back to article HPE hatches HPE Next – a radical overhaul plan so it won't be HPE Last

Hewlett Packard Enterprise has hatched a radical plan to overhaul processes, investments, people and overheads in a project that is “likely to determine” its “relevance in the years ahead.” HPE Next is an initiative which will sit under the control of Jon Faust – senior veep of finance, worldwide financial planning and …

  1. stu_san
    Big Brother

    Newspeak

    Aaaugh!

    "...Through HPE Next we will clean-sheet our operating model..."

    "...we’re going to right-size end-to-end cost structures..."

    As Calvin (of Calvin & Hobbes fame) once said: "Verbing weirds language"

    1. AMBxx Silver badge

      Re: Newspeak

      I! Hear! Another! Female! CEO! May! Be! Available! to! HELP!

  2. Anonymous Coward
    Anonymous Coward

    Paraphrase "More job cuts"

    That is all Meg has does in the company since taking over the reigns. Kill, kill, kill all the jobs.

    If keeps going like this she will not be able to improve the "operating model" any more as there will be no one left to fire.

    1. CheesyTheClown

      Re: Paraphrase "More job cuts"

      That's not true. She has turned HPE into a company that buys profitable companies that have customers that can't leave them for at least a few years, kills off their engineering teams, kills their products. Then when all their customers leave because they bought products from smaller more agile companies and now are being treated like hell, HPE either spins off or kills off the business units.

      Let's take an example like Aruba. Aruba customers understood exactly what the were buying. They could buy wireless access points and controllers embedded in switches which provided an excellent solution with predictable pricing and fantastic support. Then HPE who had a mostly shit product line because they bought a buggy as shit half finished product as 3com sucked them up and without considering the impact to customers, killed off the Aruba switching products as they were redundant and left customers without integrated controllers. Also, they started moving support to underqualified support centers in India. They killed off proper Aruba specific sales. They merged HPE networking with Aruba as if they are getting ready to spin off enterprise networking as well. The Aruba documentation and communities got hurried in HPE networking hell. Now Aruba exists by selling more equipment to companies who already had Aruba and can't justify dumping Aruba as they haven't had return in investment yet. Besides, the only alternative is Cisco and doing business with Cisco can be very difficult at times.

      Simplivity... haha oh dear... they died the moment HPE bought them.

      Nimble customers are already being beaten to death by HPE.

      Ever since HP was taken over by people who wouldn't know what an oscilloscope was if they had one smashed over their heads, HPE has been strictly an acquisitions and mergers company. They have not been a reliable source of technology for a long time.

  3. scooternusa

    So in other words...

    ...she's made a Faustian bargain.

    Thank yew, thank yew, I'll be here till Thursday.

  4. Anonymous Coward
    Anonymous Coward

    Re: Get burned?

    It's almost impossible to get a quote out of HPE at the moment. It can take weeks for a basic server quote.

    Maybe the problem isn't an end-to-end review, it's that idiots up top aren't making things easy for the sales people to do the selling?

    1. Allonymous Coward
      Flame

      Re: Get burned?

      It also doesn't help that their website's a pile of festering bovine excrement.

      We "have" to buy HPE kit because that's who our organisation's support contract is with. Recently I needed to spec a few servers. It was actually easier to go to the Dell site, build up the equivalent spec there, then send it to our procurement/account management folks for a quote - "Like this, but from HP".

      I'm not surprised HPE are floundering. What does surprise me is that they've lasted as long as they have.

  5. Erik4872

    Another transformation movement...

    Translation: We just sent 10 shipping containers full of $100 bills to McKinsey and the advice from their legions of 25-year-old recent MBA grads was to be agile like Amazon.

    I have no doubt that HP(E) has lots of dead wood left to prune, but I have been seeing this advice replicated over and over again at more traditional companies. Inevitably it boils down to offshoring everything that can be offshored, followed by cutting every single corner possible when it comes to the few people left onshore, then outsourcing everything that isn't a "core competency." I'm sure that even with all the mergers, demergers and splits that have occurred, there have been a lot of people let go and there are more to go. But cutting your way to growth, especially the usual way MBAs do it (starting at the top of the engineering pay spreadsheet) doesn't work long-term.

    People forget that HP and the like are hardware companies producing tangible products that customers physically take delivery of. Even if the guts devolve into software-defined whatever, a hardware company isn't going to move as fast as a software-only company. I work for a very traditional company in a traditional industry, and every "old school" company is scared to death of being left behind in the race to the top of the Second Dotcom Bubble. You can't turn a traditional manufacturer into a trendy SV startup run by 100 people crammed around cafeteria tables. But that isn't stopping them from trying. This year, the trend is to badly implement something the consultants sold the company as "DevOps" similar to the way "Agile" was badly implemented a couple years prior.

    1. Anonymous Coward
      Anonymous Coward

      Re: Another transformation movement...

      Probably some of that too... consultants with zero experience in these markets in charge of determining how HPE should operate in these markets.

    2. James Anderson Bronze badge

      Re: Another transformation movement...

      But the problem is does paying some far eastern company to put Intel chips in boxes and stick an HP label on the box really count as manufacturing?

      1. Voland's right hand Silver badge

        Re: Another transformation movement...

        But the problem is does paying some far eastern company to put Intel chips in boxes and stick an HP label on the box really count as manufacturing?

        Sorta - if:

        1. The company designed it

        2. Holds copyright on the designs

        3. The designs are innovative and not just rearranging the Intel reference design

        4. There are specific differentiators which are unique to company

        This is valid for any value of company. Contract manufacturing is as old as the industrial age if not older. There is NOTHING wrong with it.

        The WRONG becomes when you bring in a cretin with no understanding of engineering (and the differentiators provided by it) freshly from a business school which replaces 1, 2, 3 and 4 with branding sticker on a rebadged reference design and hands off the design to the same company which does contract manufacturing. While this gives you a short term margin and operating income boost it is the best way to "package the demise of your business" in the long term.

        HP has been in the WRONG since mid-2000 when it started handing off designing its servers to Asus and the like. There is no easy and short term fix for this and more importantly there is no fix which will please the shareholders as this requires to make the operating parameters significantly worse for anything up to 5 years ahead. The short-termist nature of the USA stock markets will simply not allow a company which has gone the "Branding as a replacement for Engineering" route once to recover back. They will have a set of disassemblers on the board in short order instead.

  6. Anonymous Coward
    Anonymous Coward

    Time to go Meg.

    You are clearly on a mission to destroy HP/HPE or rather what is left of it.

    A once proud company is systematically being destroyed by you and your cohorts. You will get a nice fat package when the job is done and HPE is no more so why worry eh?

    Lets face it, the company has been on a downward spiral since before you took over. The takeover of Compaq was IMHO the turning point. You seem to have done nothing to stop it but in fact speed it up.

    As an HP Pensioner I'm posting AC just in case.

    1. Anonymous Coward
      Anonymous Coward

      A pensions reminder - the hidden cost of pay cuts

      As an HP Pensioner I'm posting AC just in case.

      I'm just a few years off pension age and have been doing some pension calculations.

      That 10% pay cut HP forced on me more than a decade ago has had a knock-on effect on my pension fund. Fortunately only a year's worth of contributions involved in my case, but what should have been a temporary dip will potentially reduce my income for the rest of my life.

  7. ma1010 Silver badge
    Mushroom

    Work for HPE?

    Best get started on that job search.

    Icon because HPE looks to be at ground zero ===>

  8. Andromeda451

    Finance guy?

    So a finance guy will be calling the shots for HPE Next? That's great, the question becomes: Mr. Faust, what in your experience makes you believe you are competent to drive this effort?

    1. LDS Silver badge

      Re: Finance guy?

      "I know how to ink a deal with the devil.... (and I'll replace the CEO with Helen of Troy, of course)"

  9. a_yank_lurker Silver badge

    The Death Rattle Begins

    So Meg the Witch thinks boilerplate buzzword bingo will save HPE. The comments sound just like the prattle every other doomed company says before going permanently TITSUP.

    1. Anonymous Coward
      Anonymous Coward

      Re: The Death Rattle Begins

      The comments sound just like the prattle every other doomed company says before going permanently TITSUP

      I work for a customer company of what is now DXC, and we're doing exactly the same as Meg's idiotic plan. And, like HP/HPE et al, we've got previous, and it didn't work then, and it won't work now.

      And the reason is simple. Once you lose a good, product or service based commercial management culture, that's the end. No amount of "value engineering" by shitbag management consultants can save things. No "process reviews", "workforce actions", M&A, nothing is going to bring you back. When the dipshits take over your management cadre, there's no going back, you've crossed the Rubicon. Faust would approve of that.

  10. Inspector71

    Nothing Left...

    This is a company that is not fit to be even associated with the names Hewlett and Packard and that has been the case for years now. If anything of their HP still exists you would have to look towards Agilent Technologies and they are long gone from this travesty.

    It sounds like all that remains is an MBA echo chamber.

  11. circusmole

    When I worked for HP...

    ...we had an "HPE Next" every couple of years and it made fcuk all difference in the long run. I'm glad I'm out of that madhouse they now call HPE.

  12. Munchausen's proxy
    FAIL

    "“And finally, we’re going to right-size end-to-end cost structures of HPE to ensure we deliver on our financial architecture,” the CEO added."

    Good luck and safe landings to the competent people. It's time to hit the silk.

  13. Franklin

    "we will clean-sheet our operating model..."

    Yes, indeed you will. I think I've read that Dilbert strip.

    1. Anonymous Coward
      Anonymous Coward

      "we will clean-sheet our operating model..."

      Better than utilizing already-used toilet paper I guess...

  14. J. Cook Silver badge
    Flame

    I hit the trifecta on the Buzzword bingo from just El Reg's distillation of her speech alone.

  15. Anonymous Coward
    Anonymous Coward

    Every new corporate vision

    Now productivity comes to a complete halt as people stop doing things the wrong old way without having the slightest idea what the correct new way is. Ironically, productivity being at a complete halt is usually the old way too.

  16. Anonymous Coward
    Anonymous Coward

    In other words, they are going to cut a lot of costs.

    It is a change of strategy run by finance... do they think finance is going to invent a new product?

  17. Amos1

    "DNA" or "DOA"?

  18. FozzyBear Silver badge
    Mushroom

    Hmmm. Interesting.

    For a tech company, absolutely nothing about products or R&D in product development to ensure they have a competitive edge. Nope nothing of the sort.

    No a financial guy is going to chop apart a once great tech company. To do so he will hire battalions of beancounters. Who will, after an exhausting analysis, come to the conclusion that the engineers and technical support staff should be cut and outsourced. Whilst ignoring that beancounter central is probably the biggest sinkhole for money spent.

    Bloody moronic

  19. Barry Rueger Silver badge

    I am Defeated

    Dear God, I wanted badly to make a witty, snarky, yet insightful comment but after reading - hell, just SKIMMING - that page full of buzzword gobbledygook I can barely string together a sentence.

    Does no-one read this stuff before it goes out the door?

    1. Dan 55 Silver badge

      Re: I am Defeated

      Yes, they did. And they thought it was good. That's the problem.

  20. Anonymous Coward
    Anonymous Coward

    How many times must HP "Invent" itself?

    They reinvented themselves in 1994 when they sold off PA-WideWord to Intel.

    They reinvented themselves in 1999 when they spun off Agilent.

    They reinvented themselves in 1999 when they made Carly Fiorina their CEO.

    They reinvented themselves in 1999 when they tried to buy PWC.

    They reinvented themselves in 2001 when they bought Compaq.

    They reinvented themselves in 2008 when they made Mark Hurd their CEO.

    They reinvented themselves in 2008 when they bought EDS.

    They reinvented themselves in 2010 when they made Leo Apotheker their CEO.

    They reinvented themselves in 2008 when they bought Autonomy.

    They reinvented themselves in 2011 when they made Meg Whitman their CEO.

    They reinvented themselves in 2014 when they split into two companies.

    They reinvented themselves in 2016 when they sold Autonomy.

    1. whileI'mhere

      Re: How many times must HP "Invent" itself?

      They reinvented themselves agin in 2017 when they spun ES into CSC to create DXC. And now with ALL the baggage dumped, time to start chopping off the limbs

  21. Mikel

    Continuous reorg

    Sounds fun.

    1. Dan 55 Silver badge

      Re: Continuous reorg

      Hasta la victoria, siempre!

    2. Steve Davies 3 Silver badge
      FAIL

      Re: Continuous reorg

      Or Musical Chairs (apart from the 'C' level execs and their corner offices)

      We know that ends don't we?

      Better start preparing that Chapter 11 paperwork now and hope that you get a nice judge to oversee the case.

    3. sawatts

      Re: Continuous reorg

      A wizzen old man once said: Reorganisation is management's way of covering its tracks.

  22. TonyJ Silver badge

    And here we go...

    A once giant of engineering in the truest term - R&D being carried out by truly ingenious persons to bring genuinely innovative products to market being torn apart by an accountant who probably thinks that IT/Engineering just "get in the way of business".

    What is wrong with these companies? They hire people in at the top who clearly neither understand nor care about the businesses they are pulling down around them as long as they get it on their C.V.s and get their handsome bonuses and exit payouts.

  23. Anonymous Coward
    Anonymous Coward

    I sniff a merger with IBM

    1. Anonymous Coward
      Anonymous Coward

      I sniff a merger with IBM

      I was thinking the exact same thing. They are both experts in the employee-reduction industry, and both well versed in throwing out their seed-corn (not even eating it as the old cliche goes). Soon they could merge and *STILL* not have a product line between them.

  24. Anonymous Coward
    Anonymous Coward

    A bunch of Server Hardware Techs Escaped IBM to HPE's local storage unit. Wonder how long they will last with this "HPE Next"? The Business School model of fail, layoff staff, Merge company and get big payoff, seems en vogue, these days. Waiting to see when this happens to IBM. Like someone else said, perhaps HPE and IBM will merge? That would make things interesting for the Lot who left to go to HPE. Hey'll likely be among the sacked, after such a merger. >:-)

  25. Doctor Huh?

    Time to go completely fictional

    Well this clearly isn't working out for HPE. Perhaps they can take one more step.

    The "Silicon Valley" producers have put together apps, web sites, and other collateral for the show.

    Maybe it is time to have the writers take over a real company.

    Could the people who put words in the mouth of Gavin Nelson and Russ Hanneman really do worse than Meg, or Leo, or Carly???

    It wouldn't be Apple Maps bad, is all I'm saying...

  26. deconstructionist

    PJ Harvey said it best when talking about Carly's years during the HP + Compaq Squish .

    "I may forgive her, by my retirement fund wont"

  27. Roger Kynaston

    whenever I see HPE

    I imagine it being related to UHMPE - perhaps High Porosity Ethylyne. Being a bit of a yottie these things interest me. Well that and HP Laserjet 4s from my dim and not so distant desktop days.

  28. Anonymous Coward
    Anonymous Coward

    Befuddled Tech Professional

    At least had a vision... he wanted to focus on being a software company. I can't believe that Meg gets pass after pass. She has no plan and no clue... this I strategy? Cutting staff and putting handcuffs on people? When are we going to start seeing Meg catch well deserved flak? She's been horrendous.... that's as nice as I can be...

  29. Anonymous Coward
    Anonymous Coward

    Once you're lucky, twice you're good

    Whitman did indeed grow eBay from 30 employees to what it iwas when she left. That experience provided exactly zero relevant experience in turning around embattled HP. HPE is only 3 years old and already needing to "Clean sheet" the company? Who exactly was at the helm 3 years ago when HPE got it so wrong? This is obviously the classic deck chair shuffle to provide excuses for the few next earning calls, this time with the added bonus of the sacrificial lamb in the form of Faust when it all ends in tears.

    Besides eBay, what has Whitman done in her career that justifies her salary and stock options? The goal here is not to turn a company around, it is just to appease the shareholders and the board for a little longer so Meg can hold on...Blowing $150M to try to become governor must have left her pockets a bit light. But you can never, ever economize your way to prosperity.

    AC because I'm just another galley slave pulling the oar.

    1. Anonymous Coward
      Anonymous Coward

      Re: Once you're lucky, twice you're good

      It's worse than that - HPE is actually only about 20 months old (started 1st November 2015), and I wondered at the time she joined what exactly what her eBay experience brought to the party.

      Lest we forget, back in 2012 she promised to turn HP around (all of it) and have it growing by 2016. Meanwhile she continually banks on about "headwinds" on the earnings calls as excuses for falling revenue.

      Not sure it is about the money with Meg; as a billionaire any exit payment will be (relatively) insignificant; it is really about power and influence.

      Completely agree that companies cannot cut their way to prosperity.

    2. jelabarre59 Silver badge

      Re: Once you're lucky, twice you're good

      Whitman did indeed grow eBay from 30 employees to what it iwas when she left. That experience provided exactly zero relevant experience in turning around embattled HP.

      I wouldn't exactly call her experience at eBay laudable either. She took an adventurous startup and turned it into a universally-disliked company that routinely screws over customers/sellers/buyers as a regular course of business.

  30. Simon Ward

    Bingo!

    "We are taking a deep look at our end-to-end cost structure, business processes and organisational design. Building this ongoing process into our DNA will ensure that the smaller, nimbler go-forward company is set up to win in the markets where we compete."

    Seriously, what the everloving FUCK?!

  31. kmac499

    They should have maintained the original garage mentality, Skilled tinkerers working away to make well designed effective affordable products that might go global soon. IOT devices, 3D printers, etc.

  32. Frank N. Stein

    The end is near for HPE. Meg will perform "cost cutting" that include mass "Resource Actions", ala Ginny Rometti/IBM and Marissa Mayer, formerly of Yahoo. These Lasses get a pass, for some unknown reason, whereas blokes get sacked and paid off with Golden Parachutes.... Sad. Business School Mentality...

  33. Anonymous Coward
    Anonymous Coward

    Lots of AC's here.

    Time for the long kiss goodnight and shove HPE out of the door into the waiting arms of IBM...

    AC just because.

  34. Anonymous South African Coward Silver badge
    Terminator

    Hasta la vista, baby.

  35. Dwarf Silver badge

    Hewlett and Packard

    Built up by a couple of engineers who understood what they were doing.

    Now a new senior bean counter comes in and looks to reduce|optimise|other mgmt BS the costs (as that is all they ever do).

    I wonder where the words innovate and excel in engineering appears on the company strategy these days ?

    It takes a lot of skill to build up a company and a lot less to destroy one.

  36. Sir Loin Of Beef

    Putting a financial person in charge of the overhaul is sure to radically change things!

  37. Anonymous Coward
    Anonymous Coward

    Death Spiral

    Ever since HP axed their cutting edge research and development, they have had nothing new or better to differentiate them in the market, and so the race began to squeeze the bottom line for as long as possible until the well runs dry.

  38. Anonymous Coward
    Anonymous Coward

    Ruined companies

    All Meg and this bunch of idiots do is buy up decent companies, realise they don't know what to do with them and then sell them off again, and ruin thousands and thousands of lives in the process.

    Thing is they keep doing it and no one gives a flying fuck!

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