Meg Whitman, CEO of Hewlett Packard, spent 45 minutes on stage at Gartner Symposium in Orlando, a couple of weeks ago. Â Some may say she was given a hard time based on the questions she was asked. Meg came prepared. We must remember she is the CEO of one the worldâ€™s most recognized brands. I assume she has done this before and knew what to expect. In all fairness to Meg, she picked up a company which was riddled with scandals and bad acquisitions. First there was the Mark Hurd scandal and most recently Lep Apotheker, making a slew of questionable acquisitions. If you are in IT you probably know what they are. There is no need to list them.
Throughout the interview, she was asked some pretty tough questions about business strategy, including what was HP’s best and worst acquisition in the last few years. As Meg stated in her interview, she once ran for Governor of California. Based on that experience, Meg knew exactly which questions she should answer and those she should stay away from. Meg was very clear on stating that HPâ€™s focus is restructuring, consolidation, and a shift toward R&D.
Her strategy is straight forward. 2014 is the year we should see a significant turnaround from HP.Â Or should I say, Meg, shareholders and employees hope for a significant turnaround.Â Meg stated that getting 300K+ employees to believe on a common strategy is probably one of her biggest challenges. This is why she is not looking at a short term change. What Meg is trying is rather â€œdifferentâ€ in the business world. Asking shareholders and market analysts to give HP the necessary time it takes to rebuild. When the markets are typically focused on quarterly and yearly fiscal results, can one be patient enough to wait another 12 â€“ 18 months before seeing results?
Meg has come a long way from her days at Proctor and Gamble and Ebay. She not only has the business sense, but demonstrated her ability to get technical in her discussion. Meg answered questions about hardware, cloud, networking, big data and security. On a couple of occasions, she specifically mentioned Tipping Point, Fortify, ArcSight and Autonomyas strategic areas of growth. The CEO of Cisco John Chambers mentioned publicly a few weeks ago, that he would not like to be in Meg Whitmansâ€™s shoes. She addressed that in the interview by saying, Iâ€™d rather be playing my hand than Ciscoâ€™s hand at this point. She also mentioned HP leads the Chinese market in networking. Perhaps based on what HP is showing with their 3Com acquisition, Software Defined Networking initiatives and the security focused around networking, HP may end up in a good place in sooner than we expect. HP is the one the first vendors to come out with the Converged Infrastructure message. She tried to make it clear that HP is not a hardware or software company. She emphasized HP as being a solutions company. Now with Cloud based solutions and providers leading the way, perhaps their message and bet on this technology will pay off.
Some specific technology which was new to me.
Overall I would like to give kudos to Meg Whitman. She answered the tough questions. She knew which areas to venture into. She has a lot of work ahead of her. She seems committed to turning HP around despite the negative press HP has been receiving lately.
My biggest question is. As a long term investor is 14$ / share a bargain for a company with so much potential?