What is Foolsaurus?

It's a glossary of investing terms edited and maintained by our analysts, writers and YOU, our Foolish community. Get Started Now!


Hewlett-Packard

Hewlett-Packard (NASDAQ: HPQ) is one of the world's leading manufacturers of computers, printers, and networking products. Headquartered in Palo Alto, Calif., it's been led by Chairman and CEO Mark Hurd since 2005. Hewlett Packard ranked No. 41 on the 2008 Fortune Global 500 list of the world's largest companies, with more than $104 billion in sales and more than $7.2 billion in profits.

Contents

Company Description

Hewlett-Packard, usually called simply "HP," is one of the world's best-known manufacturers of computers and peripherals. Its printers and imaging machines are considered by many end users to be HP's marquee product, and one of the market's best. HP is one of the oldest computer makers in existence, and its powerful brand name and trailblazing history and culture include the appointment of one of the most prominent female CEOs in American history, Carly Fiorina. Recently, HP has regained the top spot in worldwide computer sales, pulling ahead of rival Dell.

Company History and Profile

Call it "Bill and Dave's Excellent Adventure." In 1939, Stanford electrical engineering graduates Bill Hewlett and Dave Packard founded a little company in a Palo Alto garage, putting their nerdtastical knowhow to work on a new kind of oscillator to test sound equipment. (Wittingly or otherwise, they were following a proud tradition of garage-based entrepreneurship that began with General Electric and would continue with Apple, Google, and, if you count guesthouses, The Motley Fool.) They flipped a coin to determine whose name would go first in the company; Packard won, but in true engineer fashion, let Hewlett's name go first, presumably since it just sounded better. The Walt Disney Company became one of HP's earliest customers, buying eight of the units for use in developing a little film called Fantasia.

HP steadily grew, building the sort of equipment that, to be entirely honest, will probably only interest you if you also happen to be an electrical engineer. Suffice to say that it was good enough for Uncle Sam, who bought HP's products in increasing amounts during World War II, helping the company grow and gain steadier footing.

For all their mechanical achievements, Bill and Dave's greatest innovation may be the culture they fostered at HP, right down to encouraging their employees to call them "Bill" and "Dave." Keenly attuned to the needs and preferences of engineers, they built HP into a forward-thinking Dilbertian paradise in which employees were treated well, given health care and a share of the profits, and allowed to pursue the company's stated goals in any manner they saw fit.

Though the company's now best-known for its computers, it didn't even enter that field until nearly 30 years after its founding, in 1966. In an age when computers were huge, bulky prima donnas that demanded precisely climate-controlled conditions, HP distinguished itself by building rugged (though still huge and bulky) computers that could stand up to real-world conditions. In the 1970s, the company would make a name for itself by getting small, inventing the first pocket calculator (for which a generation of desperate math students owes HP a great debt) and a "desktop calculator" that may have been the first personal computer. Apple co-founder Steve Wozniak developed the Apple I while working at HP, but the company passed on it, apparently disinterested in further pursuit of personal computing.

That would change in a big way in the '80s and '90s, as HP entered the business computing market, and pioneered laser and inkjet printing. In 1995, the company finally got into home computing -- history does not record whether Steve Wozniak ever said "I told you so" -- and is now one of the world's leading PC sellers. In 1999, HP spun off all the geek-centric equipment on which it had been built as Agilent, focusing whole hog on the computer, imaging, and printing industry.

Dave died in 1996, followed by Bill in 2000, which spared both founders from following the groundbreaking but ultimately unsuccessful reign of CEO Carly Fiorina, which included HP's merger with Compaq. Mark Hurd took over following Fiorina's ouster in 2005, and has since returned the company to success and profitability. In May 2008, HP announced plans to merge with EDS.

HP now operates in dozens of countries worldwide, but it doesn't seem to have forgotten its roots. The original garage in Palo Alto is now a fully restored historical landmark.

Divisions

HP maintains four divisions, which roughly break down as:

  • Personal computers.
  • Imaging and printing.
  • Business computers and networking products.
  • EDS, which provides business-related computer consulting and outsourcing services.

Related Articles

Related Companies

Recent Mentions on Fool.com

Advertisement