CRN Exclusive: Whitman's Campaign To Bring HP Back

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According to some partners, go-to-market and channel engagement are more clearly defined at Cisco Systems, which is battling HP in the hardware sales trenches both on the networking and server fronts.

"The go-to-market model with HP and Cisco is like night and day," said a top executive for a solution provider that has deep relationships with both and who did not wish to be named. "We spend a lot of time fighting with HP management in reference to HP taking something direct. I can't remember the last time I had a conversation like that with the guys at Cisco. No matter what they say, HP sometimes just doesn't get it. And when I call one of the channel guys to get it addressed, nothing happens."

Several enterprise partners that carry both HP and Cisco product lines expressed similar sentiments in interviews with CRN. It's a case of what one top solution provider calls HP's "flip flop" attitude on the rules of engagement with regard to the channel vs. direct sales.

"I don't want to be that one-trick HP pony," said the solution provider executive. "I don’t trust the HP pony. Under [former HP CEO] Mark Hurd, I felt like I was an extension of HP's sales force. I am not an extension of HP's sales force right now. Sometimes I feel like I'm in their way."

Beyond fixing channel conflict and organizational issues, Whitman also faces enormous pressure from investors and Wall Street. The day before she was named CEO, HP’s shares traded at $23.98. On Feb. 8, 139 days after she took the helm, HP shares closed at $29.46.

Brian Alexander, senior vice president and director of technology research for technology/hardware/distribution/EMS at Raymond James & Associates, has an outperform rating on HP shares ahead of the company's first fiscal quarter 2012 earnings announcement scheduled for Feb. 22, which marks the first full quarter under Whitman.

Alexander said in a research note that he expects HP's first fiscal quarter earnings per share to be at the high end of guidance, but for revenue to fall below the "Street estimate of $30.8 billion (by perhaps a few hundred million) due to weaker PC server sales and currency headwinds." He also expects investors to see a heightened focus on leveraging software across HP's diverse systems portfolio.

Partners also said Whitman must get HP's innovation engine firing on all cylinders. HP has skimped on R&D in recent years -- it spent $3.2 billion on R&D in fiscal 2011, a 10 percent rise from the year before but a figure that represents just 2.5 percent of annual revenue.

Whitman said she is committed to making "substantial" investments in R&D this year, but has not revealed how much HP will spend and to which technology areas it will direct this investment.

Inside HP, however, Whitman's vision for the future is resonating with top leadership. "She's out to build what I would call a sustainable, long-term plan for HP's key strength: Developing unique IP that solves our customers' most challenging business problems," said Donatelli. "She's bringing to us a great sense of urgency, great intelligence and a great view for the long-term vs. short-term operating profit."

NEXT: We'll Be Back In Tablets, Says Whitman

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