Whitman: HP Has Better Hand Than EMC Or Cisco

Hewlett-Packard CEO Meg Whitman said HP has a leg up on EMC and Cisco whose VCE converged infrastructure joint venture was radically altered on Wednesday.

Whitman told CRN in an exclusive interview that HP has a first-mover advantage against both companies now that HP has moved to accelerate speed and innovation by splitting into two publicly-traded Fortune 50 companies.

"We'll see what they do," she said, speaking about how large competitors, including EMC and Cisco, are pressured to be more nimble in a technology market moving at lightning speed. "I think we are ahead of the curve here. My sense is we have a sixth sense on the timing of this [HP split]. First is better than last."

[Related: CRN Exclusive: HP CEO Whitman On Dell, Autonomy, And Future HP Acquisitions]

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The pressure building on storage market leader EMC and networking market leader Cisco was evident Wednesday as EMC announced it was buying much of Cisco's stake in the VCE converged infrastructure joint venture. Cisco, who previously had a 35 percent stake in VCE, will now have a 10 percent stake.

EMC shares closed Wednesday up about one percent to $27.37 for a recent market value of $55.52 billion. Cisco shares closed down 2 percent to $23.26 for a market value of $118.61 billion. HP shares closed down one percent to $34.49 for a market capitalization of $64.37 billion.

Whitman told CRN that HP's strong storage offering, including its fast-growing 3Par line, competes well against EMC, while HP's aggressively priced networking offering is gaining share against Cisco.

"We have a fabulous storage offering, so if you think about the core of EMC it is storage," said Whitman. "And we have a fabulous 3Par offering that is the same architecture from top to bottom, high-end, mid-tier, and then our introduction ultimately of our low end. Today we OEM (our entry level) MSA but we are crafting a 3Par low-end offering. It is one architecture. It really is for the new style of IT. And we have got a very good software-defined storage offering coming."

As for Cisco, Whitman said HP has a "price" and total cost of ownership advantage that has resulted in HP, No. 2 in the networking business, gaining share year after year.

NEXT: Whitman Plans To Increase Storage-Networking Innovation Under HP Enterprise

"What I want to do is I want to increase the share gain of our storage and networking business under Hewlett-Packard Enterprise," she said. "And then of course we are the king of the server business. And we ought to be able to win in converged infrastructure. I think we are doing a good job there. I think we will get even better."

Kelly Ireland, founder and CEO of CB Technologies, a Kirkland, Wash.-based HP Platinum partner, said she has made a big bet on HP that is paying off in sharp sales gains for CB. In fact, she said CB, which has hired 24 new employees for its HP practice over the last two years, is on track to double its HP business over the next 18 months.

"I bet on HP and I am growing my company," she said. "I think I made a very good bet."

Ireland sees HP's split accelerating the enterprise innovation against Cisco and EMC.

"It is all about being nimble," she said. "You have to be structured so you are nimble. That is exactly what HP is doing with the split."

Whitman, for her part, said Hewlett-Packard Enterprise will have the advantage of more than $7 billion in cash to do acquisitions as it accelerates its innovation march against EMC and Cisco.

"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 I think will help the company," she told CRN.

Whitman said that in a market where many companies are walking away from infrastructure investments, HP is doubling down on it.

"So many companies are walking away from infrastructure, even in the software-defined world you do not want to be limited by your infrastructure," she said. "We think it is a big business. We think it is a continuing business. And we are making investments. And we may make acquisitions there as well."