Company Outsider Leo Apotheker Named New CEO, President of Hewlett-Packard

Leo Apotheker has been tapped to be the new chief executive officer and president of Hewlett-Packard – a surprise for many following the selection process.

Apotheker was previously CEO of SAP and led the company through periods of growth and profitability. He has extensive international business experience as well as experience in business acquisitions -- two important areas for HP. Reuters (News - Alert) reported that Apotheker was described by colleagues as having “sharp business acumen.”

But his leadership record is mixed, Reuters said, as he had a quick exit in February from the German software company amid investor criticism, according to the Reuters report.

A European rather than someone who has roots in Silicon Valley, Apotheker’s selection comes as a bit of a surprise to several analysts.

He comes to HP as the tech giant has a rosy financial outlook. Next year's revenue is expected to total $131.5 billion to $133.5 billion, an increase of 5 percent to 7 percent, the AP reported. The latest projections reflect HP’s confidence that it can boost profit margins as it expands into consulting services, computer security and storage while maintaining its lead in PCs and printers, according to the AP.

The company also expects to keep increasing market share through acquisitions, having already spent about $31 billion buying 35 companies during the past four years, the AP reports.

During Apotheker’s more than 20 years at SAP, he was a driving force in making it the largest business software applications company in the world, according to HP. During his tenure, he transformed R&D and technology there and expanded business models and customer segments. Apotheker also helped lead SAP to 18 consecutive quarters of double-digit software revenue growth between 2004 and 2009.

“Leo is a strategic thinker with a passion for technology, wide-reaching global experience and proven operational discipline -- exactly what we were looking for in a CEO,” said Robert Ryan, an independent director of the board. “After more than two decades in the industry, he has a strong track record of driving technological innovation, building customer relationships and developing world-class teams.”

“Leo has been a leader in anticipating the transformation taking place in our industry, and we believe he is uniquely positioned to help accelerate HP’s strategy,” Ryan added. “He has demonstrated success in the U.S. market and also has vast international experience -- which will be a major asset as HP continues to expand globally, particularly in high-growth emerging markets. HP has the right assets and market positions, and now we have the best team to realize the company’s enormous potential.”

In conjunction with the announcement, Apotheker said he was honored to now be working with the more than 300,000 dedicated HP employees.

“HP has a powerful mix of businesses, products and services, one of the most innovative cultures in the industry, and an accomplished management team who have played a critical role in its success,” said Apotheker. “Given HP’s diversified products and services, its financial strength, and its leadership position across markets, no other company is as well positioned to drive -- and profit from -- the revolutionary changes under way in the marketplace. As we move forward, HP will continue to be a valued partner with our customers as well as a fierce competitor. I look forward to working with the outstanding people at HP to write the next chapter in the company’s long and proud history.”

The board also elected Ray Lane, managing partner at Kleiner Perkins Caufield & Byers, as a new member of the board and designated him as non-executive chairman.

Both positions are effective Nov. 1.

Lane has been a member of the boards of directors of more than 20 public and private companies and joined Kleiner Perkins in 2000. Previously, he was president and chief operating officer at Oracle Corporation. Earlier, Lane worked at Booz Allen Hamilton, EDS and IBM (News - Alert).

“I am excited to join the board of this pioneering company, and look forward to working closely with Leo -- and the rest of the board and senior management team-- as they capitalize on the changes taking place across the industry,” Lane said. “I have known and admired Leo for almost 20 years. He is ideally suited to build on HP’s strong foundation, leverage its many assets and keep the company at the forefront of innovation.”

Apotheker will succeed Cathie Lesjak, who was named interim CEO in August 2010. She took the position after the previous CEO, Mark Hurd (News - Alert), stepped down under pressure after sexual harassment allegations surfaced.

Lesjak, who has been HP’s chief financial officer since January 2007, remains CFO.

Apotheker worked at SAP for more than 20 years in a variety of positions. He led worldwide sales, service, and field operations for five years and more than doubled the number of customers; turned around SAP’s North American operations; and led more than a dozen acquisitions, including the approximately $7 billion takeover of Business Objects, the first major acquisition in SAP’s history.

 In addition, Apotheker was the founding president and chief operating officer of ECsoft BV, one of the largest European venture capital start-ups, from 1992 to 1994. He also has held leadership and management positions at ABP (News - Alert) Partners, McCormack & Dodge Europe, S.W.I.F.T. and Altex GmbH.

Apotheker was born in Aachen, Germany on Sept. 18, 1953, and graduated with a bachelor’s degree in economics and international relations from Hebrew University, Jerusalem. He is fluent in five languages (English, Dutch, French, German and Hebrew) and was awarded the French Légion d’honneur in 2007 in recognition of his business leadership and contribution to the French economy.

Apotheker currently is vice chairman of the Supervisory Board of Schneider Electric (News - Alert) SA, and is a member of the board of GT Nexus and the board of PlaNet Finance, a not-for-profit organization.

Lane received a bachelor’s degree in mathematics and an honorary degree in science from West Virginia University. He is chairman of the board of trustees of Carnegie Mellon University, is on the board of governors of WVU, and is vice chairman of Special Olympics International.