Meg Whitman’s hardest act in tech: Splitting HP
CNBC Transcript: Hewlett-Packard Enterprise CEO & HP Inc. Chairman Meg Whitman Speaks with CNBC’s David Faber on “Squawk on the Street” Today.
As HP Enterprise celebrates its first day of trading, CNBC’s David Faber speaks with Hewlett-Packard Enterprise CEO & HP Inc. Former Hewlett-Packard chief executive Carly Fiorina has repeatedly said that her time spent running a huge company makes her a viable candidate to run the nation.
Following are links to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000441974, http://video.cnbc.com/gallery/?video=3000442253, http://video.cnbc.com/gallery/?video=3000442254 and http://video.cnbc.com/gallery/?video=3000442620. The server, storage, networking, services, software, and cloud businesses will live under the HP Enterprise umbrella with Meg Whitman—who led legacy HP—as president and CEO. The two executives have many similarities: Whitman ran as the Republican candidate for governor of California in 2010, losing to current governor Jerry Brown. HP INC WILL CONSIST OF THE PERSONAL COMPUTER AND PRINTER DIVISIONS, WHILE HEWLETT PACKARD ENTERPRISE, HPE, WILL FOCUS ON SERVERS, NETWORKING, DATA STORAGE AND MANY OTHER KEY PRODUCTS TO KEEP THE TECHNOLOGY UP TO SPEED AT CORPORATIONS. Fortune‘s Barb Darrow summarized the company’s struggles this way: Exactly when things went off the rails is subject to debate, but many point to the controversial acquisition of Compaq Computer in 2001 by HP’s then-CEO Carly Fiorina as the start of the decline.
Since then, the company’s had to weather such self-inflicted wounds as a pretexting scandal in which a board member, an executive and HP-paid investigators faced criminal charges for spying on journalists; the $1 billion acquisition of Palm Computing in 2010 to beef up HP’s mobile capabilities; then the sale of Palm’s intellectual property. There was also the ill-fated purchase of computer services giant EDS in 2008 and HP’s $11 billion bet on software company Autonomy, not to mention the dismal year-long tenure of Leo Apotheker. Whitman is now managing HP’s tricky ransition from one gigantic, but struggling, technology giant into two public companies, HP Enterprise HPE and HP Inc., which were born Monday. WE ARE UNIQUELY POSITIONED TO HELP COMPANIES DO THAT, WE HAVE HARDWARE, SOFTWARE AND SERVICES AND WE ARE FOCUSING AROUND A SMALL NUMBER OF PROBLEMS THAT ARE REALLY IMPORTANT TO CUSTOMERS. FABER: YOU TALKED A LOT ABOUT SPEED TO MARKET AND THE CHANGING MARKETPLACE AS A REASON WHY YOU PURSUED THE SPLIT AFTER YEARS OF DISCUSSING THE BENEFITS OF THE TWO COMPANIES BEING TOGETHER.
BECAUSE YOU HAVE CALLED IT CORRECTLY THESE ARE DIAMETRICALLY OPPOSED STRATEGIES FABER: IT WILL BE FASCINATING TO WATCH OF COURSE THAT DEAL LONG FROM GETTING CLOSED, BUT WAS A BIG HEADLINE FOR US. ONE OF THEM WILL NOT BE PUBLIC CLOUD, WHEN I TALK ABOUT AWS WHICH WE DID IN THE INTRODUCTION, TONY SAKANAGI USUALLY OUTSPOKEN ANALYST WHO FOLLOWS YOUR COMPANY SAID A BIG PART OF THE MARKET IS MOVING IN A SINGLE DIRECTION, MEANING TOWARDS USE OF THE CLOUD, AND HP ARGUABLY DOESN’T HAVE OFFERINGS TO CATER TO THOSE CUSTOMERS TRADITIONAL VENDORS HAVE CHALLENGES IN TERMS OF THAT MIGRATION YOU CAN ARGUE THAT OTHERS HAVE AT LEAST TAKEN MORE VISIBLE POSITIVE STEPS IN THAT DIRECTION.
WHITMAN: OUR VIEW IS THE WORLD WILL BE A HYBRID CLOUD, IN OTHER WORDS SOME APPLICATIONS WILL BE LOCKED DOWN IN A CUSTOMERS DATA CENTER UNTOUCHED BY ANYONE BUT THEIR EMPLOYEES, SOME WILL BE ON A PRIVATE CLOUD ON THEIR PREMISE, SOME WILL BE ON A VIRTUAL PRIVATE CLOUD OR A MANAGED PRIVATE CLOUD ON THEIR PREMISES OR OURS OR ANOTHER SERVICE PROVIDER. BUT INTERESTING ENOUGH PRIVATE CLOUD WHERE WE LEAD AGAINST ALL OTHERS IS ACTUALLY A BIGGER PERCENTAGE OF THE TOTAL MARKET TODAY AND GROWING JUST AS FAST.
AND IF YOU LOOK BACK AT THE BEST ACQUISITIONS FOR OUR COMPANY OVER MANY MANY YEARS, THINK ABOUT 3PAR WHICH IS NOW OUR STORAGE COMPANY, 3COM, WHICH IS NOW OUR NETWORKING COMPANY, ARUBA WHICH WE JUST BOUGHT THOSE ARE THE KINDS OF ACQUISITIONS THAT ARE RIGHT FOR HEWLETT PACKAGE ENTERPRISE. THEY’RE COMPLEMENTARY TECHNOLOGY THAT LEVERAGE OUR GO TO MARKET STRENGTH, 90 THOUSAND VALUE ADDED RESELLERS AND DISTRIBUTORSAND OUR DIRECT SELLING FORCE. WE PAID FOR THOSE PRODUCTS BUT IT WASN’T THESE REALLY REMARKABLE MULTIPLES OF 90, 100, 150 TIMES EITHER REVENUE OR EARNINGS IF THERE ARE EARININGS AT THESE COMPANYS. FABER: IT’S INTERESTING WE’RE TALKING ABOUT CONSOLIDATION, OF COURSE, BECAUSE DESPITE YOUR SIZE ON THE TOP LINE, WHAT? 53 BILLION IN REVENUES, AND YOUR EMPLOYEE BASE, 250,000, YOU ONLY HAVE A $26 BILLION MARKET VALUE. I MEAN, THIS IS A VERY DYNAMIC ENVIRONMENT, WHICH IS ONE OF THE REASONS WE THOUGHT IT WAS IMPORTANT TO BE SMALLER SO WE COULD BE MORE AGILE IN AN ENVIRONMENT THAT REQUIRES THAT.
FABER: STILL WITH A QUARTER OF A MILLION PEOPLE WORKING FOR THE COMPANY, YOU DID ANNOUNCE SIGNIFICANT JOB CUTS ABOUT A MONTH OR SO AGO, WHEN YOU GAVE – OR MAYBE A BIT MORE, SIX WEEKS – WHEN YOU GAVE US MORE DETAILS. FABER: MEG, IN YOUR REGULAR APPEARANCES HERE ALMOST QUARTER AFTER QUARTER, OF COURSE, SINCE YOU FIRST TOOK THE JOB, I WOULD OFTEN ASK YOU OK, WHEN ARE YOU GOING TO SEE GROWTH. WHITMAN: AND I THINK IF DION WAS HERE, HE WOULD SAY HE’S SEEING SOME GREEN CHUTES THAT, YOU KNOW, WINDOWS 10 HAS ACTUALLY BEEN DOWNLOADED, YOU KNOW, MILLIONS AND MILLIONS OF TIMES. With CNBC in the U.S., CNBC in Asia Pacific, CNBC in Europe, Middle East and Africa, CNBC World and CNBC HD , CNBC is the recognized world leader in business news and provides real-time financial market coverage and business information to approximately 371 million homes worldwide, including more than 100 million households in the United States and Canada. CNBC at night features a mix of new reality programming, CNBC’s highly successful series produced exclusively for CNBC and a number of distinctive in-house documentaries.
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