Slideshow: Apotheker Takes The Stage, Paints An HP Cloud Vision

Hewlett-Packard is shaking up its management ranks, moving long-time executive VP Ann Livermore to a board seat and out of day-to-day operations. CIO Randy Mott, who led a massive global transformation of HP's IT operations, is out, as is chief administrative officer Pete Bocian. The move also means that three key executives--Dave Donatelli (servers, storage, and networking), Bill Veghte (software), and Jan Zadak (global sales)--now report directly to CEO Leo Apotheker.

Livermore, a 29-year veteran of HP, will stay on as interim head of HP Enterprise Services until HP names a new services leader. Apotheker had signaled that there might be a shakeup coming after last quarter's disappointing earnings report. A statement from HP said that having the key executives report to Apotheker is part of "facilitating efforts to better leverage the full HP portfolio to deliver integrated solutions for customers and partners."

Apotheker, in announcing disappointing earnings in May, blamed in part inadequate investment in new services capabilities after HP completed acquisition of EDS. "Despite our stated intention to change our services business, there never was any measureable shift in our services mix over the past several years," he said. "We had over-executed operationally and under-invested strategically, and it became clear we were missing opportunities." Apotheker said HP needs to be a bigger player in strategic services, such as helping companies migrate their IT infrastructures to the cloud.

As to Mott's departure, HP said it planned to "broaden the role of its chief information officer." It described Mott's and Bocian's departures as "part of the realignment to improve the company's focus on customer-facing businesses." HP says it will conduct a search for a successor to Mott. HP will expand the CIO role by shifting over some responsibilities that had fallen under the chief administrative officer. The functions include global procurement and volume operations, which supports the processes for high volume direct sales and channel sales, from proposals to payments to rebates. It also includes HP's global business services organization, which is charged with improving internal HP operating efficiency.

Mott had a huge impact on HP's IT operations after being hired by CEO Mark Hurd in 2005 to run IT with the kind of discipline and accountability that Hurd demanded of business executives. Mott (who is a member of InformationWeek's editorial advisory board) transformed the HP IT operation through a massive consolidation and centralization effort.

Under Mott, HP went from 86 data centers scattered around the world down to six global data centers through a three-year consolidation. Along with it, Mott brought new discipline to IT budgeting, forcing business units to do cost-benefit analysis for every IT project, regardless of size. That process yielded what Mott referred to as the "revenue of IT"--the benefits that IT projects, so that discussions didn't focus entirely on what IT costs.

The effort didn't always endear Mott to HP business leaders. It forced business unit leaders to rank IT projects by priority, but instead of ranking projects 1, 2, 3, and 4, "we had a lot of people who did a stacked ranking that was 1, 1, 1, 1," Mott said, in an interview in 2008. That's when Mott needed--and got--the backing of Hurd.

In an interview last November, however, Mott downplayed the transition from Hurd to Apotheker, predicting it wouldn't have a major impact on HP's IT strategy. "I wouldn't see it as a right turn or a left turn," he said at the time. Besides, executive teams are constantly reassessing strategy: "Most companies that are being responsive to the marketplace are constantly changing."

In addition to driving change in HP's IT organization, Mott also played the part of CIO missionary, traveling the world holding IT leadership events for HP customers where he preached his gospel of IT transformation. He spoke as a peer to his fellow IT leaders, but wasn't above challenging them to tackle a major IT transformation and improve IT performance. "Being at an industry average means you're at the top of the loser pile," he told a crowd last November, at a gathering in Atlanta. He would then lay out his team's transformation effort.

Mott could be just as tough on his own IT organization, constantly pushing for improvement. Having driven the average time to deliver IT projects down to six months, he had targeted getting it down to 90 days.

InformationWeek named Mott its IT chief of the year when he was CIO at Wal-Mart.

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