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Léo Apotheker: Will software salesman measure up as HP CEO?

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(Read caption) In this Jan. 27 file photo, Léo Apotheker, then CEO of German software company SAP, speaks in Frankfurt, Germany. Hewlett-Packard on Thursday named Mr. Apotheker as its new CEO.

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Hewlett-Packard has raised more than a few eyebrows with its pick for a new CEO: a sophisticated German-born Francophile now in charge of an American corporate icon founded in a garage.

On many levels, Léo Apotheker is a surprise pick by HP, which announced the appointment Thursday. As an executive and eventually CEO of German software giant SAP, he spent his career in software sales. HP is still mostly a hardware company, known for personal computers and printer cartridges.

Although successful in turning around SAP's US operations in 2002, Mr. Apotheker abruptly resigned this past February amid concerns that the company was foundering. At HP, he replaces a CEO whose company was succeeding swimmingly but whose personal missteps caused his downfall.

Nevertheless, as a signal of where HP wants to go, Thursday's announcement makes more sense. Following the lead of IBM, hardware companies are eager to develop a thriving software-services business. That industry could see explosive growth, especially if companies move to what's known as cloud computing.

In cloud computing, businesses don't own the computers that run all of their software. Rather, they buy software services from another company that not only takes care of tweaking and upgrading the programs, it owns and runs the computers, too. HP is already selling cloud computing services to corporations and experimenting with the idea of harnessing the computing power of disparate large-scale data centers and tying them together seamlessly.

To thrive, however, HP needs to become a much bigger player. Can Apotheker lead HP into that future?

“Léo has been a leader in anticipating the transformation taking place in our industry, and we believe he is uniquely positioned to help accelerate HP’s strategy," Robert Ryan, lead independent director of HP's board, said in a statement. “After more than two decades in the industry, he has a strong track record of driving technological innovation, building customer relationships and developing world-class teams.”

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