Whitman At BoB Conference: HP Split Will Allow Partners To Make More Money--

Hewlett-Packard CEO Meg Whitman Wednesday told several hundred of the industry's elite solution providers that they will be able to make more money with HP as a result of the split of the company into two separate publicly traded Fortune 50 companies.

"I think we are just going to get better and stronger and more important in terms of you growing your business and making money," said Whitman in a wide-ranging 50-minute interview with The Channel Company CEO Robert Faletra at the BoB Conference in Orlando, Fla.

Whitman pledged that HP's channel commitment will remain steadfast as it moves to break up the company and even after the split, which is expected to be completed by the end of HP's fiscal year 2015 ending Oct. 31, 2015.

The question-and-answer session marked Whitman's first appearance before a group of solution providers in the wake of the news about the split. HP said Oct. 6 that it will be splitting up into a $57 billion Hewlett-Packard Enterprise business, which will include enterprise systems, software and services, and a $57 billion HP Inc. business, which will include the PC and printing business.

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"We will continue all the progress we have made in the last three years," said Whitman, referring to the major increase in channel investments that she initiated when she took the helm of the company in September 2011. "That will continue. There is no question about it."

Whitman, who will play a role in both new companies, said partners can expect continued channel investments such as HP's $100 million bet on the Unison Salesforce.com portal, which is winning raves from partners, along with continued improvements in areas such as deal registration and market development funds.

Whitman's appearance at the BoB conference came on the same day that HP said it was continuing a share repurchase program, a move that was widely seen as a confirmation that HP-EMC merger talks were off the table. When asked if she could comment on reports that HP's talks with EMC had come to a halt, Whitman answered, "No."

In an interview with CRN, however, Whitman said Hewlett-Packard Enterprise will have more than $7 billion in cash to make acquisitions. "We will be in a financial position to do M&A, to make more investments in R&D as we streamline our costs even further in ways that will help the company," she said.

"I am really excited about the separation," she said. "This is the right thing for our partners. It is the right thing for our employees. It is the right thing for our investors. I think we are going to be in a really good position, a stronger position than we are today."

Whitman told CRN she expects the split to produce two faster, more agile and more innovative companies in their respective markets. In fact, she said the split will drive deeper channel investments and higher R&D investments. "We ought to be able to free up more money for R&D, more money for go-to-market to help partners sell solutions," she said.

Ultimately, partners will see more innovative products from both companies as a result of the split, said Whitman. "In the beginning, the middle and the end, this comes back to product," she said. "What is the product, what is the solution that you can offer to your customers."

Referring to HP's founding in a rented garage in Palo Alto, Calif., 75 years ago by Bill Hewlett and Dave Packard, Whitman said: "HP was born in a one-car garage. I think we just moved to a two-car garage. Same garage, but a bit more focused and [with more] speed."

UCLA Professor of Economics Lee Ohanian, who gave a keynote address on future economic growth and innovation at the BoB Conference, praised Whitman's decision to split up the company. "When you see companies fail, often it is because they don't split things up," said Ohanian. "The big ocean liners are hard to turn. Smaller ships are more nimble."

Ohanian said Whitman deserves credit for taking over an organization that was in duress and making progress in a turnaround. "She took over an organization under distress," he said. "There was a record of some bad decisions," he said. "I think she is doing a great job."

Bruce Geier, president and CEO of Technology Integration Group, San Diego, No. 70 on the CRN Solution Provider 500 list with $400 million in sales, said he sees the split leading to two more nimble companies in their respective markets that will accelerate innovation. "It's a great move for HP," he said. "Meg's leadership is very good and positive for the company. She is very channel-centric."

Geier said Whitman has fixed the "damage" that was done to HP under former HP CEO and current Oracle co-CEO Mark Hurd. "Our HP business is growing again," he said. "It's more a channel-friendly and partner-aligned company under Whitman. They are trying to drive business and get the channel involved. That is not the way it was before."

Geier said he sees the opportunity for Hewlett-Packard Enterprise to grow dramatically through acquisitions. He sees such acquisitions lowering his total cost of sales as he brings a more complete solution to the market from HP.

Joe Vaught, owner of PCPCDirect, an HP Platinum partner based in Houston, praised Whitman for bringing HP back to a strong and stable company with a best-in-class partner program. "She has turned it around," he said. "They are my No. 1 partner."

Since Whitman took the helm three years ago, Vaught said PCPCDirect's HP business has grown by more than four times -- from $30 million to about $124 million in total business that he participated in with HP. Vaught praised Whitman's decision to split up the company, saying it will result in two more competitive organizations. "Her timing is perfect," he said. "I am happy as a clam at high tide that they are making this move."

Kelly Ireland, founder and CEO of CB Technologies, a Kirkland, Wash., HP Platinum partner that sells HP enterprise and PC offerings, said the profitability of her HP business has increased a whopping 35 percent over the past 18 months as CB Technologies has embraced HP's "new style of IT" product portfolio.

Ireland said she expects to see an additional increase in profitability as Whitman and her management team drive forward with two new companies. "I think HP is capable of making more progress in the next 18 months than they have in the last three years," she said. "Look at what Meg and her team has done over the course of the last three years. She has taken a behemoth and is just shy of doing a 180-degree turn. I expect 2015 to be a banner year for HP and its partners because of what Meg and her team are doing."