Whitman: HP's 'core' is infrastructure

CEO Meg Whitman says company to focus on strength of its IT infrastructure offerings, with software part of the mix, as she moves to end confusion over company's future and restore customer confidence.
Written by Jamie Yap, Contributor

VIENNA, AUSTRIA--In what was her first keynote speech since taking over the helm at Hewlett-Packard (HP) two months ago, CEO Meg Whitman stated that the company's core strength is in IT infrastructure and, with this in mind, is working to restore confidence among customers and investors.

Speaking at the HP Discover conference here on Tuesday, Whitman stated she is moving away from the software-focused direction that her predecessor, Leo Apotheker, had favored and stressed that IT infrastructure is where the company's strength lies.

"The core of HP is infrastructure. We are the world's largest provider of IT infrastructure…and our servers, storage, networking, PCs, printing and imaging [make up] 70 percent of our revenue. We need to stand up and be proud of that core," she stated.

The CEO elaborated that the company's strategy will now be to expand its infrastructure core with software, services and, ultimately, "solutions that enable organizations to make it work".

As for the future of its software line, Whitman said: "We are not in the software business to transform software. We are in software to solve [our customers' problems]."

In a separate media interview, Bill Veghte, executive vice president and general manager at HP Software, pointed out that the debate over whether HP is a software company or not is missing the point.

"It's not about software or hardware. It's 'here are the solutions'. In that [context], this demands world-class hardware and software," he said.

Defining HP's business vital
Analysts ZDNet Asia spoke to said Whitman's efforts to define HP's business strategy were necessary.

Rohit Partha, industry analyst of ICT practice for Asia-Pacific at Frost & Sullivan, told ZDNet Asia in an e-mail before the conference that HP's lack of focus and uncertainty had affected the company's business and allowed rivals to benefit.

"Uncertainty about HP has led to its stock price plummeting and rivals have played up this uncertainty to court its customers and partners. Whitman has to improve HP's tarnished image by clearly defining its path forward," he said.

Following her speech, Matt Healey, program director of software and services at IDC Asia-Pacific, said what Whitman spelt out will help quell the "turmoil" surrounding the company.

"Under Apotheker, HP generally lost its focus. Customers did not understand the direction HP was going," he stated in an e-mail.

"This reassurance is far more important than any product announcement. It shows that Whitman understands that HP is an infrastructure company and can manage it…demonstrating that the turmoil is done."

Customers to come first
The CEO also pointed out that she wanted to "put the HP drama out of the headlines". This drama possibly refers to the company's decision to spin off its PC business in August before changing its mind and retaining the unit in October, as well as its indecision over what to do with WebOS, as some of the headlines it had been generating in the past months.

She also recognized that the frequent leadership changes, particularly the "CEO frustration, was hard for everyone".

Addressing these, Whitman emphasized the importance of building up the camaraderie and confidence with customers to that HP can go back to being the "trusted, reliable and steady partner that you can count on day in and day out".

She drew the connection between her previous tenure as head of eBay, which was a customer of HP's products, and her current role to reassure customers that the focus will now be on them.

"I have walked in your shoes. I was a huge buyer of technology from HP and HP's competitors. [That] the CEO of HP was a customer [means] that we orientate everything we do through the lens of the customer," she stated.

This means that the company needs to become one team, so that customers need not spend time figuring out whom to turn to when they need assistance, Whitman explained.

She added that there will be significant investments made in e-commerce to give the best business-to-business experience, as well as continued investment in research and development to innovate and create "products that delight and inspire".

Jamie Yap of ZDNet Asia reported from HP Discover 2011 in Vienna, Austria.

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