Even with all the product releases around Big Data, or signs that HP is finally beginning to integrate Autonomy technology into its portfolio, one event that everyone was waiting to see, and maybe even looking for inspiration from, was the keynote speech by CEO Meg Whitman.
Whitman’s HP Strategy
It’s not often that a CEO has to address the troops and customers with the bag of troubles Whitman has been pulling around with her since she took over — and one that seems heavier every financial quarter — but she pulled it off well. While things are no better than they were last week, she did demonstrate a sense of purpose in the ailing giant that hasn’t been there for a while.
The bottom line, she said, is that HP is going to stay the path that she had taken when she took over: HP is sticking with Autonomy; HP will keep developing its printer division; it has a clear Big Data strategy.
In sum, she said, HP will spend the next 12 months focusing on commercializing innovation. If this sounds a little familiar, then readers might recall that IBM went through some serious difficulties about ten years ago and had to do the same.
HP’s situation is not unique. All this has happened before, and there’s nothing like stressed investors to give a company a financial kick in the pants when it’s not performing.
That it has not been performing is, firstly, no reflection on Meg Whitman, who only took over a company 18 months ago in the throes of its worst existential crisis since it was formed in 1937, and secondly, any reflection on its cash position, which still remains strong.
The problem is how to move forward, and retain the value that remains after everything that has happened in recent times. The basic solution, it seems, is just to keep doing what it's doing — keep developing its existing IT portfolio, and invest in innovation.
Whitman wasted no time in getting down to business when she took to the stage yesterday. She knows customers and employees are concerned, especially in light of the recent Autonomy US$5.5 billion write-down.
It's been quite a year, not much going on at all…” she quipped. No one laughed. “Holy smokes”, she said, in response to the silence, “It’s been a challenging year”.
That was better and something that everyone could get their teeth into. It has been a challenging year for HP, and they were there to hear how Whitman proposes to deal with it.
Both customers and employees were looking to know when the fooling-around will stop and when HP will get back to being an IT giant again where people will talk about infrastructure, and technology integrations rather than financial write-downs.
Whitman is aiming to do that sooner rather than later. Her speech stressed HP’s long history of customer relationships and trust. She talked about the founder-DNA of the company that is just about impossible to kill off, a reference to Bill Hewlett and Dave Packard its legendary founders.
This was the kind of thing the audience wanted to hear. She talked about the financial strengths of the company, which on a cashflow basis is still one of the biggest companies in the world, even if the PC business is not what it was and the Autonomy financial issues are still to be resolved.
The bottom line, she insisted is that the financial position of HP is better than recent media coverage might suggest, and will get better if it pursues the policy of commercialization of technology.
HP’s Wider Market
There is, of course the wide market and wider market problems, which Whitman also addressed.
It is the engine that powers the enterprise and often redefines the enterprise when all these changes are taking place…What's emerging out there in my view is an entirely new style of IT. This new style is driven by cloud and by big data. This new style of IT promises lower cost, and increased agility…," she said.
HP’s strategy in the face of this is “quite simple”. It entails providing solutions for this kind of IT, some of which we have already seen over the past couple of days. “We'd like to engage with you to provide the business outcomes you need and frankly require in the coming years,” she added.
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