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    HP CEO Meg Whitman Shares Turnaround Plan Ahead of Meeting

    By
    Michelle Maisto
    -
    October 1, 2012
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      Hewlett-Packard ships more PCs globally and in the United States than any other company. But in what some like to call a post-PC world, the Palo Alto-based company, as it struggles to find its new identity (Will or won’t it sell PCs? Will or won’t it sell mobile phones?) is on a downhill.

      Ahead of an important securities meeting with analysts Oct. 3, CEO Meg Whitman, now 13 months on the job, sat down with The New York Times to share her big plan for turning the company around with an even larger audience.

      “Meg Whitman believes in HP, and believes that this company matters to Silicon Valley, to California, to the world. She believes that Wall Street doesn’t quite get it—doesn’t quite see the promise she sees,” wrote The Times’ Quentin Hardy. “She believes that mobile devices, cloud computing and big data will re-energize HP, a company that for a decade has grabbed more headlines for boardroom soap operas than for bold innovation.”

      In a video interview with Hardy, Whitman shared her plans for Wednesday’s meeting.

      “We need to tell The Street HP’s story. We need to explain, business unit by business unit, what our strategy is, where the growth is going to come from, what the products or services or solutions are that we’re going to bet on, and how we’re going to drive those consistently over the next four to five years,” Whitman said. “Then we need to explain why HP is better together, and tell our story with clarity and transparency, so that investors … understand what it is we’re doing.”

      HP’s stock has been on a roller coaster that Whitman blames, in part, on its high CEO turnover. In 1999 Lew Platt was replaced by Carly Fiorina, who in 2005 was replaced by Mark Hurd, who in 2010 was replaced by Leo Apotheker, who was on the job a year before Whitman took over. HP now needs a consistent vision, she said. Hers is a customer- and product-focused strategy.

      In HP’s printing business, for example, “HP is betting on ink,” she said, “but taking the traditional ink model and pioneering a model called Ink Advantage.”

      Printers will cost more, but individual ink cartridges will cost less. In the United States, an ink subscription program will bring in more dollars for HP, but cost consumers less per page. Additionally, HP will differentiate its ink and toner from competitors’.

      Whitman confirmed that HP has not walked away from consumer PCs, though “certainly, we have not been as successful, in the last year or two, as we would like to be.”

      During the second quarter, HP’s worldwide PC shipments fell more than 12 percent year-over year, while No. 2 Lenovo—which has been closing in on HP and during the second quarter grabbed a 14.7 percent market share to HP’s 14.9 percent share—grew by nearly 15 percent, according to Gartner.

      HP’s PC business, Gartner said in a July 11 report, “has not been back to pre-restructuring level yet. The company also faced aggressive pricing from Lenovo in the professional market and threats from companies such as Asus and Samsung in the already crowded consumer markets.

      HP recently introduced a handful of “revamped,” to use Whitman’s term, thin-and-light products—desktops, a tablet hybrid and, on Oct. 1, a true tablet—that will arrive with Microsoft’s Windows 8 operating system later this month. These products face the challenge of standing apart from the pile of device announcements that have preceded the OS’ launch, and even a tablet from Microsoft itself.

      Whitman added that while HP is known as a PC and printer company, its two biggest growth areas are enterprise server, storage and networking, and its software business.

      “And our services business—listen, it’s a big business,” she told Hardy. “I think that can be an important part of our portfolio, and we’re got a turnaround on our hands.”

      Michelle Maisto
      Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University, and in her spare time obsesses about food. Her first book, The Gastronomy of Marriage, if forthcoming from Random House in September 2009.

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