In an interview with the Wall Street Journal, Palmisano shared his thoughts about HP, which is currently IBM’s largest competitor. He said that IBM would once never have bought 3PAR for $2.4 billion, the price HP eventually settled on after a long bidding war with Dell, indicating that HP was mad to pay over three times what the company was worth before the bidding war ensued.
He said that the reasoning behind HP’s buy was because it “had no choice”, due to a lack of research and development within the company itself. He blamed former HP CEO Mark Hurd, saying that the company used to be very inventive, but no longer invests in new technology.
He was also particularly condemnatory of how the Board of Directors at HP dealt with the departure of Hurd after the sex and expenses scandal. He said that the $35 million severance package Hurd got was not a good use of shareholder money, particularly considering Hurd then took up the post as President of Oracle, with a salary of $950,000 and a $10 million bonus.
Palmisano said that HP is not really a threat to IBM and that he is not worried about it, but he did indicate that Oracle was becoming a major player. He commended Oracle’s work and its CEO Larry Ellison, and said that it will be the biggest threat to IBM in the long run.