While the HP Discover party animals rock out to Don Henley and Sheryl Crow tonight, a swan song rings in their ears. HP CEO Meg Whitman sang off the grow-to-be-big era of Hewlett-Packard at the annual show of HP and its partners. About 10,000 were on hand in Vegas, but only a modest fraction of them heard the notes of a coda to consumerization strategy. HP will pivot to IT pros even while its consumer operations retract. It will be quite an act to observe, worthy of anything in the zoo of Madagascar, to see the needed cash emerge for overdue R&D.
HP will still sell its products to the world at large. Whitman said he loves HP's printers, and she decided to hang onto the PC unit after HP tested the concept of a spinoff. But she's calling a tune that leads Hewlett-Packard back to business computing. The company is so far off that track that Whitman is calling the new strategy a turnaround, one that's going to take years to finish. Longer than your average Dreamworks animated feature takes to draw and render, using HP's systems.
Meg's keynote, complete with a finale from a cartoon lion, wasn't viewed live by all that many working on the busy expo floor, each trying to connect with as many prospects as the three days would allow. CEO speeches are given for big customers who don't need to see things at an expo, the analysts who tell these customers what to think and buy, and user group officers and volunteers. They shouldn't expect overnight change, which may disappoint the investors who put money behind a company that has been getting bigger for being the sake of No. 1, ever since Carly Fiorina became the first non-HP CEO in 1999.
"Most turnarounds in American industry are anywhere between four and five years," Whitman said. "And we’re at the beginning of the journey, not the end of the journey." HP's been bleeding new business and seen its stock at five-year lows at the start of that turnaround. The shares are down 8 percent since she took over nine months ago. This was her first HP Discover keynote.
"The kind of turmoil that HP has had at the top of the company can take a toll on companies, employees, shareholders," said Whitman. "But I've been surprised at the resilience of HP people -- HP is a remarkably resilient company." As the wall-to-wall screens displayed a large flock of birds literally darkening the sky, Whitman said "HP will darken the skies with the magnitude of our response."
Thibodeau, who covered the 3000's ouster from HP's product line for Computerworld, had the classic press experience during Whitman's talk. He sat next to a customer and watched what they took down for notes, then asked afterwards how they felt. Most of them didn't think the future of Itanium was of any express concern. But the enterprise manager still using HP products has a different scope of future than most of us. One manager who runs a NonStop system -- HP bought up this business when it acquired Tandem -- thought even half a decade away from too soon to weather changes in his server. He called it "the Tandem." This gives an idea of the loyalty HP bought into when Tandem become NonStop. It all runs on Itanium now.
Arens said the coming layoffs are a concern, but HP, the company, seems solid. His main worry is about Itanium. A platform change, if it were to happen, would be at least five years off. But even that time frame would make him "a little nervous."
"There's too much on the Tandem that is mission-critical [and] to jump out of it five years from now would be crazy," said Arens.
Whitman didn't address specific product lines in her speech. We're reminded of the direct shout-out HP managers forced onto Carly in 2000, when a CEO speech assured the users at HP World the server had a certain future in HP's plans. What sort of future was revealed about a year later.
HP's Services unit, now working to justify its 140,000 headcount, came in for special mention in Whitman's speech. "That's our future," she said. "The power of hardware, software and services, delivered as solutions." HP will play out its comeback with the pieces it's got left on the game board. No more consumer-aimed tablets, no devotion to making a reseller model built for printers do the job on enterprise business. That last one was former board director Dick Hackborn's dream, after building a massive printer empire that made HP a household name in ink.
The one hour of Meg's keynote is online. It's complete with a visit from the lion Alex of Madagascar 3, the summer film opening tomorrow that the studio's Jeffrey Katzenberg said wouldn't be possible without HP computing. "Don't worry," Meg said after Alex was onstage. "Alex is one lion that Jeffrey and I can both handle."
The roar of a reboot of HP is another kind of beast that can't be herded onto the stage of the future so easily. HP wants to capture the future with its cloud concepts. That's going to take as long as the company's comeback, so Whitman wants time to discover how to make users disregard massive layoffs and focus on big product ideas.