Five Things Meg Whitman Will Discuss At HP's Analyst Day8:00 PM EST Tue. Oct. 02, 2012
Hewlett-Packard CEO Meg Whitman has had a whirlwind first year at the helm, and Wednesday she will meet with Wall Street analysts to discuss her plan for restoring the sheen to HP's battered reputation.
Whitman in the past year Whitman has re-organized HP, eliminating organizational "siloes," combining its PC and printer businesses and cutting 29,000 jobs. Despite these moves, HP shares are trading near their lowest levels in a decade, and several recent analyst downgrades suggest more difficulties lie ahead.
Whitman wants HP to be more consistent and steady, and often talks of reducing the "noise" and "drama" that has followed the company over the past several years.
HP partners believe Whitman is making progress. "Meg means business. If she implements and does what she says she wants to do, HP will become a major force in the industry once again," Dean Cappellazzo, CEO of Bedrock Technology Partners, a San Mateo, Calif.-based solution provider, told CRN.
Still, the fact remains that HP remains in the headlines, even if Whitman had no part in creating the issues. Following are five topics that Whitman will likely spend significant time addressing when she meets with Wall Street analysts.
1. Cloud Computing
HP earlier this month created an internal division that unifies several previously disparate cloud products and services, and hired Saar Gillai, former vice president of cloud networking, to run it. In April, HP unveiled its Converged Cloud Services program, an overarching strategy for public, private and hybrid cloud services.
These moves underscore HP's desire to tell a more concise cloud story that is unique from other vendors' offerings, one HP partner told CRN.
"HP is well aware that they have something good here, but not a lot of people understand what it is," the partner said of HP's cloud portfolio, speaking on condition of anonymity. "HP also recognizes it needs to equip its legacy channel and internal sales force to sell the cloud."
NEXT: HP's Plans For EDS and Enterprise Services
2. EDS And HP Enterprise Services
Analysts will be interested to hear Whitman's plan for revitalizing HP's Services division, which has seen relatively flat revenue the past several quarters.
HP denied it was looking to sell EDS, which accounts for the vast majority of its Enterprise Services business, in response to a CRN report last month that it had shopped the business to private equity firms.
In a meeting last week with channel partners, Whitman denied that EDS is for sale and insisted that it is an important part of HP's future services plans. She told partners EDS is going to be a "great turnaround story" and reiterated this message earlier this week in an interview with the New York Times.
Brian Alexander, director of technology research at Raymond James & Associates, believes HP wants to sell EDS and could fetch around $5 billion for it. However, he thinks HP may have a tough time finding a buyer.
3. Autonomy And Vertica
Whitman wants to build HP's software capabilities, and she has two highly regarded sets of big data technology in Autonomy and Vertica. Analysts will be looking for some insight into Whitman's plan for monetizing these assets.
HP Software chief George Kadifa said recently Vertica is growing, with revenue in the "middle-double-digit millions" range. But, HP is still pumping the brakes on selling Vertica through the channel and hasn't offered any indication of when it might do so.
Vertica's high-performance database analytics is a complex sale, but Whitman wants to get the channel involved in selling it. HP currently does around 15 percent of its Autonomy and Vertica through the channel, and Whitman would like to boost that figure to around 40 percent, sources told CRN.
Whitman is expected to discuss how hiring Microsoft veteran Robert Youngjohns to run Autonomy will help this business to start gaining momentum. Whitman was saddled with the $10.3 billion Autonomy acquisition upon taking office, and HP has had a tough time figuring out how to integrate it with the other parts of its business, sources told CRN.
NEXT: HP's Return to the Tablet Market
4. HP's Return To Tablets
HP, which failed in its first foray into tablets with the WebOS TouchPad, is back in the game with its Windows 8 powered ElitePad 900. Whitman will likely face questions about whether HP is planning to target consumers with true tablets or with hybrids like the recently unveiled Envy x2.
HP is pitching the ElitePad 900 as a rugged and expandable tablet with the security and management that enterprise IT departments have been craving ever since iPads began trickling into their organizations.
5. The HP Smartphone
Whitman, in an interview with Fox Business News last month, said HP would eventually get back into the smartphone market in order to serve customers in countries where mobile devices are the main way people access the Internet.
Given HP's failed $1.2 billion Palm acquisition, and its subsequent $3.3 billion in goodwill and inventory write-offs, analysts aren't keen on the idea, and they'll no doubt be asking Whitman for more details on her plans.
"While the move makes sense strategically, we see it as a high risk move," Jefferies & Co. analyst Peter Misek said last week in a research note to clients. "On top of adding costs and working capital burdens to an already stressed balance sheet, there could be additional write-offs."
PUBLISHED OCT. 2, 2012