back to article HP's Whitman: 'I will turn this company around – by 2016'

During a meeting with financial analysts on Wednesday, HP CEO Meg Whitman said her plan to turn around the ailing company was on track, but the restructuring won't be complete until 2016 and investors should expect HP's earnings to shrink even further before the work is done. In August, HP reported a loss of $8.9bn, with …

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well

The way things are going HP and Dell are going to be the Packard Bell and Digital of this generation. Mobile computing has not been kind to either.

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Re: well

HP were pretty unkind to mobile. Letting the PDA/phone business fester, then the Palm fiasco. Don't blame mobile!

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oh?

No mention of phones & tablets? Have they changed their mind on those again?

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Anonymous Coward

Re: oh?

It is implicit.

They just admitted that they need to ram up R&D to actually deliver anything competitive that is new.

Without it, it will be another failed mee too shop and ship designed by Asus (and executed by Asus too).

As far as dates it also sounds about right. Finally - a realistic exec that knows what is she doing. An aircraft carrier has one hell of a turning circle radius so even if you swing the rudder all the way into the right direction it will still take a while for it to turn.

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Anonymous Coward

Re: oh?

"They just admitted that they need to ram up R&D to actually deliver anything competitive that is new. Without it, it will be another failed mee too shop and ship designed by Asus (and executed by Asus too)."

I doubt there's much real R&D in releasing either tablets or phones. The core components will be supplied by other people, the IP will be owned by other people, chances are the assembly will be by other people. Samsung screen, Qualcomm processor incorporating ARM IP, MS or Google operating system, assembly by Foxxconn - or similar for each element. So the R&D amounts to speccing the device from the parts bin, agreeing the design of the case, paying a "creative" agency to come up with a stupid name, and signing a few procurement deals.

That isn't going to save HP in my book, particularly when you've got a fistful of loss making or shrinking businesses fighting for third or worse place in the mobile market, and a wealth of OEM's and not-yet-heard-of Chinese companies ready to step forward.

The plan to up the margins in BPO is the most credible part of the plan, but that's a problem in an over-supplied market, and having offshored all those jobs, there's little differentiation between the BPO providers. Look at how GM have brought back their IT in house - that's probably the start of a trend amongst companies unhappy with rubbish offshored, outsourced services that don't save them money. I work for a company supplied by HP, and our routine operating costs are higher now than they were when we did the job ourselves, and the service is inflexible and often rubbish. HP smooth talk our board into believing it is a success, but on the ground we know otherwise. It seem to me that HP's BPO proposition is "we're good at pulling the wool over customer's eyes", but I'm not sure that's a recipe for long term success.

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Anonymous Coward

Isn't all of HP's revenue cloudy at this point?

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R&D is good.

It seems a long time since anyone invented something new.

How's the varistor doing?

Any plans to research new methods of data entry?

What about higher screen res? Any movement on making x1500 screens for the price of x768?

And software? any good stuff from enterprise that could be packaged up? intelligent data mining? The post-spreadsheet data mangling app? translation? natural language? Visualising? Project management?

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Re: R&D is good.

If I were a shareholder, I'd be happy if the consumer model printers stopped sucking so much sewage through a straw and became competitive again. I changed brands after exchanging a few samples each of two different models that failed to feed out of the box. I literally laughed in the face of the poor kid in the shop at the end of the fiasco when he told me that his HP rep said I had to calibrate it to the paper thickness. Sorry Jose, nothing personal.

Hey Meg, to misquote Roy Scheider, "you're going to need a bigger styptic."

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Re: R&D is good.

"If I were a shareholder, I'd be happy if the consumer model printers stopped sucking "

Not sure there's much margin in making and selling consumer hardware, so not much point for shareholders in investing in the consumer product. Dell struggle to make money in consumer, all the consumer focused PC makers struggle, I can't see why HP would be different. There's also the legacy of poor products, where consumers won't give them a second chance. My last HP was a crappy 1100, years and years ago, and I was so angry at its crapness that I've resolutely bought Canon ever since, and they've never let me down. HP stuff gets decent reviews, comparable to Canon, but why should I trust HP again - it will take something quite special, like A3 printing from a printer physically no wider than a normal multi-function A4 printer, and barely any more expensive than competitors A4 machines (it could be done). But why invest for that, when there's so margin?

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Re: Not sure there's much margin

If there's no margin, they need to kill or spin off the business. If they intend to keep it, they have to fix it.

It isn't just the consumer market either, the business end sucks as well because they aren't doing what business needs. About 5 years back I got into a bit of a fight with the purchasing manager because every time he bought a new printer for the company it was a different model that required us to stock a different toner, and our toner supply closet was already as well stocked as the local Office Despot, if not better. He said "Tom, I tried. But they just don't keep printer models for more than 6 months these days." When I checked the HP website he was right. That has to be costing HP in tooling costs. Manufacturing makes money when you can write off the investment over a period of years, so products with a 3-6 month shelf life kill HP's bottom line too. Time was you could buy the exact same HP model for 4 years and expect serviceable equipment for 6+ years. Even if they don't get back to that level of machine reliability, they need to get back to that level of ordering reliability.

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Anonymous Coward

"How's the varistor doing?"

It's doing fine. Unfortunately, it's the illusory memristor upon which HP seems to have pinned its hopes. Doubtless a warehouse of Itanium power is crunching away on that problem, when not tasked with tracking missing chairs.

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Coat

oh yeah

that's the bugger. Late, tired etc.

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Now if it would be the 1970s all over again

There surely would be a company like "Grid" bringing out a revolutionary new product utilizing the Memristor. Unfortunately it's the 2010s and no company is going to risk anything any more.

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FAIL

Dead and buried

"[T]he old HP" was spun off a long time ago; to the extent it still exists it's now part of Agilent and/or Philips. What little remained (calculators) was killed off. Their servers aren't as horrible as their desktops[1], but HP has entered a Brocade-style level of brain-hurting stupid. Sure, they'll sell you an OOB management card — but you wanted to actually use it? That'll be extra. Pay for a RAID card, and again for a license code to actually turn it on. If I want to be nickeled-and-dimed to death (by cats or otherwise), I'll talk to Michael O'Leary.

Then there's Enterprise Services, which survives only by finding executives dumb enough to outsource their IT so that they can be dragged to the ATM by their genitals for a multi-billion-dollar withdrawal. Sure, there's always a nice stable of fat and stupid government customers — HP is still getting business after NMCI, so how could they possibly lose? — but on the gripping hand, what happens if the US government starts blacklisting contractors with a habit of nondelivery? Goodbye, easy money. (Okay, you can laugh at that now... but stranger things have happened.)

[1] I have a sneaking suspicion that their desktop power supplies are designed by crack-addled monkeys somewhere in Hebei, to say nothing of the clusterfrak that is their BIOS.

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Anonymous Coward

Re: Dead and buried

Quote: "but on the gripping hand, what happens if the US government starts blacklisting contractors with a habit of nondelivery? Goodbye, easy money. (Okay, you can laugh at that now... but stranger things have happened.)"

Indeed. If the rumor is right UK government intends to do that. Actually, they formulate it as "previous delivery record".

That is way more surreal than Uncle Sam doing that, trust me.

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Re: Dead and buried

>If the rumor is right UK government intends to do that.

It's quite a good idea. Snag is /all/ of their suppliers should be on the list. First one they name will be straight to the high court like a spoiled teenager: "they are still talking to Frank! It's sooo unfairrr! Wah!"

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WTF?

Sure, they'll sell you an OOB management card

" — but you wanted to actually use it? That'll be extra."

'OOB Management card'? Have you been in a coma for the last decade? Because that's around the time when OOB was still on separate cards. All HP ProLiants except the (soon to be replaced) ML150 G6 come with integrated iLO, and (aside from the 100 Series of entry level servers) has been that way for many years. The same is true btw for the Integrity servers.

iLO works out of the box. You only pay extra if you need certain functionality like KVM which makes sense as most data centers use their own KVM implementations anyways.

Now lets compare that with Dell PowerEdge servers where even on the 11G models (not 100% sure about the 12G but it appears that it's still the same!) even basic iDRAC (Dell's OOB solution) was an option (and not a cheap one!) on most PE models. And to get the full functionality (for which with HP you only pay for a license code) on a Poweredge this means paying for the standard iDRAC module plus paying for the iDRAC Enterprise module (yes, you really need two hardware modules!). And if you didn't order your server with iDRAC in the first place try asking Dell how much the upgrade is (if it is available for your PE model at all).

"Pay for a RAID card, and again for a license code to actually turn it on."

Nonsense. The current Smart Array cards work fine without any license code (as did their predecessors). The optional Advanced license is for RAID6 plus some other features only which aren't relevant for most users anyways.

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Pint

@Brad Ackerman

If I could upvote your post multiple times, I would've.

HP has pissed away an extraordinary legacy of hi-tech innovation. It has sacrificed intellect and science and replaced them with shiney, shallow MBA bullshit peddled by smarmy dumbed-down corporate drones.

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Anonymous Coward

Best of luck

Unless Meg is literally a miracle worker... there ain't a snowball chance in Hell but she deserves an E for effort in my opinion. HP is so lost ans so out of touch with reality and their former customers that Meg would need to fire 99% of the current employees and start over with some intelligent life form, because almost none exist at HP at the moment.

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Anonymous Coward

No mention of storage either

Which is no surprise as they seem to be hell bent on making it so complicated and expensive to but that potential customers give up and go elsewhere for implementation time scales that lead to delivery before obsolescence.

AC cause I'm probably still covered by a ND

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Anonymous Coward

Now it all makes sense!

They are getting rid of almost everyone on the Aviva contract and leaving it to the "Best Shore" team. That is the ones who don't have much experience and screw everything up + try to cover up their mistakes. I wonder how long until another Nat West? And then a big fat court case.

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Anonymous Coward

Oh Meg

Balls to the investors, on the ground Meg is viewed with far more positivity than Leo the Joke was.

Just a shame that they've got rid of everyone with a brain, in utterly relentless favour of "best-shoring" and redundancies.

Oh and a shame that the clueless sales people left behind recently lost us some major, gigantic service contracts too.

A business runs on its employees Meg, and HP has already lost its best people, and will lose 29,000 more until your little plan kicks in. Good luck, i'll be elsewhere and beyond caring by then.

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Re: Oh Meg

"Just a shame that they've got rid of everyone with a brain, in utterly relentless favour of "best-shoring" and redundancies."

Given the crappy performance over the past decade (or two), and the fact that HP will soon have no US employees on the payroll, isn't it about time they "best shored" the main board? Performance may not be any better, but it couldn't be much worse, and at least investors wouldn't be paying Silicon Valley salaries.

Where would be "best shore" for the directors past and present of HP? Yemen? Pakistan? Chechnya? Zimbabwe?

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Vic
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Re: Oh Meg

> Meg is viewed with far more positivity than Leo the Joke was.

Isn't that rather damning her with faint praise?

Vic.

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Anonymous Coward

and the ES issue not mentioned was

No focus on ES actually getting more contracts or delivering better, just better pricing? Decent pricing is fair enough, except for the major clients not having the capacity to do the equivalent of a quantity surveyors job.

Clients demand and get "contract offers" that are not sustainable for anyone. Other outsourcers would simply under bid, get the contracts and continue substandard service. And the outsourcing management would continue in blissful if not willful ignorance. A sensible cutting costs approach might be pruning an unwieldy management structure focussed on next months profit/loss, not doing the whole project efficiently over its lifetime.

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Coat

Re: and the ES issue not mentioned was

"Better pricing" is a business way of saying "stick to our customers". The chief problem is the amount of dead weight at every level, rife with people hanging on to a job with no actually skill to execute. That likely extends as high as Meg's direct reports and probably even to the Board as well. But there's so many people collecting a paycheck, but not busting their collective asses, that I doubt Meg's plan will ever fix the underlying issue.

People make the organization great and almost all the good ones are gone. There are a few that remain, who keep the whole ship afloat and like the responsibility that comes with.

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Be a devil and go for 2015

Earlier this week we heard about the HP ElitePad 900, a Windows 8 tablet aimed at the business market. With the wrong sized screen for Windows 8 - too narrow in ladscape mode to support the key Windows 8 Snap" feature.

Fire the people responsible for making this kind of cockup in the product lineup Meg and maybe 2015 not 2016 is achievable.

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"HP needs to quit giving away the farm and charge its enterprise customers more."

Trouble is that on the big server side, it goes like this:

HP Enetrprise customer: "If I'm going to be forced to migrate all my crap from PA-RISC to something else, why would I go with your Itanium products?"

HP Rep: "Er, er, er...............we could give you a huge discount?"

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WTF?

How to be a CEO

1. Make arbitrary changes

2. Tell everyone you expect to do badly for several years, but after that everything's going to be ok again

3. Take several years worth of CEO scale pay

4. Not so bothered about 4, see 3

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