Whitman is out at HPE; Apparently the 'Job is Done'
Splitting up HP and selling off so many parts may have been good for shareholders, but CEO Meg Whitman's strategy would have left HP's founders wondering what became of their company.
HPE’s CEO, Meg Whitman, announced in a recent call with financial analysts that she would be stepping down from the company after a six-year stint. Whitman’s tenure has seen the once great marque of Hewlett-Packard decimated. Split in two, cut into tiny pieces and fed to the wolves. The company that helped to invent the Silicon Valley we know today reduced to, well, not much really.
In the sort of positioning that only someone with the track record of Whitman could get away with (or, perhaps, think she could get away with), she said that the company is in much better shape than when she first arrived back in 2011. People will remember that HP (as it was known back then) was a huge technology conglomerate. It had so many parts -- it was a vendor in the IBM mold -- big, broad, and beefy.
Whitman’s arrival came at a time that HP was feeling the pain. The rise of cloud computing and some disastrous moves by her predecessors (in particular, the acquisition of Autonomy, which was a debacle of almost unimaginable proportions) had left HP bloodied and wounded. Whitman’s strategy was to focus: to move away from the massive portfolio of products and services the company sold, to refine the size of the organization, and to gain some much needed speed.
As Whitman commented upon her departure, with no hint whatsoever that she realized just what a massive understatement it was: "This company was a slower company than I would have liked to [have] seen six years ago." So began the axe work. And, Whitman wielded that axe with aplomb.
The biggest change was the splitting of HP into two companies -- HP would spin off to focus on printers while HPE would continue to be services, software, and all things cloud. But it didn’t end there. Whitman spun of its software business and sold it to Micro Focus. The IT services business was carved off and merged with CSC (to create a new entity, DXC Technology. HPE’s Indian outsourcing unit Mphasis was gone (to Blackstone group). Even the cloud platform, the very thing that could possibly (if done right) have given HPE a fighting chance for the future, was carved off; the OpenStack and Cloud Foundry business units were acquired by SUSE.
Now that the carnage is done, what do we have? A much smaller business than six years ago, and one which essentially gave up the stuff of value (cloud! services! software!) to focus on...tin. Yup, HPE in its current guise is pretty much a maker of compute, storage, and networking hardware. It's all the stuff that is rapidly becoming commoditized as the webscale organizations look to generic manufacturers to supply them with commodity hardware. All of a sudden the allure of an HPE badge on a server isn’t quite so exciting.
[Ben is the cloud track chair for Interop ITX 2018, running April 30-May 4 in Las Vegas.]
So Whitman moves on, and leaves the company in the hands of Antonio Neri, a longtime HPE executive and currently its president. According to Whitman, Neri has the technology chops needed for where the company is today.
Of course, the context here is that only a few short months ago Whitman stated that she had no plans to leave HPE and that there was still a lot of work to do within the company. It seems HPE has either worked quickly, or continuing to flog a dying horse was just too much for Whitman. Of course this sounds like some serious snark on my part, but really, I’m frustrated at HPE. I’ve been covering the company for many years and I’ve just seen so many examples of missteps. Obviously the Autonomy acquisition, under previous CEO Leo Apothekar, was huge. But since then things haven’t let up.
I must have seen HP launch, re-launch, pivot, and re-pivot on its OpenStack cloud initiatives half a dozen times. It acquired Eucalyptus and with it the well-respected exec Martin Mickos. It bought the Stackato Cloud Foundry business off ActiveState, but both of those, while in favor for a short period of time, quickly fell out of favor and were jettisoned.
Maybe we shouldn’t be too hard on Whitman. After all, she should be given some credit for seeing the writing on the wall and designing some good asset stripping activities to realize some value from the former company. We don’t have to look too far to see a similar company seemingly continue with its strategy of burying its head in the sand. IBM has seen an incredibly run of quarters with decreasing revenues but still sees fit to talk about itself as a credible player. From a shareholder’s perspective, maybe HPE has done the right thing. Yet, one thing is for sure, and that is that Messers Hewlett and Packard wouldn’t know the company today. Their once great creation is destined to become a footnote in technology history.
Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, ... View Full Bio
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