Hewlett-Packard CEO Meg Whitman knew what was at stake when she arrived at the company's Palo Alto, Calif., headquarters at 3 a.m. on Oct. 6 with her executive team.
Three years earlier, Whitman, then a member of HP's board of directors, had witnessed firsthand the tailspin the company was thrown into after then-CEO Leo Apotheker revealed the company was considering spinning off its PC business. That news, which was accompanied by the announcement that HP was spending $10.25 billion to buy software maker Autonomy, had wiped out $16 billion in HP's market value and eventually led to Apotheker's ouster.
Now Whitman and her tight-knit executive team were at the company's headquarters in the dead of night to start making phone calls to inform partners about a plan to split the Silicon Valley institution into two new Fortune 50 publicly held companies. It was not lost on Whitman just how critical the next few hours would be to HP's future.
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"The communications had to land really, really well, especially given the history under the previous administration when we said we were maybe thinking about selling the PC business," said Whitman, recalling the early morning rendezvous to "follow the sun" across the globe with the phone calls. "We wanted to make sure that it was communicated well, that partners actually got a personal phone call from somebody, whether that was me or [HP Executive Vice President of Printing and Personal Systems] Dion [Weisler] or someone in the field."
Weisler, who was being named as CEO of HP Inc., the new PC and printing business company, recalls making phone calls, starting with reaching out to partners in Asia. "The communications was operated at military precision," he said. "The team did a fantastic job because we learned from several years prior where I think we figured out exactly what not to do."
By the time Whitman had called Tom Richards, chairman and CEO of CDW, the $11 billion solution behemoth that is one of HP's top partners, Richards had already received two other phone calls. "Better to have three people call you than nobody call you," said Whitman.
When all the calls were completed, the reaction could not have been better from partners, customers and investors to the formal launch of Hewlett-Packard Enterprise, the new $57.6 billion enterprise services, systems, software and infrastructure business; and HP Inc., the new $57.3 billion printing and PC business.
It was a fitting coda to a series of long, collaborative discussions that Whitman had begun with the company's board of directors starting in the late spring. It was by no means, Whitman said, a case of her deciding on the split and attempting to "jam it" through the board.
"It was multiple sessions because this was a big, huge decision," she said of the board meetings. "And so we had to think it through. We had to think of the alternatives. What is the best way to accelerate this transition? So this was a multi-month, very deliberate process where we thought: 'Is this the right thing to do for the company and for customers?' "
The historic split is now shaping up to be what solution provider partners are calling "double trouble" for HP competitors. In fact, partners say the split, which is slated to take effect Nov. 1, is poised to power a new business-outcome-focused channel sales model that puts Hewlett-Packard Enterprise and HP Inc. in prime position to take out those competitors still pushing old-school product-based channel economics.