HP CEO Whitman: Microsoft, Intel Are 'Outright Competitors'

Meg Whitman’s comments highlight a partner landscape that is changing due to pressure from mobile devices, the cloud and other trends.

Hewlett-Packard CEO Meg Whitman is putting a harsh light on the rapidly changing competitive landscape fueled by such trends as cloud computing, mobility and hyperscale computing.

Speaking to financial analysts Oct. 9, Whitman said she was confident in the progress her company was making in its five-year turnaround effort, adding that she expects greater stabilization for the company to occur in 2014 with “pockets of growth,” followed by the business gaining steam in 2015 and becoming “in fiscal 2016, an industry-leading company.” Her optimistic comments cheered analysts and investors alike.

However, Whitman also pointed to longtime partners Microsoft and Intel as leading causes for HP’s recent growth problems, a comment that is highlighting the impact market forces are having on increasingly fraying vendor relationships.

"HP's traditional highly profitable markets face significant disruption,” she said. “Wintel devices are being challenged by ARM-based devices. The disruptive forces are very tough and very real, and they are accelerating. We are seeing profound changes in the competitive landscape. Our competitors are expanding across the IT stack. Current partners like Intel and Microsoft are turning from partners to outright competitors."

Microsoft officials angered many OEM partners last year when they began rolling out their own Windows 8-based Surface tablets, a key part of the software giant’s efforts to become a larger player in hardware and a move that brought Microsoft into direct competition with other PC makers. Many OEM officials publicly dismissed the move, saying that Microsoft was trying to help create a market.

However, not everyone was so dismissive. Just weeks after the Surface was released, Acer Chairman and CEO J.T. Wang reportedly told the Financial Times that he and other company executives “have said [to Microsoft], ‘Think it over. Think twice. It will create a huge negative impact for the ecosystem and other brands may take a negative reaction. It is not something you are good at, so please think twice.’”

Part of the reaction from PC makers—including HP—has been a much more vocal and public embrace of other operating systems, in particular Google’s Android and Chrome OSes. HP officials have adopted a multi-OS strategy, and in September unveiled the HP Chromebook 14, followed by the smaller HP Chromebook 11, announced Oct. 8. The multi-OS strategy encompasses other systems as well, including the SlateBook x2, Slate 7 and Slate21, an all-in-one PC.

With its planned acquisition of Nokia’s handset business for $7.1 billion, Microsoft also will find itself in more direct competition with smartphone makers, some of whom are also looking to grow the market for Windows-based mobile phones. That could soon include HP, whose executives—including Whitman—have said the company plans to re-enter the space.