PALO ALTO, Calif. ( TheStreet) -- HP's ( HPQ) new CEO Léo Apotheker has vowed to make the tech giant's software business a top priority, and also believes that the computer and server maker is currently undervalued.

"HP is grounded in the hardware business," he said during a conference call with analysts on Friday. "I bring to HP an asset that that HP is less grounded in, and that's software."
Leo Apotheker
Leo Apotheker, HP's new CEO

Apotheker, a 20-year veteran of German software giant SAP ( SAP), also highlighted his experience in "value-added services," but software was a recurring theme during the conference call.

"I believe, and the management believe, that HP should be more valuable than the sum of its parts," he added. "We all believe that software is the glue to make that happen."

The former SAP CEO would not reveal specific details of his software strategy, but he is widely expected to bolster HP's OpenView systems management product against rival IBM's ( IBM) Tivoli offering.

HP has already lauded Apotheker's software track record. In a statement released after the market close on Thursday, HP explained that he helped lead SAP to 18 consecutive quarters of double-digit software revenue growth.

Apotheker, however, now faces the challenge of inspiring HP investors. HP's stock has fallen more than 20% this year, thanks partly to the shock departure of former CEO Mark Hurd following an expenses scandal. Hurd, who was credited with turning HP's fortunes around, was something of a Wall Street darling, and earned plaudits for his tight expense control.

At least initially, investors have been largely underwhelmed by HP's new CEO hire. The tech bellwether's stock was down $1.04, or 2.47%, to $41.03 shortly after market open, despite a modest gain in tech stocks that saw the Nasdaq rise 0.63%.

"I happen to believe that HP is a company with a lot more value than is currently attributed to it," said Apotheker, during the conference call, highlighting HP's strong balance sheet, properties and people.

HP exited its third quarter with cash and investments of $14.8 billion and has also been on something of an acquisition tear recently, buying security specialist ArcSight ( ARST) for $1.5 billion and out-muscling Dell ( DELL) for storage maker 3Par. ( PAR)

Apotheker, a German national who is said to be fluent in five languages, also highlighted his international experience as a big plus for HP.

"One of the abilities that I have is that I am a global citizen," he said. "HP is very focused to expand its markets; we want to expand faster in the emerging markets."

Overseas sales accounted for $16.5 billion of HP's total revenue of $30.7 billion during the third quarter, although the company clearly wants to grow this figure.

Apotheker's appointment has nonetheless raised some eyebrows, with critics describing the hire as a missed opportunity.

After weeks of speculation that HP would promote an internal candidate or bring in a heavy hitter such as IBM ( IBM) software supremo Steve Mills, the tech giant instead opted for Apotheker, whose brief tenure as SAP CEO ended earlier this year.

Ann Livermore, head of H-P's $54 billion enterprise business, had been touted as potential successor to Hurd, along with HP storage chief Dave Donatelli. Todd Bradley, the VP who runs HP's personal computer business, and the company's printer boss Vyomesh Joshi had also been mentioned as likely internal candidates.

"We cast our net very far and very wide -- we had lots of candidates," said HP director Bob Ryan, during the call with analysts. "We ended up with about six that we thought could have done this job -- Léo came out as the best, and the only one that we offered the job to."

What do you think about the appointment of HP's new CEO Leo Apotheker?

It's a missed opportunity. Apotheker is not the man to fill Mark Hurd's shoes.
It's shrewd; Apotheker's international knowledge and software know-how is what HP needs.
It's too early to tell.

--Written by James Rogers in New York.

>To follow the writer on Twitter, go to http://twitter.com/jamesjrogers.

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