Arik Hesseldahl

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What’s Behind Todd Bradley’s Move at HP?

The unexpected shift of Todd Bradley from leadership of Hewlett-Packard’s $60 billion Printing and Personal Systems Group has, at first glance, all the markings of the kind of change that would have Bradley preparing for a move outside the company. There have been persistent rumors that Bradley may be talking about a role, perhaps as CEO, at Dell.

Sources familiar with the situation and thinking behind the move tell AllThingsD that Bradley has told HP CEO Meg Whitman, “firmly and emphatically,” that he has not been contacted by Dell.

This view has been confirmed by sources at Dell, who say there is “no job” for Bradley at that company.

The speculation is understandable. Bradley is a respected senior executive who was once CEO of Palm and has been considered a favored candidate for HP’s top job no fewer than three times. During the period when former CEO Léo Apotheker was planning to spin out HP’s PC operations, it was hard to find people betting that Bradley wouldn’t be its CEO. At one time, he was even on the list of candidates to replace Paul Otellini at Intel. The challenging business conditions at Dell — on its way to a $24.4 billion leveraged buyout on which shareholders will vote next month — might represent, some would argue, the perfect opportunity.

Here’s how the rumor — presented now only because, even untrue, it makes a certain amount of sense — breaks down: Bradley might have been in line to be CEO of a newly private Dell, while Michael Dell would return to his role as chairman, which he held from 2004 to 2007. Bradley’s new title at HP — executive VP for Strategic Growth Initiatives — is the sort of nebulous post that occasionally is given to an executive who is short-timing it. It might appear to be something along the lines of the “iffy” product-innovation role that Jon Rubinstein had after he stepped back from running HP’s now-defunct webOS unit, the job he held until he left HP for good last year.

But, on its face, there is nothing “iffy” about Bradley’s new gig, sources tell AllThingsD. HP’s channel relationships — the business it does through a global network of resellers, who in turn sell HP products and services directly to businesses — have been badly frayed in recent years.

It’s a crucial segment, making up as much as 70 percent of HP’s business overall. Channel sales account for about 80 percent of HP’s sales in the Printing and Personal Systems Group, and about 60 percent of sales in the Enterprise Group. Bradley’s brief will be to repair those relationships, especially in China. “Frankly, Bradley has relationships there that Whitman doesn’t have,” said one source familiar with HP’s operations. “If there’s anyone who can do the work to get the channel back on track, it’s Bradley.”

Yet there’s another potentially important clue: HP’s announcement doesn’t name any executives reporting to Bradley in his new role — only that he will be reporting directly to and working with Whitman.

One source familiar with the company’s plans said that will change soon, and Bradley will name key lieutenants in the new effort in the coming weeks. “He will be able to reach across the organization,” one person said. “He doesn’t need many folks to accomplish anything.”

The source also described growing pressure on Bradley and other executives within the Printing and PC unit to show results, despite what has turned out to be a historically bad period for PC sales in particular, one that will eventually lead to a significant retrenchment. In its most recently quarterly filings, HP’s PC unit reported a 21 percent year-on-year decline in sales, from $9.2 billion to $7.3 billion, and saw its profit margin drop from 5.6 percent to 3.3 percent.

“The pressure on Bradley from Meg has been at an all-time high,” one source said.

Bradley didn’t immediately respond to messages.

Whitman said in an interview with AllThingsD last week that she’s happy about the stabilization that has taken place in the printing business in the last year. Printing revenue, at $6 billion, was essentially flat versus last year, while profit margin rose from 13 percent last year to nearly 16 percent. Bradley took over printing from its previous head, Vyomesh “VJ” Joshi, as the result of a significant restructuring in March of 2012.

Whitman is said by sources to want a set of “fresh eyes” on the personal computer business. That’s where Dion Weisler comes in. Currently heading up HP’s printer and PC sales for the Asia, Pacific and Japan region, he has 23 years of IT industry experience running Asian business units for Acer and Lenovo. However, despite that history, he’s considered a bit of an unknown, and has been suddenly elevated to the very top of HP’s operating structure. His role will include a seat on HP’s Executive Council, the most powerful and senior set of executives within the company.

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