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Hewlett-Packard Company

American manufacturer of software computer services. In 2015, the company was split into two companies: HP Inc. & Hewlett Packard Enterprise. The headquarters were located in Palo Alto (California).

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Table of Contents

Early growth and founding

The company was founded on January 1, 1939, by William R. Hewlett and David Packard, two recent electrical-engineering graduates of Stanford University. Frederick Terman, an engineering professor who helped to establish the strong partnership between Stanford University and Silicon Valley, was instrumental in the creation of the company. It was known for its production of high-end instrumentation. Walt Disney Productions was its first customer. They purchased eight audio oscillators for use in making the full-length animated movie Fantasia (1940). The company produced products for military purposes during World War II, which were significant enough to earn Packard a draft exemption. Hewlett was in the Army Signal Corps. The company collaborated with the Naval Research Laboratory throughout the war to develop counter-radar technology as well as advanced artillery shell fuse fuses.

Postwar growth

After the war, Packard took over the business of the company, while Hewlett managed its research and development. After a slump in defense contracts after the war, Hewlett-Packard was able to return to its prewar revenue levels in 1947 and continued its growth through product diversification. It introduced a high speed frequency counter in 1951, which was one of its most loved early products. It was used to set the signal frequencies in accordance with Federal Communications Commission regulations. Company revenues were also increased by military sales during the Korean War.

Hewlett-Packard issued public stock in 1957 to raise money for the development of new products. It also began a long campaign to expand its product range by purchasing companies. This started in 1957, the year it went public with F.L. Moseley Company was a manufacturer of graphic recorders. It was acquired by Sanborn Company in 1961, and began to rise to the top as a manufacturer of medical-instruments.Get a Britannica Premium subscription and gain access to exclusive content.Subscribe Now

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Hewlett-Packard’s 1964 instrumentation was made famous by a publicity stunt. Company engineers flew around the world with its cesium beam HP 5060A instrument to synchronize the globe’s atomic clocks to within one-millionth of a second. Four years later the company introduced the first desktop calculator. Hewlett-Packard introduced the first pocket-sized calculator in 1972 using integrated-circuit technology. Selling at one-sixth the price of the original desktop unit, the pocket calculator eventually forced the obsolescence of the venerable Hewlett-Packard HP-35 calculatorHewlett-Packard’s HP-35 calculator from 1972.Reproduced with permission from the Hewlett-Packard Company Archives

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Even though the company did not develop weapons systems, its entire history was heavily dependent on military spending. Its instrumentation was used to test and develop military products. This is especially true as electronic and semiconductor technology has become more important in weapons systems. In 1969, the U.S. Pres. Richard M. Nixon appointed Packard deputy secretary of defense, in which position he oversaw the initial plans for the development of two of the country’s most successful jet fighter programs, the F-16 and the A-10.

Computer business

The first computer by Hewlett-Packard, the HP 2116A was created in 1966 to manage company’s measurement and test devices. The company released the HP 3000 general purpose minicomputer in 1972. This product line is still in use today. Stephen G. Wozniak was an engineer intern at the company and built a prototype of the first personal computer (PC). He offered the prototype to the company. Hewlett-Packard refused to give Wozniak the rights to his invention and later, he joined Steven P. Jobs to form Apple Computer, Inc. (now Apple Inc.).

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In 1980, Hewlett-Packard released the HP-85 desktop computer. Because it was incompatible with the IBM PC, which became the industry standard, it was a failure. The next major venture into the PC market came with the HP-150, an IBM-compatible system with a touch screen. It was technically intriguing, but it failed to succeed in the market. It was actually a printer that was the company’s first product to be successful in the PC market. The HP LaserJet was launched in 1984 to great reviews and record sales. It became Hewlett-Packard’s most successful product.

Hewlett-Packard began to lose business in its core areas of engineering and science, and was forced to compete with other computer workstation companies like Sun Microsystems, Inc., Silicon Graphics, Inc., or Apollo Computer. In 1989 Hewlett-Packard bought Apollo to become the number one workstation maker, a position it shared on and off with Sun and later Dell Inc.

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The stock price plunged sharply when the company failed to meet certain revenue and profit targets in the 1990s. Packard resigned to manage the company. Its PC group, which was not performing well, saw the most drastic changes. The introduction of colour printers, new computers and low-priced peripherals made it one of the top three PC manufacturers in the world. After the company’s turnaround was complete in 1993, Packard retired once more. Hewlett-Packard was one of 30 companies whose stock prices make up the Dow Jones Industrial Average on the New York Stock Exchange. The company spun off its medical, electronic components and measurement businesses in 1999 as Agilent Technology. However, it retained most of the common stock until 2000. Hewlett-Packard also collaborated with Intel Corporation (an integrated circuit manufacturer) during the 1990s to design the 64-bit Itanium microprocessor. It was introduced in 2001.

Hewlett-Packard grew its global operations in the 2000s by opening research labs in Bangalore, India, Beijing, China, and St. Petersburg in Russia (2007). These laboratories joined a list that also included facilities in Bristol, England (1984), Tokyo (1990), and Haifa (Israel (1994).

Hewlett-Packard acquired the Compaq Computer Corporation, a major American PC manufacturer, in 2002. The move, made at the urging of the recently hired chief executive officer (CEO), Carly Fiorina, the first woman to lead a company listed in the Dow Jones, was bitterly opposed by some members of the company’s board of directors and certain major stockholders, including Walter Hewlett, son of the company’s cofounder. In 2005, the supposed benefits of the merger didn’t materialize and she was forced to resign. The company quickly turned its financial situation around and Hewlett-Packard was the first technology company to surpass $100 billion in sales revenue in a fiscal year in 2007. This followed an IBM revenue record the year before.

Fiorina was succeeded as CEO and president, by Mark Hurd. Hurd had previously been CEO of NCR Corporation. In 2006, Hurd was promoted to the position of chairman. The company launched a strategy initiative to expand into mobile computing during Hurd’s tenure. Hewlett-Packard purchased Palm, Inc., an American maker of smartphones and personal digital assistants (PDAs), in 2010. Although Palm was not a leader in the highly competitive smartphone market, analysts considered webOS, the multitasking operating system known as webOS (a “next-generation” successor to Palm OS) to be an important system for smartphones. The acquisition would complement Hewlett-Packard’s two lines of iPAQ

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smartphones, one for business users and one for consumers, that ran Microsoft Corporation’s Windows Mobile OS.

After a scandal involving questionable relationships with a contractor, Hurd was forced to leave the company in 2010. Leo Apotheker was appointed his replacement, having been the CEO of German software giant SAP. In August 2011 Hewlett-Packard announced that it would discontinue making smartphones and its tablet computer, the TouchPad (which had debuted only seven weeks earlier in July), and that it was considering spinning off its PC business into a separate company. Hewlett-Packard will now concentrate on software and business services. It acquired Autonomy Corporation, a British software company, for $11.1 billion. Meg Whitman (a board member who was previously CEO of eBay’s online auction site) replaced Apotheker as CEO in September 2011. Hewlett-Packard in November 2012 accused Autonomy’s management, through “accounting errors,” of inflating its value and announced that it would reduce Autonomy’s value by $8.8 Billion.

Hewlett-Packard was split in 2015 into two companies: HP Inc. which manufactured personal computers and printers and Hewlett Packard Enterprise which offered products and services to businesses.

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Approach to management

The two founders supported formal management practices early in the history of Hewlett-Packard. Hewlett-Packard was the first corporation to adopt the “management by objectives” approach. They created an informal workplace and encouraged employees to use their first names, even for themselves. Hewlett and Packard were known for their “management by walking around”, visiting as many departments and companies as possible without scheduled meetings or appointments, and speaking with employees as much as they did with managers to gain a better understanding of the company’s operations. Hewlett-Packard was the first American business to support the notion that customers, employees, and the community all have a valid interest in the company’s performance. It was consistently ranked as one of the top places to work for minorities and women. It was also a major contributor to charities, giving away as high as 4.4 percent its pretax profits.

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