New Hewlett-Packard President and CEO Meg Whitman Thursday moved quickly to restore solution provider confidence in the world's largest IT company by pledging her commitment to the company's legacy hardware business.
"I want to reiterate our commitment to the hardware business," said Whitman in a conference call with analysts after being named the eighth CEO in the 72 year history of Palo Alto, Calif.-based HP. "The vast majority of the revenue of the company is still in the hardware business."
Whitman, the former president and CEO of eBay who joined the HP board eight months ago, also promised to move as quickly as possible to eliminate the uncertainty that has stalled hardware sales in the pipeline for some HP solution providers since the company announced on August 18 that it was considering spinning off its $40 billion Personal Systems Group (PSG) PC business.
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"The best thing we can do is to get to a decision on PSG as fast as possible," said Whitman, who took eBay from a $4 million upstart to the world's largest online marketplace with $8 billion in sales when she left in 2008. "This decision is not like fine wine. It is not going to get better with age. We have got to do the analysis, get to the decision and then tell our customers and the market what it is we are going to do."
Whitman's commitment to the hardware business couldn't come quick enough given HP CFO Cathie Lesjak's warning on the conference call that the company could miss revenue targets for the current quarter because of uncertainty in the outlook for the hardware business.
Whitman's hardware comments represent a direct strike against her predecessor, Leo Apotheker, who was ousted by HP's board Thursday.
Apotheker, a former CEO of software giant SAP, was sharply focused on remaking the hardware behemoth into a software power even though software sales currently only account for about two percent of HP's annual sales. HP solution provider partners that built big businesses selling HP PCs, servers, networking gear and data center solutions viewed Apotheker as a hardware antagonist.
Besides looking at spinning off the PC business, Apotheker's boldest move as CEO was the company's planned $10.3 billion acquisition of enterprise software maker Autonomy, a deal which has been widely criticized because of the high price tag that HP is paying for the company.
When asked if she would review HP's recent strategic decisions, Whitman endorsed the moves made by Apotheker, herself and the rest of the board, including the Autonomy deal and the potential PC spinoff.
"From what I know now, I think the strategy is right and the initiatives we undertook on August 18 are right," she said. That said, Whitman will review the "strategic initiatives" that have been put in place at HP and "surface with my point of view on this." What's more, she acknowledged that HP has "got to leverage the entire portfolio to bring solutions to market that solve customer problems."
NEXT: HP Partners Cheer New CEO Whitman's Hardware Commitment