Dell’s Haas as Turnaround Boss Honed Profit-Lifting at HP – Businessweek

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By Aaron Ricadela September 11, 2013

Marius Haas during the Dell Enterprise Forum, on June 2013, San Jose, California. Courtesy Dell

When Dell Inc. (DELL:US) President Marius Haas was still a rising executive at Hewlett-Packard Co. (HPQ:US) in 2005, his new boss Mark Hurd entrusted him with a critical task: unearthing sales weaknesses and inflated costs.

Haas obliged, arming Hurd with candid information that spawned a flurry of cost-cutting and sent Hewlett-Packard on a five-year run (HPQ:US) of soaring profits and shares.

“He was the first guy I ran across who tried to convince me how the place actually ran — and how it didn’t run,” Hurd, who was Hewlett-Packard’s chief executive officer from 2005 to 2010, said in an interview.

VIDEO: Michael Dell Poised to Clinch $24.9B Buyout

Improving Hewlett-Packard under Hurd was easy compared with the task Haas now faces as the executive in charge of the $13 billion-a-year enterprise-technology business at Dell, which is poised to be taken private in a $24.9 billion deal that shareholders will vote on tomorrow.

Haas, 46, was hired a year ago by founder and CEO Michael Dell to run the company’s enterprise server, storage and networking business. His group is central to Dell’s plan to transition from PCs, a dwindling business whose operating income (DELL:US) dropped 71 percent in the most recent quarter.

Instead, the Round Rock, Texas-based company wants to be a key supplier of computer systems that can power consumer websites, run complex data analysis and underpin financial applications that businesses depend on. Most of these products fall under Haas’s bailiwick.

Enterprise Challenges

The shift won’t be easy. While PC revenue shrinks, Dell’s enterprise-computing business has struggled to gain ground after spending $13 billion on 20 acquisitions (DELL:US) since 2009 that have borne little fruit. Competition in the field is vicious, with rivals including Cisco Systems Inc., Hewlett-Packard, International Business Machines Corp. and EMC Corp. able to outgun Dell with their breadth of products.

Standard & Poor’s downgraded Dell’s corporate credit rating four levels to BB- from BBB today, citing concern that the CEO’s buyout would create a more leveraged capital structure and diminished free operating cash flow, hampering the company’s ability to invest in new businesses and technologies.

Haas said he’s trying to transform Dell into a partner that businesses can count on for every technical aspect of a project — not just a supplier to customers’ procurement departments.

“Enterprise-class clients are realizing Dell is a formidable player,” Haas said in a recent interview. “In the past we were not in consideration.”

Founder’s Backing

Haas, who was born in the Dominican Republic and has lived in Holland, Honduras, Venezuela, South Africa and Mozambique, has some assets to lean on. His group has been a rare bright spot at Dell, whose estimated net income (DELL:US) of $1.11 billion this year is less than the company’s profit in 1999, when revenue was less than a third what it is now. Sales in Haas’s enterprise solutions group rose 7.7 percent to $3.3 billion in the fiscal second quarter, and networking revenue increased 19 percent.

The executive, who speaks Dutch, English and Spanish, has the backing of Michael Dell, who hired him from private equity firm KKR & Co.

Haas has “quickly jumped in to lead the development of our enterprise strategy and done a fantastic job in a difficult economic environment,” Michael Dell wrote in an e-mail. “He’s assembled a great team that is really firing on all cylinders.”

Keeping Tabs

Haas’s parents were born in Asia and were interned as children in Japanese prison camps in their native countries during World War II. His father’s job at a Dutch shipping company meant the family moved around the world, and Haas arrived in the U.S. by way of a Connecticut boarding school after the Venezuelan currency collapsed in 1983. He went on to earn degrees from Georgetown University and Thunderbird School of Global Management before carving out a career in strategy and business development at Intel Corp. (INTC:US) and Compaq Computer Corp.

He landed at Hewlett-Packard when it bought Compaq in 2002, working on acquisitions and later managing the networking group. One big job: handling the difficult integration of Hewlett-Packard’s $13.9 billion purchase of Plano, Texas-based Electronic Data Systems Corp. in 2008, which involved absorbing 135,000 people, said Shane Robison, CEO of Fusion-io Inc. and Haas’s former boss.

via Dell’s Haas as Turnaround Boss Honed Profit-Lifting at HP – Businessweek.