Global CIO: Hewlett-Packard's New CEO: The Top 10 Challenges
They include forging a new product strategy, focusing on transformation, spotting hot new markets, maybe dumping PCs, and not getting obsessed with "the HP Way."
3) Competitive Differentiation: how does HP stack up? You're in a lot of product and services areas, and that can be a good thing. Your predecessor thought it was the only thing, but I'm not so sure that's how customers view the world. In what areas does HP blow away its competitors—not just in your marketing materials, but deep in the hearts and minds of your customers? What capabilities do they value most highly? And how do those evaluations line up versus your product lines, your M&A plans, your R&D strategy?
Where are the biggest opportunities for HP in 2011 and beyond? Here's my list, and other than the first one being the top priority, the others are in no particular order: fixing the 80/20 IT spending ratio; optimized systems; private clouds; the mobile enterprise; predictive analytics; and real-time business.
For 80/20, your EVP Tom Hogan's created a compelling new strategy that addresses this CIO-crippling problem head-on.
For mobile, you've got Palm and Web OS, and . . . well, some poorly defined possibilities. You need to clarify this muddle, declare to the world how and why HP will be indispensable to the mobile enterprise, and connect that with your unique companywide value proposition.
For predictive analytics: your predecessor seemed uncomfortable with this topic. You've got to be bullish with it because the answers and insights these technologies promise will determine in large part the success or failure of your customers.
Private clouds: you guys were out in front with concepts like "Everything as a Service" but it's often hard to know just what HP's cloud strategy is. Should this be a new business unit, or is it more a set of capabilities spread across your product lines? Is it a part of Technology Services? These questions need to be addressed quickly because the answers have broad implications internally and, even more important, among your customers.
Optimized systems: You're in danger of getting trapped in no-man's land here. Customers seem to be showing a strong demand for this highly integrated and purpose-built machines, and your competitors appear to have a huge jump on you: Larry Ellison's basing Oracle's entire strategy around Exadata and related machines, and IBM is also moving to expand in this rapidly growing field that offers customers extremely powerful new systems while also getting them out of the tinker-assemble-tune business they've begun to hate. You need to declare your intentions here—if you opt out that's a huge risk, and you'll need to say why. Or, if you're in, then don't dawdle—the market is surging past you.
4) How do they all fit together? That's quite a collection of stuff in #3 above, and it doesn't even mention your vast product lines in servers, storage, networking, PCs, software, and more. What's your cohesive product plan, your strategic roadmap, that weaves together everything from analytics to mobile to optimized systems? "The infrastructure company" doesn't cut the mustard—how do you bring a clarity of vision and purpose to the world's broadest technology portfolio?
5) Optimized systems. I know I've mentioned this above but I want to come back to it because it's become such a pervasive topic in the business today, and your decision on how to pursue this opportunity (or not to pursue it) will have big implications for your company. HP sits in an interesting spot, with no applications software in your portfolio. IBM's got a massive analytics software business and is beginning to bundle more and more of its apps into these purpose-built machines. It's also working with SAP on additional optimized systems, as I believe HP is. But that one toe-dip is not exactly a leadership position, and you risk being seen as out of touch. Heck, your pals at Microsoft are getting into the business, as are your not-so-pally pals at EMC. You and long-time partner SAS already have one such optimized system but you and SAS could amplify that by pairing up for some fantastic new combinations. Same with you and SAP--go beyond the trial project and push this effort forward in areas that'll provide unique opportunities for each of you. And Microsoft's jumped in the purpose-built system as well--that's another possibility. But it's not a spectator sport—you're in or you're not.
6) HP's mobile strategy. Big question: is Palm substantial enough to be the center of your mobile strategy? Another big question: I'm not saying PCs are dying, but even a slight reduction in overall demand for full-sized notebooks could jolt your business, since you are, after all, the world's leading PC supplier—and as more and more folks turn to smartphones and tablets and netbooks, where's the big-time and long-term value for your enterprise customers? Is the consumer PC business a great advantage to your overall enterprise business, as your predecessor believed, or is it becoming more and more of a distraction as the mobile enterprise takes shape?
7) Converged Infrastructure: what's the future? We're starting to hear a lot of talk about the imminent "refactoring" of the venerable storage and server businesses, plus the networking business, and your company's "converged infrastructure" approach has been quite successful. But if I'm a big customer, I'm asking this question: "I get that it's converging, but what happens after the convergence is complete? What sort of a world am I looking at then? And how are you helping me prepare for it now other than sticking a tap into my veins and putting me on the permanent upgrade regimen?" How does this core hardware business of yours tie into mobile and analytics and your huge Software Group? Speaking of that group . . . .
8) Define and showcase how the Software Group fits in.You have a great team here but it has seemed at times in the past they they were almost a separate subsidiary of HP—it wasn't always clear how your sophisticated management tools and technologies fit in with all the other big and fast-moving pieces within HP. You've got a huge opportunity here to showcase how your Software Group can be a huge weapon in the 80/20 battle, and how it can help enable the mobile enterprise, and increase your customers' resiliency and performance. On its own, it'll continue to be fine; woven into a unified strategy, it could be awesome. (And for more insights on HP and an even broader software strategy, please be sure to check out a very sharp column by my colleague Doug Henschen: Should HP's Next CEO Buy More Software?.)
9) The PC Business: should I stay or should I go? Not that you have to be just like your primary partners or competitors, but HP is the only company among this group that is not a pure-play enterprise company: HP, IBM, Oracle, SAP, EMC, Brocade, Juniper, and 98% of Cisco. So again: is the buzz you get from your PC campaigns significant enough to overcome the cost of uniqueness that such a two-headed business mandates?
10) The "HP Way": let it go. Lots of great values are embodied in the founders' principles and they should be honored, revered, and preserved. But sometimes companies can tangle themselves up in phony emanations and penumbras of their core principles, and in the recent scandal involving your predecessor, the term "the HP Way" came to symbolize things far beyond what the founders intended. Some observers said Hurd's failure was in not following the HP Way, and that's simply asinine; Hurd's failure was in simple judgment, the kind we all learn in grade school, and had nothing to do with HP's core beliefs or its founders. Some are even saying that HP erred in hiring Hurd and, before him, Carly Fiorina, because they were "outsiders" who did not embrace "the HP Way." This, too, is nonsense—as if any one company has a lock on all the great leaders in the world, or as if having spent your whole career at HP somehow insulates you from wrongdoing because you walk down the path of perfection defined by the HP Way.
As I recall, a very big competitor of yours based in New York and with a storied past even longer than yours (that would be IBM) had for decades a no-layoff policy. For a couple of generations, that policy was as immutable within IBM as the speed of light. But reality changed, and the global marketplace tilted massively, and IBM's immutable no-layoff policy—as core an element of the "IBM Way" as anything could possibly be—became a mortal and very imminent threat to the company. The policy had to change, or the policy would kill the company. So respect the values of the HP Way, but don't confuse it with the Ark of the Covenant.
That's it for now. Good luck with managing that daily revenue flow of more than $300 million, and in charting a new course for HP.
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