Apotheker's Lieutenants Weigh In On The New HP CEO3:05 PM EST Fri. Mar. 25, 2011
As an outsider taking over a company that has been rattled by cultural backlash from three major CEO changes in a dozen years, new HP CEO Leo Apotheker has turned to HP veterans as his lieutenants to drive a cloud software, services and connected devices strategy.
Here three of Apotheker's key lieutenants, Stephen DeWitt, senior vice president and general manager, HP Personal Systems Group Americas; Ann Livermore, executive vice president of HP's Enterprise Business, and Vyomesh (VJ) Joshi, executive vice president of HP's Imaging & Printing Group (IPG), talk about the new CEO's technology vision and partner strategy.
DeWitt: Leo is a very strategic thinker. I think he has put a lot of passion around strategy not just at an operational level, which when you are at our scale, at $120 plus billion with a supply chain that is $80 billion and you sell two PCs every second, you have to be operationally savvy, but our strategy was very operationally tilted. I think what Leo has brought is layered on top of that operational excellence is a vision around our technology footprint, a vision around the relationship with the end customer and a vision around one HP.
Livermore: Leo has a passion for helping customers use technology to drive innovation and business value. At the heart of it is really having a differentiated offering. And he is very focused on us maintaining and advancing our leadership from a product and services perspective. He is very savvy about the customer. He spent a lot of his time and career working with customers. And I think people who have both a deep customer understanding and a passion and belief in investing in technology is an incredibly powerful combination.
VJ: I really like his bold vision. It is bold. It is definitely different from looking at HP as [just] a [technology] arms supplier. We are talking about a next generation [cloud computing] architecture based on formidable market trends but then built out with new solutions. It really pulls everything together into an HP vision rather than an individual business vision. I think that is very powerful. I like his focus on innovation and employees. I am not surprised because that is what we all expect at HP. But I think that what he brings that is very valuable is the software because software is the glue.
DeWitt: One of the seminal elements of our strategy inside of PSG is transitioning away from a transactional model where the way we pay people, the way that we guide R&D was based on the transaction to a lifetime value model, where look, I am going to make five bucks on the PC I am going to sell you, but I want to make $5,000 on the relationship that I have with you and [the relationship] that my partners have with you.
Livermore: One of the things that we have certainly been focused on is incenting and helping our partners sell more of our products bundled together as a solution in even the most basic ways like server and storage, and server, storage and networking and services attached to that. So I think the number one thing would be encouraging and enabling our partners to sell more of the portfolio together.
VJ: It is not just about moving from hardware and supplies to services and solutions you are building a long term relationship with the customer. It is not just about hunting. It is about farming. That is going to be the key. The key to a long term relationship is when you start selling them services, selling them software, selling them document solutions. That is the shift we are making.
DeWitt: There are going to be pure play private clouds, pure play public clouds. There are going to be a lot of hybrid clouds. The fact of the matter is that the global world is going to evolve towards the cloud paradigm at different rates with different motivators, different drivers to the speed and pace and investment they are going to make in moving to the cloud. This fits in perfect for us because we can play in that hybrid world.
Livermore: From a product perspective our converged architecture is certainly at the heart of helping people build out cloud, whether it is private cloud or public cloud. I think for our channel partners they play a huge role in helping us be able to deliver against the vision of helping people build out the traditional world as well as helping build out a cloud based world and managing the transformation and the hybrid nature of that environment.
VJ: We are building a web connected printing center, an apps store all around a cloud architecture, one common architecture with HP software. With one architecture you can take the content, capture the content, authenticate it, put other things around it, store it, customize it, personalize and print. So you have both an on ramp and off ramp with one cloud architecture that allows us to build solutions on top of what we are doing for both enterprise customers and SMB.
DeWitt: We need to spend less time trying to recreate the past and more time focused on the appropriate contracted model moving forward so that the incentive system is appropriately aligned. And we are making those changes. We are going to incent learning and development so that people have the skills. WebOS is a perfect example. That [WebOS] growth is going to be dependent on a development community extending the value proposition of WebOS to the bazillions of devices from the data center out. So just like you had to invest in becoming a CNE at Cisco, we are going to put that same thrust out there [with WebOS].
Livermore: We have got some of our partners who have decided to expand into becoming experts around our software and that has been very attractive for us. Many of the partners are using our cloud services automation software helping clients build private and public clouds. This software is just one more aspect of the overall [cloud] offering. We have got plans just in software training for about 500 professionals in our partner community in North America based on the demand there. So that is one of the things we are certainly committed to training based on areas of the portfolio they support.
VJ: We had no Managed Print Services (MPS) business [several years ago]. Now we have a $7 billion contract value. I would say that you are going to see that kind of a movement slowly but steadily with more customers. And you will see more customers and devices under contract. Absolutely this is where the market is moving. We are helping partners because this is not going to be an easy transition. They have to rely on us and we absolutely are very supportive of that transition.
DeWitt: As we try to position ourselves in the New World order, because nobody's position is assured, we are pushing a portfolio that goes from the data center to the edge and an applications and services portfolio that goes from the application to the edge. That is a big change for us. Historically it has been my router against your router, my switch against your switch. We are elevating the story above the hardware stack.
Livermore: These steps of seeing, understanding and acting are what we bought our [security] software to enable us to do: to see what is going on in your [IT] environment, how do you understand it with correlations and analysis and how do you immediately put an action in place to deter or stop the intervention. That is really what our [security] software is all about. We feel great about what we have already and then what we can organically invest in R&D to develop ourself.
VJ: I think that what Leo brings that is very valuable is the software because software is the glue. About 70 percent of our R&D is about software. He is really going to help us in making that software into a really profitable growth business for us. And secondly, I truly believe he is bringing his expertise in building true vertical solutions. That is an area where we have a lot to learn and he has already done it. Those two things are going to be extremely valuable.
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