Strategic CIO // IT Strategy
Commentary
9/22/2011
04:22 PM
Chris Murphy
Chris Murphy
Commentary
Connect Directly
Google+
LinkedIn
Twitter
RSS
E-Mail
50%
50%

Is A Customer Now In Charge of HP?

As eBay CEO, Meg Whitman ran a business built on technology. Will she have a better ear for what CIOs want to hear from HP?

As we head into another CEO transition at Hewlett-Packard, as former eBay CEO Meg Whitman takes charge, take a moment to listen to these two CIOs asking questions of HP chairman Ray Lane at our recent InformationWeek 500 conference. Lane had just spent about 30 minutes clarifying HP's strategy relating to PCs, tablets, and enterprise software.

Those product areas were the focus of a major HP announcement in August, in which the company said it is exploring spinning off its PC business, will stop making WebOS-based tablets, and had a $10 billion-plus deal to acquire Autonomy, whose software helps companies manage unstructured data like email. The announcements on PCs and tablets were such an about-face that they baffled customers and investors. Lane tried to help the CIOs in our conference audience understand HP's thinking.

But listen to the first two questions that came from our audience of business technology execs. Listen to their doubts. As HP frets about tablets and spinoffs and now another CEO transition, this is the message CIOs have heard from HP, and that Meg Whitman must answer.

Question #1: "I'm an HP shop. I'm a midmarket company. And [HP acquisitions] 3com and 3PAR were good for me.… But now that you bought EDS, now that you bought Autonomy, those are products that I can't even touch. They're way beyond me. So now the message I'm starting to get is 'You know, HP isn't the midmarket product anymore. HP is moving to the big guys.' What do you feel about that? Because I'm feeling abandoned."

Question #2: "I'm a CIO of a midmarket company, about a billion dollars, we're an HP shop. What you just said, it's much clearer what the plan is, and I appreciate that. But your comment around investment in storage and servers and infrastructure is almost like a footnote. When I look at unstructured data, I look at our priorities and what we need to do to deliver value to the organization, and shifting through unstructured data and getting value out of that is way down the list. I still have an enormous amount of structured data that we can't get our hands around. I almost feel like you're leaving us behind."

Lane, fairly enough, made the point that he was responding to the questions he was asked, and that's why the conversation didn't dig into data center hardware:

"Nothing could be further from the truth," Lane said. "It's not a footnote--it is our business, it's 99% of our business in the enterprise. All the R&D goes into that today. But I'm trying to address what I was asked, which is what we announced. We didn't change anything in servers and storage and networks, so I'm just addressing the specifics of PCs, Autonomy, and Web OS. That [infrastructure] is our business -- 99% that's where the focus is, that's where the people are."

But think of the audience reaction as a microcosm of HP today. When business IT pros talk about HP, they’re caught up in its possible PC unit spinoff and its tablet failure, maybe the steep price it's paying for Autonomy--and now, about the CEO change. More than one CIO I talked with after the session raised the idea that if HP sees PCs as commodity hardware, where all the innovation's driven by Microsoft and Intel, is it such a leap for them to start thinking of servers and storage that way? Those are the kind of questions they're wondering about, while the public discussion is on whether Whitman is a "celebrity CEO" not up to the task of turning around the world's largest tech company.

So what will HP's message be now? When Leo Apotheker was named CEO just 10 months ago, HP didn't have a compelling story for why it chose a software veteran to lead a hardware and services company with a comparatively tiny software portfolio. As eBay CEO, Meg Whitman ran a business built on technology--but one dramatically different, smaller, less complicated, and less diversified than HP. Will her message be, as one tech buyer to another, one that assures the core HP customers, rather than puzzles or worries them?

Comment  | 
Print  | 
More Insights
Transformative CIOs Organize for Success
Transformative CIOs Organize for Success
Trying to meet today’s business technology needs with yesterday’s IT organizational structure is like driving a Model T at the Indy 500. Time for a reset.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Tech Digest - July 22, 2014
Sophisticated attacks demand real-time risk management and continuous monitoring. Here's how federal agencies are meeting that challenge.
Flash Poll
Video
Slideshows
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
A UBM Tech Radio episode on the changing economics of Flash storage used in data tiering -- sponsored by Dell.
Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.