Friday, November 18, 2011

Inevitable transitions – will we see changes?

HP’s new CEO Meg Whitman has hit the deck running and it’s clear to see HP is in transition – yes, today, they welcomed a new director to the board – one who could agitate for even more change. But will this generate good news for the NonStop community?

In the weeks before I left Boulder, Colorado, winter had sank its teeth deep into the land. After three sizable storms that saw the temperatures drop rapidly from the 80s to the 30s and worse, the citizens were finally adjusting to the transition, although winter came this year much sooner than they had expected. Shedding shorts and Tee’s for layers of warm clothing brings with it realization that the transition has only begun, and that by the end of the year we will have seen much worse weather descending on us all. The picture to the left was taken at first light, as we headed to our local Starbucks!

However, this past weekend has seen me conduct business in Venice and board a small vessel for a run down the Adriatic Sea, stopping in ports alongside the cities dotting the Dalmatian coast, including those belonging to Croatia, Montenegro and Greece. The distances aren’t vast and in a few short days I will be back in Italy once again where I hope to conclude the business aspects of my trip with a short stay in Rome. While the scenery has been terrific and the weather proving helpful the headlines of the newsletters pushed under the cabin’s door each morning have been hard to miss.

It is apparent that we are right in the middles of transitions of a completely different kind. Greece! Italy! Both countries having witnessed the arrival of new governments and the region is alive with discussions over the transition of power and what the likely outcomes will be. Perhaps, as far as this trip goes, nothing more clearly demonstrates transition than the old town of Dubrovnik that I visited only a matter of hours ago. Once heavily shelled in the wars that raged throughout the Balkans in the early 1990s, some twenty years later the city has recovered and the once magnificent fortress-city is as sparkling as it ever has been. A quick walk down its main thoroughfare brought with it little evidence of any of the tragedies that had befallen the city barely two decades earlier. The repairs undertaken had made any changes to the city difficult to find – it all looked just as it had always looked in photos I had seen decades earlier.
The picture above captures the transition from the winter in the Rockies to the more blissful early fall of the Mediterranean, with the walls of old town Dubrovnik providing protection to the small fleet of fishing boats that ply the calm waters just outside the city. The picture to the right, taken only a day or so ago,  captures the scene better than words can describe.

I am often drawn into conversations about where I would like to spend my time, and if I had any opportunity to take up residence outside of my home town of Boulder, the coastal areas of Croatia would certainly place very highly among the regions I would consider. And this would include areas to the south, as well as the fjord leading to the city of Kotor, Montenegro – all among the best landscapes I have ever witnessed in all my time sailing the Mediterranean.

However, the papers being pushed under my cabin’s door also included snippets of business news and in the library there were older copies of business magazines and newspapers. Among them was a feature by Reuters published in the November 9th, 2011, issue of The International Herald Tribune – a paper I thoroughly read every time I visit Europe. The article featured the headline “For HP, deal advice proves costly” and it wasn’t so much what was featured in the story as it was a reminder of the transition HP is going through today.

There has been much published of late about the arrival of Meg Whitman to lead HP and of the expectations that, at best, she will simply be leading a transition team and that she is simply holding down the fort as the next leader of HP is unearthed. I have been among the many commentators who have viewed her presence more or less as a place-holder   following the exit of Leo Apotheker, who himself hadn’t quite completed a year at the helm of HP following the exit of more operationally oriented Mark Hurd. But in hindsight, I may have been a little too quick on reaching this conclusion, and perhaps I should have been a little more prudent and let the events unfurl for themselves. After all, even though she had lost her bid to become California’s governor in the last state elections, much of how she campaigned had impressed me. I have observed it rather closely, living at the time in Southern California. She was open and straightforward, and told California exactly what she would do should she be elected.

One of the aspects of the Reuters story was how they catalogued the series of acquisitions HP has made in only the past few years. The list is quite lengthy, and the first that comes to mind is the highly successful bidding war it waged against Dell to secure 3Par (for some $2.35 billion), and with it the company’s intellectual property (IP) involving online storage systems. Then there was the $1.4 billion purchase of ArcSight that brought to the table IP associated with cyber security. Last year, HP paid out a further $1.2 billion for Palm and with it, not just the IP behind former market-leading mobile devices, but a new operating system, WebOS.

However, deals of this magnitude where the money involved was in the one to two billion dollar range palled when we all read of HP’s intent to purchase Autonomy for $11.7 billion. A British software vendor that very few within the industry knew all that much about and where early responses were generally along the lines of “you have to be kidding!” Yes, HP relied upon prominent internal leaders to help, but they also relied heavily on “an army of bankers to help (HP) decide whether to pursue Autonomy,” as Reuters was to report. Now, there’s still value that may emerge from all of these deals and yet, the sheer brashness of them surprises many within the executive ranks.

As she hasn’t been able to reverse any of these decisions as she pushed ahead in her transitional role, Whitman has been forced to face the irreversibility of much of this. And she has had to put as best a face to it in public as she could. However, the fate of some of those who were a party to the acquisitions haven’t fared as well. A number of the decisions made in the final hours under Apotheker’s leadership have been retained whereas others have been overturned and I fully expect there will be more that changes with the transition.

The decision to drop WebOS and to abandon the tablet and mobile device business was one that stayed but to add salt to the wound, there were no attempts made to retain WebOS’s most experienced advocate, Richard Kerris, when he elected to leave the company. From all I can gauge, this pretty much ends any possibility of HP resurrecting this aspect of Apotheker’s ruling. And while the news of their departure raised an eyebrow or two, it was nothing when compared to the earlier news that Shane Robison would be leaving, and with him the role of HP’s highest-placed CTO would vanish. The technology giant would now have no central CTO but rather would shift to a model where the key groups, including Enterprise Servers Storage and Networking (ESSN), would have their own CTOs. Robison clearly wore the fall-out from his passionate support of the acquisition of Autonomy.

What does this mean for the NonStop community? Will the decisions being made at the highest level prove beneficial to NonStop, or will the fate of NonStop suffer even more ignominy? This time, I am not as prepared to pass judgment as I had been earlier when I first heard the news of Whitman ascending to the role of leadership. I now view her not so much leading a transition team, rather she seems to be leading a transition of HP itself. There’s no question whatsoever that the most recent attacks by Oracle have hurt selected server models and that HP hasn’t done enough to defend itself – there’s not an airport I visit these days where there aren’t huge banners proclaiming just how much faster Oracle’s hardware and software offerings are when compared to models on offer from HP.

Yes, HP is hurting at the top end. But the decision by Whitman not to get out of the PC business and to put an end to any further divestiture of products is certainly telling us all that she definitely wants to fight on – I suspect there will be no actions taken lightly now under Whitman. And this could prove decisive for NonStop and for the integrated hardware and software that today is part of the very modern NonStop Server platform. An earlier opinion paper I wrote on NS SQL/MX where I talked to users of Oracle’s database has left me in no doubt that in select markets HP has in the NonStop platform a highly competitive offering. But will that be enough?

HP could do well to lift its investment in NonStop and in its promotion across its vast array of solutions vendors. There’s not a single commentary of late in the more popular blogs and group discussions that doesn’t raise this item at least once – and it could be simply executed with few repercussions on other well established groups within HP. The game has changed. HP is under pressure. And HP needs to respond, and in this context, I don’t see it being too difficult to anticipate somewhere along the way NonStop enters the conversation.

Should HP’s services group set up service bureau style operations featuring NonStop? They certainly have the resources and skills to do this. Should HP’s software group invest in a couple of solutions vendors to bring additional products for NonStop to market? They certainly wouldn’t go backwards with such decisions. There would be nothing better for the NonStop community to witness than HP “eating its own dogfood”! None of this would be simple to do and none of this is without its own set of problems, but I suspect that there will be changes nonetheless. But as the NonStop community continues to migrate to Blades then as that program wraps up, where will new NonStop sales come from? Yes, according to the roadmaps, there will be more improvements to come as HP rides the Intel roadmap but I have to believe as the costs continue to drop – even in critical emerging markets – pressure will again be on marketing to pull together plans for additional verticals. Yes – there could be good news for the NonStop community as Whitman continues with the transition she has already initiated.

In any transition there’s usually not an automatic expectation of change for the better. Transitions of themselves often don’t lead to change at all, but rather focus on a smooth crossover to something completely new. However, with what I have been seeing coming from the new leader, not only do I not see this as being the moves of someone who is not in transition themselves but rather by someone more focused on transitioning the company, and along with the transition, changing it. I am waiting for Meg to stand up and tell us what her plans are for HP - and I expect her to tell it as it is. And on this basis alone, I think that there is every chance of better things to come for NonStop!  

1 comment:

Justin said...

Richard, I believe your comments regarding Meg are accurate. I was guardedly optimistic when she was announced as the new CEO. Recently she spoke at the Sales Kick-Off and I have to say she was confident, direct, honest and optimistic. I can now say I am fully optimistic.