Wednesday, April 2, 2014

HP talks to the Analysts

By Rich Ptak

HP held its annual analyst event, following earlier similarly-focused events by IBM at PULSE 2014 and CA Technologies in NYC (blogs available about IBM[1] and CA Technologies[2]). HP event details were under non-disclosure, so we’ll focus on broad outlines and our impressions.

All three vendors see Cloud, Big Data/Analytics, Mobility and Security technologies as key influences impacting IT and business operations. Each has a slightly different view of how the effect is made manifest. Identifying them as enablers (CA), drivers (HP) and a combination of both (IBM) to cause a fundamental transformation in the way things get done.

HP CEO, Meg Whitman gave a keynote speech documenting HP’s progress, discussing strategy and plans going forward. HP executives then gave an overview of their activities and plans for the coming year. During breakout sessions, each business group provided details on products and strategies. Meg and her team accomplished a lot to get HP back on track. They have restored confidence, coherence, focus and enthusiasm at HP.

Meg quoted key success measurements, including net debt reduction to $0 and free cash flow of $1.7B as of the last fiscal quarter. HP stock trades at around $32/share (3/24/16) up from just over $10/share when Meg joined. Meg visited customers, finding them "incredibly loyal" and supportive of HP “winning in the market”.  No surprise, but it is reassuring that at eighteen months into Meg’s 5-year plan, things appear to be working.

Every serious IT solution provider recognizes that disruptive transformation is taking place. Waves of change from Cloud, Mobility, Big Data (and Analytics) and Security underlies the upheaval in IT and business operational models akin to what occurred during the moves from mainframe to distributed servers/PCs to internet apps and web-based services. It is an inflection point impacting business and IT and fundamentally transforming everything from business models to operational strategies. IT vendors must help customers deal with that transformation.

HP has identified a New Style of business powering a: “New Style of IT (that) promises simplicity, greater agility, speed and lower costs…customers are looking for help from trusted advisors to understand how they navigate this brave new world…they need comprehensive solutions that solve their toughest business problems, not just a set of disparate IT assets.” 

In describing how to do this, HP focused on the details and prowess of their portfolio. They provided an abundance of technical specifications about a very nice collection of well thought-out tools. They did have some customers briefly describe their success with HP products. While interesting and important, most customers are more interested in the specifics of ‘navigation’, not ‘speeds ‘n feeds’. HP failed to discuss how they help customers prioritize, plan for, acquire, implement and use New IT. 

HP clearly understands significant changes are occurring in decision making. They gave a good description of the new “Millennial” consumer/decision-maker. However, they gave no indication of how they will attract them. Customers are left to figure out for themselves what to do with HP’s tools. Without programs to attract those millennials, HP suffers in comparison to its competition.

For example, for one vendor, Next Generation IT means extending IT’s impact into every business function. Each product release has innovation to achieve that. Another vendor recognized customers got more benefit quicker as product familiarity increased. They focus on providing easier, broader access to solution suites, including free on-line trials, ‘try and buy’, increased customer collaboration in design and development[3], etc.
We did enjoy the demo area, Project Moonshot is HP’s high-density, high efficiency, and low footprint rack-sized appliance to manage and deliver multitudes of software-defined servers. Our interest was piqued by HP HAVEn, a Big Data management and analysis platform that leverages other products (Vertica, Autonomy) to collect, index and query data in multiple forms and formats.

This is clearly a new HP, however….

HP is clearly improving. Their products are technologically sound, some industry leading. The product details and long-range R&D efforts were interesting. If we weren’t in the midst of an ‘inflexion point’ with an uncertain economy, this approach may have been adequate. Unfortunately, as things stand today, HP’s presentations fell short of what is needed. Customers need guidance and structure on how to maximize their return from technology. HP revealed no plans to do that.

HP sees itself, but did not present itself as an integrated company. Products were covered in isolated silos. Neither business nor IT operates that way today. HP’s differentiation from competitors was never made clear. They failed to say how they are uniquely able to help customers be more effective at using HP solutions to solve their problems.

IT vendors are notoriously inept at marketing. The consumerization of IT was supposed to change that. Demonstrating how a vendor is making it easier for customers to continually get more value from IT is more persuasive than chest-beating. HP has a story for solution-focused customers interested in immediate benefit; they just need to tell it. Until then, they will get less attention than they deserve.

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