After HP’s recent shareholder meeting and recent downgrade by Goldman Sachs, HP announced changes to the Company’s board of directors.

According to HP, Raymond Lane has decided to step down as chairman of the board, to be replaced on an interim basis by Ralph V. Whitworth. The board is commencing a search for a permanent nonexecutive board chairman.  Ray Lane has been the target of shareholders in HP’s recent corporate governance debacles.

John H. Hammergren and G. Kennedy Thompson have decided to leave the board. Both directors will continue to serve until the May board meeting. The board is commencing a search for two or more new independent directors.

“After reflecting on the stockholder vote last month, I’ve decided to step down as executive chairman to reduce any distraction from HP’s ongoing turnaround,” said Lane. “Since I joined HP’s board a little over two years ago, I’ve been committed to board evolution to ensure our turnaround and future success. I’m proud of the board we’ve built and the progress we’ve made to date in restoring the company. I will continue to serve HP as a director and help finish the job.”

“Ray, John and Ken are terrific leaders, and they’re passionate about doing the right thing for HP,” said Whitworth. “From here we will continue to recruit outstanding directors, strengthen our governance and do the best we can—the best we know how—for stockholders. Meg is leading a Herculean turnaround, so most of all, we must build and maintain the best possible leadership structure for Meg and HP’s entire team to succeed.”

“Ray, John and Ken have invested a part of themselves in HP,” said Meg Whitman, HP president and chief executive officer. “Their leadership is reflected in the early success we’ve had turning the company around. I’m grateful that Ray will continue to serve, and I wish John and Ken the very best. I also appreciate Ralph’s willingness to increase his responsibilities during this transition.”

With Lane stepping down as executive chairman, the role of lead independent director, currently held by Rajiv L. Gupta, is no longer necessary and will be eliminated. Gupta will remain on the board and will replace Thompson as chairman of the Audit Committee.

HP is going through their turnaround as Meg Whitman continues to move fast on setting the new tone. According to Dave Vellante, of research firm Wikibon.org, HP has a fantastic opportunity in the new software-led infrastructure.

Vellante is optimistic. He notes that HP’s stock rose by 50 percent in the past few months alone, and Vellante further explains why he thinks Whitman will reach her goals in less than five years:

“I think that the prospects for turnaround are very very good for the following reasons: One: HP’s customers do want it to win, it has a very loyal customer base and HP does a good job servicing customers. HP throws off cash which is critical in this case as it’s burdened by $20B in long term debt it needs to service and pay down. Now it’s saddled by some debt, it’s got over $20 billion in long term debt it gotta pay that down. Whitman made clear during a short discussion with her, “ the top priority is to pay down that debt, more critical than stock buybacks or potential acquisitions.”

Another thing Vellante found notable was that HP’s executives were very forthcoming about Autonomy. The company recognized it overpaid and, more surprisingly, actually managed to turn the UK-based analytics firm into a genuine asset. Vellante’s final thought was his view that HP’s future success will hinge on its software investments.

On the innovation front HP is having a big annoucement on Monday in NYC dubbed Moonshot 2.  Another major hint as to what’s behind HP’s curtain was leaked by none other than CEO Meg Whitman during the company’s first quarter earnings call last month.

“Later in the second quarter, we will be bringing the latest innovation from HP Labs and our Enterprise group to market, the first, commercialized product from our Project Moonshot. We expect this to truly revolutionize the economics of the data center with an entirely new category of server that consumes up to 89 percent less energy, 94 percent less space and 63 percent less costs than our traditional x86 server environment.”

The first production-grade Moonshot box that Whitman mentioned is the same one that the company started shipping  a few weeks ago. It’s almost certainly the product that HP plans to unveil next Monday, but we won’t know for sure until the keynote.

While HP is laying the ground for its entry into the hyperscale market, major hardware suppliers are already busy competing for market share. In a February article, Wikibon founding CTO David Floyer discussed how Intel and Fusion-io are positioning themselves on the long run. 

See Vellante’s full analysis below: