CRN Exclusive: Whitman's Campaign To Bring HP Back

Printer-friendly version Email this CRN article

Still, HP is in the same bull’s-eye of technology change as other hardware-centric vendors, and Whitman faces the Herculean task of shifting a company that still makes 70 percent of its revenue from hardware sales onto a software and services path. HP's software business currently accounts for about 3 percent of its revenue, and some strategic bets will be needed to boost that figure.

"Companies in the future are going to have to be innovative and nimble. No one is going to survive on operational strength alone," said the CEO of a large national solution provider that already has moved aggressively to new cloud computing business models and did not wish to be named. "The best thing Meg can do is create a culture of transformation that leads and manages change well."

How HP works the assets from the Autonomy acquisition into its portfolio will be closely watched as a sign that Whitman's strategy is working. Autonomy's technology allows computers to understand unstructured data -- i.e., e-mails, Twitter posts, video and audio. Autonomy is resource-intensive technology and, as such, will drive sales of HP servers, storage and other hardware, said Mike Lynch, Autonomy co-founder and CEO, and vice president of HP's Information Management division.

"The reason why Autonomy was so valuable is that it's a unique asset," said Lynch. "There's nothing out there that has the ability and scale to understand the meaning of human-friendly information."
Given the amount HP paid for Autonomy, it would be understandable for Whitman to push for a quick return on the investment by channel partners up to speed on selling it.

Brandon Harris, vice president of HP Solutions at $1.1 billion solution provider Logicalis, already has engaged in preliminary conversations to bring Autonomy into the Logicalis HP product portfolio and is interested in its archiving product as a potential cloud opportunity.

"Customers that buy Autonomy look for the hardware and storage, and that’s coming from HP,” Lynch said. “They look for services and that can come from HP and its partners."

Autonomy's technology also is being baked into HP’s PSG products -- most PC owners “almost certainly” have Autonomy technology on the products that ship with their PCs, through OEM agreements with companies such as Adobe and Symantec, Lynch said. And HP's Imaging and Printing Group can use it to make printing interactive using visual recognition technology he said.

HP is opening its distribution system to Autonomy and the channel will certainly play a key role, but Whitman said she's handling Autonomy carefully. She is aware that the 3,200-employee firm could easily get swallowed up in the 326,000-employee behemoth of HP.

"We have some work to do here because our sales force is just figuring out how to sell it too," said Whitman. "What I don't want to do is flood them with leads that they can't fulfill in a very high-quality way. It takes 100 good installations to have a great reputation in technology, and takes one bad one to wreck it."

Could Whitman's kid gloves approach to Autonomy be interpreted as a sign of a new strategic direction for HP, one that's focused on long-term impacts as opposed to the next quarter? That remains to be seen, but the things that Whitman has said and done so far suggest that this is so. Some partners most likely are still withholding judgment, but if Whitman is able to keep open lines of communication, both within HP and with the channel, she stands a good chance of building a level of consensus that HP has not seen in a long time.

Dasher Technologies' Vigliecca, for his part, said HP competitors are not going to like an HP that stays on message. "Any company that's competing with HP should realize that solid leadership makes HP a formidable foe," he said.

Steven Burke and Scott Campbell contributed to this story.

Printer-friendly version Email this CRN article