HP customers seek stability with Whitman

In a roller-coaster year, HP customers seek product, management stability

Hewlett-Packard customers disconcerted by management shakeups and product strategy shifts are hoping for a stable future with Meg Whitman, who Thursday was appointed the company's new CEO.

Some customers who felt disrupted by recent changes at HP said they want Whitman to stabilize a chaotic situation by quickly and decisively communicating a product road map.

Whitman was appointed HP's CEO to replace Leo Apotheker, who was on the job for only about a year. During his reign, Apotheker set the stage for HP to move away from PCs to focus on the more profitable enterprise hardware, software and services. In August the company said it would acquire software maker Autonomy for US$10.2 billion, and also proposed selling or spinning off the Personal Systems Group (PSG), which deals in PCs and mobile devices. HP at the time said it would kill its line of WebOS smartphones and tablets, while retaining the software platform.

HP's board felt the need to bring in new leadership after spotting weaknesses in Apotheker's performance and operational execution, said Ray Lane, executive chairman at HP on a conference call to discuss Whitman's appointment. Board members were also "embarrassed" by the way Apotheker's team handled the August announcements.

The way HP communicated its plans to spin off or sell the PC business left many questions hanging, said Gerry McCartney, the CIO at Purdue University, which buys a range of HP products, including servers, desktops, laptops and office supplies. said. Purdue also has four of the Top 500 supercomputers in the world, two of which have been built by HP.

"I think the decision was poorly signaled. You could be watching the market and what's being said. We do that fairly well and we did not see this coming. When this was announced it was unsettling. You wonder 'what's coming next,'" McCartney said.

McCartney would ideally like the PC unit to remain a part of HP so every product comes from a single organization.

McCartney isn't rattled by the management shakeups, but leaders shape a company's direction, which helps shape product and purchase choices, McCartney said. He would like Whitman to bring stability and decisively communicate product plans for the next years so he can stabilize Purdue's internal IT road map.

"We buy the product set, we don't buy the CEO. To the extent HP is delivering services and products we are buying it's great. When they don't, that's not great," McCartney said.

Customers are still trying to digest the change in leadership, but hope for a stable product line, said Nina Buik, the chief marketing officer for Connect, an independent user community of HP's enterprise product customers. Connect has more than 50,000 members worldwide.

"I think people are looking at things that affect their business strategy. It's the product and product road map," Buik said. Some events over the last year, such as Oracle's decision to stop application development for Intel's Itanium chip architecture, have also made HP enterprise users fix internal road maps.

Buik has chatted with a few Connect members about the leadership change and found that most are "extremely optimistic" about Whitman, who is seen as a good communicator and who knows HP as a director on the board, Buik said.

"She has capital in Silicon Valley, which is important," Buik said.

There is a difference in running a smaller company like eBay, where Whitman was formerly CEO, and HP, Buik said. Whitman has the qualifications to run the company, but will also surround herself with capable people to execute business strategy, Buik said.

Some customers are not concerned about changes in HP as long as the company continues delivering products and services.

Alex de Joode, security officer at Leaseweb, one of Europe's largest Internet hosting providers, said the company was not worried about the turmoil at HP. The company uses thousands of ProLiant servers in its data centers, and in June added 5,700 more servers.

"We did not notice much about the internal struggles on an operational level." de Joode said, adding that Whitman can now focus on the strengths of HP's business, which includes introducing innovative products.

HP's board leadership seems vulnerable, but recent events could be the start of a new chapter, said Howard Owen, the owner of Stafford Printing, which uses HP printers for high volume digital and offset printing.

"They seem to have confidence in Meg Whitman," Owen said.

Owen deals directly with HP's small graphics arts division, which remains unaffected by the management change, Owen said. However, he was a little concerned when the company announced the potential sale or spinoff of the PC division.

"It made me wonder about the future, about the role of graphics services in the big picture for HP," Owen said.

Nevertheless, a new leader brings Owen a renewed hope in HP.

"I hope [Whitman] can get out and interact with the graphics services people," Stafford said. "It'd be great to see her."

(Loek Essers in Boston contributed to the story)

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Agam Shah

IDG News Service
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