HP CEO Whitman Pledges Stepped Up Server Battle With Dell


Hewlett-Packard CEO Meg Whitman Wednesday said the computer giant is poised to get more aggressive to stem declines in the industry-standard server market where it is losing share to rival Dell.

"We simply have to execute better," said Whitman in a conference call with Wall Street analysts after HP posted a 12 percent decline in industry-standard server sales for its second fiscal quarter compared with the year-ago period. "And we are on it! We are moving quickly to revamp business models to give our sales teams and channel partners more tools and more agility, especially on pricing."

Whitman said she will not accept "very aggressive competitive pricing" from Dell or others as an "excuse" for poor sales performance at HP. "We need to fight much harder," she said. "For me this all comes down to our will to win, and we are committed to winning."

 

[Related: HP Shares On Rise After Better-Than-Expected Q2 Earnings]

With HP walking away from a number of deals as a result of pricing pressure, Whitman pledged that HP will "take another look at the low end of our product line to better match customer needs and price points."

Whitman cautioned that Palo Alto, Calif.-based HP is not likely to see the benefit of the changes until "later in the year," given server deal "cycle times."

The no-nonsense call to action from Whitman comes after Dell CEO Michael Dell boasted in an exclusive interview with CRN earlier this month that Dell is gaining server share from HP at a "staggering clip," even as Dell moves to close a $24.4 billion blockbuster leveraged buyout.

Preliminary server unit data from market researcher IDC shows Dell's North America share at 35.7 percent in the first quarter, up from 31.7 percent, while HP's share during the same period came in at 28.2 percent, down from 33.9 percent.

Whitman, for her part, said Dell is paying a big price with its aggressive server pricing decimating the Dell bottom line. Dell in its first fiscal quarter of 2014, which ended May 3, reported non-GAAP net income of $372 million, down 51 percent from $761 million in the similar quarter one year ago.

"This quarter you saw one of our big competitors, Dell, completely crater their earnings," said Whitman. "That is not sustainable for a company like Hewlett-Packard. Maybe it is what you do when you are going private, but it is not what you do if you are running a big publicly-held company that is trying to create the financial capacity to invest in innovation and to invest in our future. And as I said, we are here to set this company up for the long term, not just get through this year."

NEXT: Whitman Says HP Must Strike Market Share-Profitability Balance In Server Battle