History

Bill Hewlett and David Packard graduated with degrees in electrical engineering from Stanford University in 1935. The company originated in a garage in nearby Palo Alto during a fellowship they had with past professor Frederick Terman at Stanford during the Great Depression. They considered Terman a mentor in forming Hewlett-Packard. In 1938, Packard and Hewlett began part-time work in a rented garage with an initial capital investment of US$538, equivalent to $9,772 in 2019. In 1939, Hewlett and Packard decided to formalize their partnership. They tossed a coin to decide whether the company they founded would be called Hewlett-Packard (HP) or Packard-Hewlett. HP was incorporated on August 18, 1947, and went public on November 6, 1957.:35,40,64,70,196

Of the many projects they worked on, their first financially successful product was a precision audio oscillator known as the Model HP200A. Their innovation was the use of a small incandescent light bulb (known as a "pilot light") as a temperature dependent resistor in a critical portion of the circuit, the negative feedback loop which stabilized the amplitude of the output sinusoidal waveform. This allowed them to sell the Model 200A for $89.40 when competitors were selling less stable oscillators for over $200. The Model 200 series of generators continued production until at least 1972 as the 200AB, still tube-based but improved in design through the years.

One of the company's earliest customers was Bud Hawkins, chief sound engineer for Walt Disney Studios, who bought eight Model 200B audio oscillators (at $71.50 each) for use in the animated film Fantasia. HP's profit at the end of 1939, its first full year of business, was $1563 on revenues of $5369.

They worked on counter-radar technology and artillery shell proximity fuzes during World War II, which allowed Packard (but not Hewlett) to be exempt from the draft. Hewlett served as an officer in the Army Signal Corps after being called to active duty. In 1942, they built their first building at 395 Page Mill Road and were awarded the Army-Navy "E" Award in 1943. HP's line of products during the war included the audio oscillator, a wave analyzer, distortion analyzers, an audio-signal generator, and the Model 400A vacuum-tube voltmeter, and employed 200 people.:54–60,195

In 1947, the company incorporated with Packard as president. He handed the presidency over to Hewlett when he became chairman in 1964, but remained CEO of the company.

Sales reached $5.5 million in 1951 with 215 employees. In 1959, a manufacturing plant was established in Böblingen and a marketing organization in Geneva.:196

1960sedit

HP is recognized as the symbolic founder of Silicon Valley, although it did not actively investigate semiconductor devices until a few years after the "traitorous eight" had abandoned William Shockley to create Fairchild Semiconductor in 1957. Hewlett-Packard's HP Associates division, established around 1960, developed semiconductor devices primarily for internal use. HP Associates was co-founded by another former Bell Labs researcher, MOSFET (MOS transistor) inventor Mohamed Atalla, who served as Director of Semiconductor Research. Instruments and calculators were some of the products using semiconductor devices from HP Associates.

During the 1960s, HP partnered with Sony and the Yokogawa Electric companies in Japan to develop several high-quality products. The products were not a huge success, as there were high costs involved in building HP-looking products in Japan. In 1963, HP and Yokogawa formed the joint venture Yokogawa-Hewlett-Packard to market HP products in Japan. HP bought Yokogawa Electric's share of Hewlett-Packard Japan in 1999.

HP spun off the small company Dynac to specialize in digital equipment. The name was picked so that the HP logo could be turned upside down to be a reflected image of the logo of the new company. Eventually, Dynac was renamed Dymec, and was folded back into HP in 1959. HP experimented with using Digital Equipment Corporation (DEC) minicomputers with its instruments, but after deciding that it would be easier to build another small design team than deal with DEC, HP entered the computer market in 1966 with the HP 2100 / HP 1000 series of minicomputers. These had a simple accumulator-based design, with two accumulator registers and, in the HP 1000 models, two index registers. The series was produced for 20 years, in spite of several attempts to replace it, and was a forerunner of the HP 9800 and HP 250 series of desktop and business computers.

At the end of 1968, co-founder Packard handed over the duties of CEO to Hewlett to become United States Deputy Secretary of Defense in the incoming Nixon administration. He resumed the chairmanship in 1972 and served until 1993, but Hewlett remained the CEO.

1970sedit

The HP 3000 was an advanced stack-based design for a business computing server, later redesigned with RISC technology. The HP 2640 series of smart and intelligent terminals introduced forms-based interfaces to ASCII terminals, and also introduced screen labeled function keys, now commonly used on gas pumps and bank ATMs. The HP 2640 series included one of the first bit mapped graphics displays that when combined with the HP 2100 21MX F-Series microcoded Scientific Instruction Set enabled the first commercial WYSIWYG Presentation Program, BRUNO that later became the program HP-Draw on the HP 3000. Although scoffed at in the formative days of computing, HP would eventually surpass even IBM as the world's largest technology vendor, in terms of sales.

HP is identified by Wired magazine as the producer of the world's first device to be called a personal computer: the Hewlett-Packard 9100A, introduced in 1968. HP called it a desktop calculator because, as Bill Hewlett said, "If we had called it a computer, it would have been rejected by our customers' computer gurus because it didn't look like an IBM. We therefore decided to call it a calculator, and all such nonsense disappeared." An engineering triumph at the time, the logic circuit was produced without any integrated circuits; the assembly of the CPU having been entirely executed in discrete components. With CRT display, magnetic-card storage, and printer, the price was around $5,000. The machine's keyboard was a cross between that of a scientific calculator and an adding machine. There was no alphabetic keyboard.

Apple co-founder Steve Wozniak originally designed the Apple I computer while working at HP and offered it to them under their right of first refusal to his work; they did not take it up as the company wanted to stay in scientific, business, and industrial markets. Wozniak said that HP "turned him down five times", but that his loyalty to HP made him hesitant to start Apple with Steve Jobs.

The company earned global respect for a variety of products. They introduced the world's first handheld scientific electronic calculator in 1972 (the HP-35), the first handheld programmable in 1974 (the HP-65), the first alphanumeric, programmable, expandable in 1979 (the HP-41C), and the first symbolic and graphing calculator, the HP-28C. Like their scientific and business calculators, their oscilloscopes, logic analyzers, and other measurement instruments have a reputation for sturdiness and usability (the latter products are now part of spin-off Agilent's product line, which were later spun off from Agilent as Keysight Technologies). The company's design philosophy in this period was summarized as "design for the guy at the next bench".citation needed

The HP 9800 series of technical desktop computers started in 1975 with the 9815, and the cheaper HP series 80, again of technical computers, started in 1979 with the 85. These machines used a version of the BASIC programming language which was available immediately after they were switched on, and used a proprietary magnetic tape for storage. HP computers were similar in capabilities to the much later IBM Personal Computer, although the limitations of available technology forced prices to be high.citation needed

In 1978 co-founder Hewlett stepped down as CEO and was succeeded by John A. Young.

1980sedit

Sales reach $6.5 billion in 1985 with 85,000 employees.:198

In 1984, HP introduced both inkjet and laser printers for the desktop. Along with its scanner product line, these have later been developed into successful multifunction products, the most significant being single-unit printer/scanner/copier/fax machines. The print mechanisms in HP's tremendously popular LaserJet line of laser printers depend almost entirely on Canon Inc.'s components (print engines), which in turn use technology developed by Xerox. HP develops the hardware, firmware, and software to convert data into dots for printing.

On March 3, 1986, HP registered the HP.com domain name, making it the ninth Internet .com domain ever to be registered.

In 1987, the Palo Alto garage where Hewlett and Packard started their business was designated as a California State historical landmark.

1990sedit

In the 1990s, HP expanded their computer product line, which initially had been targeted at university, research, and business users, to reach consumers. HP also grew through acquisitions. It bought Apollo Computer in 1989 and Convex Computer in 1995.

In 1992, CEO John Young was succeeded by Lewis E. Platt, and in 1993 and co-founders Hewlett and Packard stepped down from the board with Platt succeeding Packard as chairman.

Later in the decade, HP opened hpshopping.com as an independent subsidiary to sell online, direct to consumers; in 2005, the store was renamed "HP Home & Home Office Store."

From 1995 to 1998, Hewlett-Packard were sponsors of the English football team Tottenham Hotspur.

In 1999, all of the businesses not related to computers, storage, and imaging were spun off from HP to form Agilent Technologies. Agilent's spin-off was the largest initial public offering in the history of Silicon Valley. The spin-off created an $8 billion company with about 30,000 employees, manufacturing scientific instruments, semiconductors, optical networking devices, and electronic test equipment for telecom and wireless R&D and production.

In July 1999, HP appointed Carly Fiorina, formerly of AT&T and Lucent, as the first female CEO of a Fortune-20 company in the Dow Jones Industrial Average. Fiorina received a larger signing offer than any of her predecessors. Fiorina served as CEO during the technology downturn of the early 2000s and led the merger with Compaq that was "disastrous", according to CNN and led to the firing of 30,000 U.S. employees. Under her leadership, the company doubled in size. Her tenure as CEO was beset by damaging leaks. The HP Board of Directors asked Fiorina to step down in 2005 following a boardroom disagreement, and she resigned on February 9, 2005.

Sales to Iran despite sanctionsedit

In 1997, HP started selling its products in Iran through a European subsidiary and a Dubai-based Middle Eastern distributor, despite U.S. export sanctions prohibiting such deals imposed by Bill Clinton's executive orders issued in 1995. The story was initially reported by The Boston Globe, and it triggered an inquiry by the SEC. HP responded that products worth US$120 million were sold in fiscal year 2008 for distribution by way of Redington Gulf, a company based in the Netherlands, and that as these sales took place through a foreign subsidiary, HP had not violated sanctions.

HP named Redington Gulf "Wholesaler of the Year" in 2003, which in turn published a press release stating that "the seeds of the Redington-Hewlett-Packard relationship were sowed six years ago for one market — Iran." At that time, Redington Gulf had only three employees whose sole purpose was to sell HP products to the Iran market. According to former officials who worked on sanctions, HP was using a loophole by routing their sales through a foreign subsidiary. HP ended its relationship with Redington Gulf after the SEC inquiry.

2000–2005edit

On September 3, 2001, HP announced that an agreement had been reached with Compaq to merge the two companies. In May 2002, after passing a shareholder vote, HP officially merged with Compaq. Prior to this, plans had been in place to consolidate the companies' product teams and product lines.

Compaq had already taken over Tandem Computers in 1997 and Digital Equipment Corporation in 1998. HP therefore still offers support for the former Tandem NonStop family and Digital Equipment products PDP-11, VAX and AlphaServer.

The merger occurred after a proxy fight with Bill Hewlett's son Walter, who objected to the merger. Compaq itself had bought Tandem Computers in 1997 (which had been started by ex-HP employees), and Digital Equipment Corporation in 1998. Following this strategy, HP became a major player in desktops, laptops, and servers for many different markets. After the merger with Compaq, the new ticker symbol became "HPQ", a combination of the two previous symbols, "HWP" and "CPQ", to show the significance of the alliance and also key letters from the two companies Hewlett-Packard and Compaq (the latter company being famous for its "Q" logo on all of its products).

In 2004, HP released the DV 1000 Series, including the HP Pavilion dv 1658 and 1040 two years later in May 2006, HP began its campaign, "The Computer is Personal Again". The campaign was designed to bring back the fact that the PC is a personal product. The campaign utilized viral marketing, sophisticated visuals and its own website (www.hp.com/personal). Some of the ads featured Pharrell, Petra Nemcova, Mark Burnett, Mark Cuban, Alicia Keys, Jay-Z, Gwen Stefani, and Shaun White.citation needed

In January 2005, following years of under performance, which included HP's Compaq merger that fell short, and disappointing earning reports, the board asked Fiorina to resign as chair and chief executive officer of the company. Following the news of Fiorina's departure, HP's stock jumped 6.9 percent. Robert Wayman, chief financial officer of HP, served as interim CEO while the board undertook a formal search for a replacement.

Mark Hurd of NCR Corporation was hired to take over as CEO and president, effective 1 April 2005. Hurd was the board's top choice given the revival of NCR that took place under his leadership.

2006–2009edit

In 2006, HP unveiled several new products including desktops, enhanced notebooks, a workstation and software to manage them, OpenView Client Configuration Manager 2.0. In the same year, HP's share price skyrocketed due to consistent results in the last couple quarters of the year with Hurd's plan to cutback HP's workforce and lower costs.

In July 2007, HP signed a definitive agreement to acquire Opsware in a cash tender deal that values the company at $14.25 per share. This combined Opsware software with the Oracle enterprise IT management software.

In the first few years of Hurd's new role, HP's stock price more than doubled. By the end of Fiscal 2007, HP hit the $100 Billion mark for the first time. The company's annual revenue reached $104 Billion, allowing HP to overtake competitor IBM.

On May 13, 2008, HP and Electronic Data Systems (EDS) announced that they had signed a definitive agreement under which HP would purchase EDS. On June 30, HP announced that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 had expired. "The transaction still requires EDS stockholder approval and regulatory clearance from the European Commission and other non-U.S. jurisdictions and is subject to the satisfaction or waiver of the other closing conditions specified in the merger agreement." The agreement was finalized on August 26, 2008 at $13 billion, and it was publicly announced that EDS would be re-branded "EDS a HP company." The first targeted layoff of 24,600 former EDS workers was announced on September 15, 2008. (The company's 2008 Annual Report gave the number as 24,700, to be completed by end of 2009.) This round was factored into purchase price as a $19.5 billion liability against goodwill. As of September 23, 2009, EDS is known as HP Enterprise Services.

On November 11, 2009, 3Com and Hewlett-Packard announced that Hewlett-Packard would be acquiring 3Com for $2.7 billion in cash. The acquisition is one of the biggest in size among a series of takeovers and acquisitions by technology giants to push their way to become one-stop shops. Since the beginning of the financial crisis in 2007, tech giants have constantly felt the pressure to expand beyond their current market niches. Dell purchased Perot Systems recently to invade into the technology consulting business area previously dominated by IBM. Hewlett-Packard's latest move marked its incursion into enterprise networking gear market dominated by Cisco.

2010–2012edit

On April 28, 2010, Palm, Inc. and Hewlett-Packard announced that HP would buy Palm for $1.2 billion in cash and debt. Before this announcement, it was rumored that either HTC, Dell, Research in Motion or HP would buy Palm. Adding Palm handsets to the HP product line created some overlap with the iPAQ series of mobile devices but was thought to significantly improve HP's mobile presence as iPAQ devices had not been selling well. Buying Palm gave HP a library of valuable patents, as well as the mobile operating platform known as webOS. On July 1, 2010, the acquisition of Palm was final. The purchase of Palm's webOS began a big gamble – to build HP's own ecosystem. On July 1, 2011, HP launched its first tablet named HP TouchPad, bringing webOS to tablet devices. On September 2, 2010, HP won its bidding war for 3PAR with a $33 a share offer ($2.07 billion) which Dell declined to match. After HP's acquisition of Palm, it phased out the Compaq brand.

On August 6, 2010, CEO Mark Hurd resigned amid controversy and CFO Cathie Lesjak assumed the role of interim CEO. Hurd had turned HP around and was widely regarded as one of Silicon Valley's star CEOs. Under his leadership, HP became the largest computer company in the world when measured by total revenue. Accused of sexual harassment against a colleague, the allegations were deemed baseless. The investigation led to questions concerning between $1000 and $20000 of his private expenses and his lack of disclosure related to the friendship. Some observers have argued that Hurd was innocent, but the board asked for his resignation to avoid negative PR. Public analysis was divided between those who saw it as a commendable tough action by HP in handling expenses irregularities, and those who saw it as an ill-advised, hasty and expensive reaction, in ousting a remarkably capable leader who had turned the business around. At HP, Hurd oversaw a series of acquisitions worth over $20 billion. This allowed the company to expand into services of networking equipment and smartphones. Shares of HP dropped by 8.4% in after-hours trading, hitting a 52-week low with $9 billion in market capitalization shaved off. Larry Ellison publicly attacked HP's board for his ousting, stating that the HP board had "made the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago."

On September 30, 2010, Léo Apotheker was named as HP's new CEO and President. Apotheker's appointment sparked a strong reaction from Oracle chief executive Larry Ellison, who complained that Apotheker had been in charge of SAP when one of its subsidiaries was systematically stealing software from Oracle. SAP accepted that its subsidiary, which has now closed, illegally accessed Oracle intellectual property. Following Hurd's departure, HP was seen by the market as problematic, with margins falling and having failed to redirect and establish itself in major new markets such as cloud and mobile services.citation needed Apotheker's strategy was broadly to aim at disposing of hardware and moving into the more profitable software services sector. On August 18, 2011, HP announced that it would strategically exit the smartphone and tablet computer business, focusing on higher-margin "strategic priorities of Cloud, solutions and software with an emphasis on enterprise, commercial and government markets" They also contemplated selling off their personal computer division or spinning it off into a separate company, quitting the 'PC' business, while continuing to sell servers and other equipment to business customers, was a strategy already undertaken by IBM in 2005.

HP's stock continued to drop, by about a further 40% (including 25% on one day, August 19, 2011), after the company abruptly announced a number of decisions: to discontinue its webOS device business (mobile phones and tablet computers), the intent to sell its personal computer division (at the time HP was the largest personal computer manufacturer in the world), and to acquire British big data software firm Autonomy for a 79% premium, seen externally as an "absurdly high" price for a business with known concerns over its accounts. Media analysts described HP's actions as a "botched strategy shift" and a "chaotic" attempt to rapidly reposition HP and enhance earnings that ultimately cost Apotheker his job. The Autonomy acquisition had been objected to even by HP's own CFO.:3–6

On September 22, 2011, the HP Board of Directors fired Apotheker as chief executive, effective immediately, and replaced him with fellow board member and former eBay chief Meg Whitman, with Raymond J. Lane as executive chairman. Though Apotheker served barely ten months, he received over $13 million in compensation. HP lost more than $30 billion in market capitalization during his tenure. Weeks later, HP announced that a review had concluded their PC division was too integrated and critical to business operations, and the company reaffirmed their commitment to the Personal Systems Group. A year later in November 2012 wrote-down almost $9 billion related to the Autonomy acquisition (see below: Takeover of Autonomy), which became the subject of intense litigation as HP accused Autonomy's previous management of fraudulently exaggerating Autonomy's financial position and called in law enforcement and regulators in both countries, and Autonomy's previous management accused HP of "textbook" obfuscation and finger pointing to protect HP's executives from criticism and conceal HP culpability, their prior knowledge of Autonomy's financial position, and gross mismanagement of Autonomy after acquisition.:6

On March 21, 2012, HP said its printing and PC divisions would become one unit headed by Todd Bradley from the PC division. Printing chief Vyomesh Joshi is leaving the company.

On May 23, 2012, HP announced plans to lay off approximately 27,000 employees, after posting a profit decline of 31% in the second quarter of 2012. The profit decline is on account of the growing popularity of smart phones, tablets, and other mobile devices, that has slowed the sale of personal computers.

On May 30, 2012, HP unveiled its first net zero energy data center. HP data center plans to use solar energy and other renewable sources instead of traditional power grids.

On July 10, 2012, HP's Server Monitoring Software was discovered to have a previously unknown security vulnerability. A security warning was given to customers about two vulnerabilities, and a patch released. One month later, HP's official site of training center was hacked and defaced by a Pakistani hacker known as "Hitcher", to demonstrate a Web vulnerability.

On September 10, 2012, HP revised their restructuring figures; they started cutting 29,000 jobs. HP had already cut 3,800 jobs as of July 2012,around 7 percent of the revised 29,000 figure.

2013–2015edit

On December 31, 2013, HP revised the number of jobs cut from 29,000 to 34,000 up to October 2014. The current number of jobs cut until the end of 2013 was 24,600. At the end of 2013 the company had 317,500 employees. On May 22, 2014 HP announced it would cut a further 11,000 to 16,000 jobs, in addition to the 34,000 announced in 2013. "We are gradually shaping HP into a more nimble, lower-cost, more customer and partner-centric company that can successfully compete across a rapidly changing IT landscape," CEO Meg Whitman said at the time.

In June 2014, during the HP Discover customer event in Las Vegas, Meg Whitman and Martin Fink announced a project for a radically new computer architecture called The Machine. Based on memristors and silicon photonics, The Machine is supposed to come in commercialization before the end of the decade, meanwhile representing 75% of the research activity in HP Labs.

On October 6, 2014, Hewlett-Packard announced it was planning to split into two separate companies, separating its personal computer and printer businesses from its technology services. The split, which was first reported by The Wall Street Journal and confirmed by other media, would result in two publicly traded companies: Hewlett Packard Enterprise and HP Inc. Meg Whitman would serve as chairman of HP Inc. and CEO of Hewlett Packard Enterprise, Patricia Russo would be chairman of the enterprise business, and Dion Weisler would be CEO of HP, Inc.

On October 29, 2014, Hewlett-Packard announced their new Sprout personal computer.

In May 2015, the company announced it would be selling its controlling 51 percent stake in its Chinese data-networking business to Tsinghua Unigroup for a fee of at least $2.4 billion.

On November 1, 2015, as previously announced, Hewlett-Packard changed its name to HP Inc. and spun off Hewlett Packard Enterprise as a new publicly traded company. Because of this, HP Inc. retains Hewlett-Packard's stock price history and its stock ticker symbol, HPQ, while Hewlett Packard Enterprise trades under its own symbol, HPE.