HP's Whitman vows to bring the swagger back
CEO pledges to channel partners to bring company back to normalcy
In her first address to Hewlett Packard channel partners at the just ended Global Partner Conference (GPC), Meg Whitman, president and CEO pledged to return the number one PC vendor to normalcy, following a tumultuous 2011.
The promise came as Whitman, who has been in her new role for just over six months, acknowledged that HP channel partners had been through a lot in the past year. Whitman vowed to make it up to channel partners by steering HP back in a drama-free direction going forward.
"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 channel 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. Together with you our channel partners, we have to get our swagger back."
Whitman said her first big decision as CEO, keeping HP's PC-making Personal Systems Group (PSG), helped her to understand the significance of hardware in HP's corporate distinctiveness. The PSG uncertainty created in August last year was a major issue for the channel, but Whitman aims to remain focused on hardware even as HP looks to build its software business.
She said IT infrastructure is the core of HP's DNA, with majority of HP revenue coming from servers, printers, storage, PCs and workstations.
"About 70% of our revenue comes from hardware. It's the core of who we are," Whitman told delegates. "We shouldn't feel ashamed of who we are. We need to stand up and be proud to be a hardware and infrastructure company. We are not in the software business to transform ourselves into a software company."
One vital hardware product HP lacks at the moment is a tablet. But despite the head start that Apple and Google have attained in mobility, Whitman isn't ready to concede the market just yet. In fact, Whitman suggested that WebOS, which is currently an open source project slated for launch this September, could be a dark horse in the mobile market.
"Apple is doing great and they are on fire at the moment. But is it is a closed system. Android may end up being a closed system, too following the Motorola acquisition. It's remarkably fragmented," Whitman noted. "I think there is an opportunity for another OS that relies on the creativity and innovation of the developer community. We're going to be very patient. This could be something that, over the next couple of years, impacts HP and the entire industry."
Whitman said she doesn't expect to make any big acquisitions this year and will instead increase HP's internal innovation. HP spent $3.2 billion on R&D, which translates to 2.5% of annual revenue in fiscal 2011, and Whitman said that figure is going to increase considerably.
"We're going to double down on research and development (R&D) spending in every single decision of this company," she said. "I believe that if we don't invest in technology, we aren't doing our jobs as a technology manufacturer."
Whitman said she also intends to bring HP Labs closer to the business units. "I want that group to be a little bit more commercial and closer to each business unit within our organisation," she said.
Whitman is piloting a return to the traditional unrestricted culture at HP, and also made clear that she held her executive team in high regard.
That team, which Whitman brought onstage at GPC, consisted of Todd Bradley, executive vice president of HP's $40 billion PSG; Dave Donatelli, executive vice president and general manager of HP's $59 billion Enterprise Servers, Storage, Networking (ESSN) and Technology Services businesses; Vyomesh Joshi, executive vice president of HP's $26 billion Imaging and Printing Group (IPG); Bill Veghte, who is holding two positions as HP's chief strategy officer and executive vice president of HP's $3.2 billion software business; and Mike Lynch, co-founder and CEO of Autonomy and head of HP's new Information Management (IM) division.