because of the advent of the Web and digitization, those images are moving from the home to the Web and to retail locations. [Recently acquired] Snapfish has 24 million registered users, 53 percent market share in the U.S. The announcement we made on retail photo kiosks and the partnerships we have done isn't just because we want to be in the kiosk business. It's because those printed pages are moving in the marketplace, and we want to be ubiquitous in our ability to help capture, support and deploy that technology regardless of where the market goes."

How to become an archetypal service company:

"You'll see us spending R&D in our services business that will be directly aligned with HP technology that literally drives the cost out of our service delivery process. First, we standardize our service and delivery so the way you deal with one customer is the same way you do it with another customer. You can actually automate many of those processes that eliminate labor and lower the cost point. Aligning, for example, our service and delivery around OpenView is a core objective in our organization. [In our software business] it isn't just important to us to have a 25 percent growth ... it's also strategically important to us that we align the software business and the services business so we leverage that opportunity."

Where he sees consolidation in the IT industry:

"We've got six [large technology] companies with more than [an aggregate] $100 billion in cash. You have three choices for what to do with that cash: consolidate the industry, buy back our own stock or cut higher dividends. I think you'll see continued pressure toward bigger companies, bigger leverage, more innovation, not less. Whether that's good news or not, that's the reality of where we are." 

On the future of the U.S. IT workforce:

"[When it comes to] competitiveness, I'm the CEO of a global company so I bear a responsibility [to HP]. As an American, we have a very interesting time ahead of us. ... We graduated 80,000 engineers from U.S. universities last year. China graduated over 400,000; India graduated over 150,000 and they are very smart folks. We have a wave of nationalism in this country like we've probably never seen ... [but] America has never protected jobs and won. America has always created jobs and the way America has created jobs is by innovating ... The two industries in this country that are growing their GDP level are pharma and IT. If IT doesn't scale, forget HP, just look at the greater industry, if we don't get that done, we have bigger issues."

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