Q&A: HP's Top Strategist Says HP Is Mounting An Innovation Offensive

Mohamad Ali, who joined Hewlett-Packard as chief strategy officer just five months ago, spoke with CRN Editor News Steven Burke about the company's technology innovation offensive and HP CEO Meg's Whitman's five-year personal commitment to turnaround the company. Here is an excerpt from the discussion with the 20-year industry veteran who has helped lead the charge on turnarounds at IBM and Avaya.

You joined the company five months ago. Talk about the decision to come to HP.

When I saw the HP opportunity, I just couldn't resist. I mean there is no other company like HP on the planet. It has one of the most compelling portfolio of products and people. The [Research and Development] Labs are just riddled with great stuff. Meg [Whitman] and the leadership team want to bring all of that to market.

What is the strategy message for partners and customers?

If I had to boil it down to one word: Innovation. We are going to innovate. We are going innovate with our products, our services and internally within the company in terms of our processes to make the company a much more efficient place. Meg [Whitman] has talked about this extensively. It is driven by a number of inflections in the industry: cloud, security, information optimization/big data and mobility.

Mobility is one we haven't talked about much, and we are going to start talking about it more.

Those four inflection points are really transforming the kinds of solutions our customers want. And we are sitting on this massive amount of technology to deliver that.

Just take one example of that: cloud. Today we are offering three types of clouds. We are offering a private cloud. We have this very large enterprise services business that delivers [it as a] managed service so it is an easy transition to a private cloud.

[We are also] offering cloud in a box as cloud technologies enabled with the server, the storage, the networking, the software.

And then, finally, we are building a public cloud, which we have announced. We have customers. It is the only enterprise-grade public cloud out there. We will offer enterprise level SLAs [Service Level Agreements].

Talk about the difference between the HP Public Cloud and the Amazon Elastic Compute Cloud, which was down on Christmas Eve.

Others will not offer the types of SLA we are going to offer. The reason we can do that is because we are running huge parts of the U.K. government [and] the U.S. government on our enterprise services cloud today. And, we have the experience to offer these types of SLAs.

What is your message to customers that have been dissatisfied with Amazon?

We are starting to ramp up that message now. The offering just came online very recently.

NEXT: HP's Top Strategist On Competing With Amazon In The Public Cloud Market

Who do you see as your top competitor in the public cloud marketplace?

There is a place for Amazon. There is a place for Microsoft. There is a place for HP. There are things that we do together and things that we do differently.

You mentioned something I haven't heard before: this five-year Meg Whitman [personal] commitment [to turnaround HP]. That five-year commitment -- talk about that and how important it is.

I mean it was important to me coming to the company. I actually asked Meg: "Are you in this [for the long term]?" At the time, there was some concern that, you know, depending how the election goes, she might end up in the cabinet or in government. She was very clear to me when I spoke to her that she is in this for the long haul. She has now repeated publicly that she is in this for five years. And, it is public information that she is working for a dollar.

What does that five-year commitment say to where the company is going?

I think it says a lot. I think she [Whitman] believes that we are going to be a phenomenal company again. I think we are a strong company. We are very profitable. This is not like IBM in 1989 where the company had to borrow money to pay the employees. We have $5 billion in free cash flow. It is a profitable company. We have great products. We have great technology. But, it is going to take a little while for us to get back to where everybody wants us to be, where we want to be as "a" or "the" leader in the technology industry. And I think Meg [Whitman] believes that, but she also believes it is going to take time. And, she has committed this amount of time to make that happen.

I got a little nervous when I saw in the 10K the possible sale of underperforming businesses. My first question was: Are we going back to a situation where HP may look at selling off the personal systems business or the printing business? What is HP's commitment to the personal systems business?

We are committed to the personal systems business. We are committed to the printing business. We are committed to the PC business. Meg [Whitman] has said this. I am going to repeat that. The stuff that you see in the 10K is responsible stuff that any company should always be doing: looking at the things that fit, looking at the things that don't. But, we have said repeatedly over the last year that we are absolutely committed to the PC business. We are spending tons of money building new [innovative] products.

NEXT: HP's Top Strategist On The Competitive Positioning Versus Apple

Talk about how HP Is positioned strategy-wise versus Apple with the HP ElitePad 900 tablet and even the strategy with the notebooks. What is the competitive positioning vis-a-vis Apple?

I think from an individual product point of view you can see that these [HP] notebooks are wonderful notebooks. They compete extremely well with the Apple notebooks. In terms of simple things like not having to carry a whole bunch of dongles and extra adapters, it is all in here [pointing to the HP Envy Spectre XT Notebook]. The form factors are great. The ergonomics are fabulous. We have hired a fairly large industrial design team that is heavily focused on these things.

With the HP ElitePad 900 tablet you are offering a no-compromise tablet versus the Apple iPad. Is that the strategy versus Apple: no compromise, security, a tablet that is commercial grade.

That is a great way to look at it. It is no compromise. It comes with security. It is fully serviceable. You can open the back. You can fix it. If you want 20 hours of battery life, you slip on a sleeve. If you want the extra ports because you have got a commercial application, you slip on a sleeve.

How important is the ElitePad tablet strategy-wise?

It is huge. It is a real innovative product. It tackles a market that really isn't well served today. The commercial tablet isn't well served. You have a consumer product that is trying to wedge itself in here. And, here is a commercial device that is made for that market that is a beautiful device with no compromise.

Is part of the strategy to get partners to sell the full portfolio including cloud and software?

Absolutely. We want our partners selling the full portfolio. Our partners are extremely important to us. HP has always prided itself on having a vibrant partner ecosystem. At the end of the day, the one thing I can say is that if we do our part and put compelling products and solutions in our partner's hands they are highly capable of blowing this market out.

Talk about Meg [Whitman] as a leader and the difference she has made in the company?

Meg [Whitman] is an incredibly strong leader. She is great with customers. She loves our customers. She spends a tremendous amount of time with the customers. She also has a deep strategic background having worked at Bain. She was [involved with] strategy for Disney. She gets deeply involved in strategy. You can see this very clearly here in our PPS [Printing Personal Systems] portfolio. Ink in the office is a very strategic play. And, Meg [Whitman] was very involved with that.

ElitePad was very strategic. You actually can see the strategy playing out here at the PPS event. If you look at the enterprise group -- storage, server and networking -- each one of those has a major strategic play that is very public now.

Software-defined networking. We feel we are leading there. In servers in converged infrastructure taking blades to the next level. We feel we are leading there. This new project we have, Moonshot, that we can talk about that more later. That is going to be coming. More innovation on server. Meg [Whitman] was critical in driving that strategy. And then finally in storage, we are sitting on top of the best high-end storage product. We now have a derivative of that for the mid-tier. Now we are going to have the best product in the mid-tier. Meg [Whitman] was very involved in the strategy for that portfolio.

NEXT:HP's Top Strategist On Morale And Autonomy

Are people underestimating the power of HP to drive the next generation of computing, to innovate, to change the market?

I can't talk about what people are thinking. But for me, I felt the market was undervaluing the company. That is a big part of why I came to the company.

What is the mood within the company?

I think people are pumped! You saw the team. They are excited about the products they are showing you. And, they have reason to be excited because it's just cool stuff. I am excited every day I go to work.

Is Autonomy a solid product?

Autonomy is a great product. As Meg [Whitman] said, we are absolutely committed to the Autonomy product. The legal stuff, we'll let other folks deal with that. But the product is great. If you think of what it is: Autonomy is really the leader in unstructured data. It's all the internet stuff that is not structured. But, it is also video. So, for at the London Olympics, for example, Autonomy was used to monitor all the video traffic, all the TV traffic, looking for bad guys for the London Police Department. That is the kind of thing it does.

Where do you generate massive quantities of unstructured data: paper. All this print stuff. Now, you go to your printer and you can scan some stuff. Where does it go? It goes right into Autonomy as a workflow engine. You can then use those documents as part of your workflow. If you are an insurance company and this is your insurance claim form, you scan it. All of a sudden it is in your insurance workflow. So, then you go back to your desk, you click a few buttons and you process it to the next person. Really, really easy. And, you don't need a scanner to do it. You already have this printer device. It is now an integral part of your workflow. That Autonomy printer scanner connection is actually huge.

What are three key innovative technologies that you would single out.

I would say our software-defined networking, our ElitePad and notebooks and our OfficeJet Pro X. That is a fundamentally revolutionary product. What we have done is taken the ink technology that is super high-end and moved it down. That OfficeJet Pro X is very different. That is true innovation. To be able to run ink at 65 pages per minute and have it come out bright and at 50 percent reduction in cost -- that is huge innovation.

PUBLISHED JAN. 10, 2013