Meg Whitman Brings the Swagger Back to Hewlett-Packard

By Jeff Jedras, itbusiness.ca    Feb 17, 2012 5:57 am

After a tumultuous year for Hewlett-Packard Co. (NYSE: HPQ), new CEO Meg Whitman brought the vendor back to its roots and delivered the messages channel partners wanted to hear in her keynote at the global partner conference Wednesday: HP is proudly a hardware company first and foremost, and its primary route to market will be through the channel.

Whitman took the helm at HP in September afterformer CEO Léo Apotheker led the company through a period that saw a major re-focus on software with the US$10.3 billion acquisition of Autonomy, and the future of the personal systems group thrown up in the air with a strategic reviewthat could have led to the sale or spin-off of the business unit.

With her first chance to formally address HP partners, Whitman wasted no time addressing the challenges of the past year for the vendor and its partners and reaffirming its commitment to the channel and the strategy going forward.

"Last year we maybe didn't make it (the best) in our long relationship, and we recognize you had some issues to deal with. The (PSG) announcements last August created confusion about what's going on, and if you could count on HP," Whitman told partners. "I think it just made things more challenging.

When she took over Whitman said she thought the most important thing she could do was end "the noise" and create some stability, and be a steady hand on the tiller for HP.

"What I wanted to do was get HP out of the headlines for the drama, and get us into the headlines for our products and for the work we do with customers and partners," said Whitman. "Let's really focus on what makes HP great. I want to re-establish HP's reputation for being the reliable trusted partner you can count on to build your business with you."

The first major decision Whitman had to tackle was the uncertain future of the PSG business, and she said she recognized the decision had to be accelerated to end the uncertainty as soon as possible.

"I came to the obvious conclusion that HP PSG and you are better together than we are apart, and I feel great about that decision," said Whitman.

And in a further repudiation of Apotheker's strategy, Whitman put hardware back at the forefront of how HP sees itself and how it goes to market. Infrastructure is the core of HP's DNA, she said, with 70 per cent of HP revenue coming from servers, printers, storage, PCs and workstations.

"That's the core of who we are and we should stand up and be proud of that. We're a proud hardware company and we want to stand tall with you," said Whitman. "Everything else we do builds and amplifies that opportunity."

The core strategy for HP as articulated by Whitman is to remain the largest provider of IT infrastructure, software, services and solutions for individuals of all sizes. While Whitman said clearly that HP is "in the software business to help you solve tough customer problems ... not to transform HP into a software company," HP does see value in layering software and solutions on top of its hardware infrastructure to tackle challenges in areas such as big data and cloud computing. She also announced a doubling of HP's spending on research and development across all business units as part of a new commitment to organic growth and innovation.

"HP is coming back strong after a rough 2011," said Whitman. "We've got our swagger back, and we hope you do too. Let's go out and sell with confidence, together."

HP partners had high expectations for Whitman and David Reid, president of Winnipeg-based HP partner Epic Information Solutions, came away as impressed with her personality and demeanour as her messaging.

"She seems like a very grounded, wholesome person, and that's something HP hasn't had in the CEO role for quite some time," said Reid. "I think she's someone who is going to do what she says, and what she said really resonated with me. I'm looking forward to seeing the results."

Reid said he was also pleased to see Whitman bring clarity to HP's strategic focus after several confusing years for partners around just where the vendor wanted to go.

"In the last couple of years it's been very unclear if HP was trying to be a services company or a software company, and what happened to the hardware focus?" said Reid. "Having her state clearly that HP is at its core an infrastructure business and will be for the foreseeable future was good. I hope that translates to bringing more products to market faster."

Re-affirming HP's commitment to infrastructure, which most partners would consider their core business, was absolutely the right move agreed Paul Edwards, research director with the London, Ont.-based InfoTech Research Group. But he liked that she also brought the importance of the software piece into the overall picture.

"It's something I was looking for, even though last year they were full-hog toward software and leaving hardware behind, and for awhile at this event they did the opposite," said Edwards. "HP is a solutions-based company, not just a hardware company. I think they have a good balance and good portfolio across hardware, services and software, and what they have to focus on is bringing that all together for the partner, and enabling them to really have those conversations and make those sales."

Follow Jeff Jedras on Twitter: @JeffJedrasCDN.