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DAY 3 – Whitman claims HP has got its swagger back

by Stuart Wilson, Wednesday 15 February 2012

Meg Whitman, president and CEO at HP
Meg Whitman, president and CEO at HP

Most CEOs hit the stage on day one of a global partner summit to lay down the strategy and enable other executives to stay ‘on message’ for the rest of the conference. The 3,000-plus delegates at HP’s global partner summit in Las Vegas had to wait until day three to hear from Meg Whitman,president and CEO at the vendor giant. Whitman made the right pro-channel noises during her keynote this morning and the clarity of her message was applauded by partners. Chuck in some comments about taking on the ‘big dog’ in the networking space and an interesting view on Android and you had a pretty entertaining session. Here’s the www.channelemea.com highlights.

Whitman said: “Our portfolio looks terrific with lots of great innovation. The thing I knew coming into HP was how important the channel is to the company. We have more than 200,000 partners worldwide…Channel partners drive a very significant share of hardware and supplies revenues for HP.”

The pro-channel message was well received with Whitman adding: “Our number one competitive advantage in the industry is our channel.”

Whitman did not shy away from addressing the issues that HP faced last year with the departure of former CEO Leo Apotheker and the uncertainty created by its announcements regarding the future of PSG.

“Maybe last year we didn’t make the relationship [with partners] as easy as it could be,” admitted Whitman. “The announcements last August caused confusion. People were asking who is HP? Can we count on HP? We made things more challenging for our partners.”

“When I started as CEO I wanted to get the noise out of the system and create some stability. We wanted to get HP out of the headlines for drama and in for technology and what makes HP great,” she added. “It was important to re-establish HP’s reputation as a reliable and trusted partner that the channel can count on to build their businesses.”

“The PSG announcement last August – boy that created a lot of uncertainty in the market,” she stated.

Whitman used her keynote to emphasise HP’s commitment to fresh thinking and continued innovation across the company.

“There are two kinds of innovation: evolutionary and revolutionary. I think the ESSN business unit is well on the way towards revolutionary changes in the industry,” she said. “IPG will later this year start to offer partner managed print services. We are also increasing the R&D spend in IPG and this [unit] should be a big part of a partner’s business.”

Whitman offered no concrete information on HP’s long-term plans in the tablet and smartphone space, but did make specific reference to the future of WebOS. She also made a bold prediction concerning Android.

“We decided to contribute WebOS to the open source community and this will take three to four years to play out," said Whitman. "I think there is room for another operating system. iOS is great but it is a closed system. I think that Android may end up as a closed system because of [Google’s] relationship with Motorola.”

HP has made it crystal clear at this week’s conference that it is proud of its hardware business – from high-end infrastructure to PCs and printers – and is keen to make the most of the business opportunities that stem from its strong market position.

“The core of HP, the DNA of HP is infrastructure. Some 70% of sales are from hardware. We are proud to be a hardware and infrastructure company. We are in the software business to solve tough customer problems. We do not want to transform HP into a software business,” said Whitman.

“HP wants to stand for solutions and do four things exceptionally well: converged infrastructure, information optimisation, security and cloud,” she added.

HP’s commitment to the indirect channel remains as strong as ever and it was a point that Whitman continued to reinforce throughout her speech. “HP has had a partner-centric model for more than 30 years,” she declared. “We’re continuing the investment in Partnerone and Serviceone and increasing MDF for channel partners.”

“I love the channel. I get what you do and appreciate the importance of what we do together for customers. We’re coming back strong after a tough 2011 and we’ve got our swagger back. HP’s back so let’s sell with confidence and beat the competition and make 2012 the best year ever,” rallied Whitman.

In the networking space, HP’s message to another major vendor was clear.

“One of the great things is to be the disrupter and not the incumbent. We can be faster, better and cheaper than the ‘big dog’ can be in the networking business. Hopefully, in the next few years HP will have a much bigger role in networking,” said Whitman.

For partners worried that the transition to cloud would eventually lead to the disintermediation of the channel, Whitman had a reassuring message.

“My view is that things change very slowly. The partner opportunity is to get ahead of the curve where you take over the cloud and serve your customers. I see no reason for disintermediation. Partners can be the interpreter acting as the trusted adviser for customers on how the cloud works best in their business. Partners can show customers the way,” she said.

CE ANALYSIS: There was a positive reaction to Whitman’s speech and HP was keen to demonstrate its stability to channel partners. What is clear is that Whitman has steadied the ship in her five months at the helm and the value of that should not be underestimated.

Despite this, some questions remain unanswered – especially regarding the long-term future of PSG and HP’s role in the tablet and smartphone space.

I’m not sure I agree just yet that HP has got its swagger back, but it’s steady on its feet, walking tall and has come a long way from the punch-drunk staggering of August 2011.


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