Parsing The Biggest Tech Break Up Of All Time With HP CEO Meg Whitman

August 31, 2015
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by Peter High, published on Forbes

8-31-15

Meg Whitman has led HP as CEO since September of 2011. In October of last year, she and her fellow board members announced their intent to split the PC and printers business from its enterprise products and services business. The former would be known as HP Inc., and the latter would be known as Hewlett Packard Enterprise. This would amount to the largest technology firm break-up of all time, creating two companies with revenues in excess of $55 billion.

The date of the split (November 1) is fast approaching, and I was curious about her thoughts about how things had progressed between the time of the announcement and now. Our interview was one of the first after the company’s most recent earnings release. Though she acknowledged that the news was mixed, she indicated that enormous progress has been made in breaking up the two companies, and that she is as confident as ever that the breakup is the right move.

We also spoke at length about her career path, her thoughts about increasing the number of women in executive positions at technology firms, what she learned from her time running for governor of California, and a variety of other topics.

(To listen to an unabridged audio version of this interview, please visit this link. This is the 14th interview in the IT Influencers series.  To read the prior 13 interviews with Sal Khan, former Mexican President Vicente Fox, Jim Goodnight, Sir James Dyson, and Walt Mossberg, among others, please visit this link. To read future articles in the series, please click the “Follow” link above and to the left.)

Peter High: Meg, you recently reported earnings to Wall Street.  I wonder, if you could reflect for a moment, were there aspects of what was reported that you feel validate the splitting of HP into Hewlett Packard Enterprise and HP Inc.?

Meg Whitman: I think what has been born out is that these are two very different businesses. The printing and PC business has quite a different customer set, different cost structure, and different industry dynamics than the Enterprise business which is more around how customers take their IT infrastructure to the next level, and how they secure their digital assets, and empower a data-driven enterprise. So they are very different businesses, and you can see that borne out in the results of the company this quarter. The  Enterprise side of the house did very well. EG [Enterprise Group] had probably the best quarter I have seen since  I have been here. Enterprise Services turned the corner, and the printing and PC market did well in a very tough market.  I think the focus and the capital structure that each company will have will just allow these two companies to be more nimble, more focused, defining the industry trends, and have better responsiveness and be better partners for our customers. I think it will be borne out that this was the right thing to do.

High: Can you provide a brief overview of the progress made in splitting up the companies? So how have things progressed, and what is left between now and that date?

Whitman: This has been an enormous undertaking as you can imagine, because this is not a typical carve-out of a small company being carved out of a big one. This is the creation of two new Global 50 companies. We announced the separation last October, and starting August 1st we’ve been operating as two separate companies – two IT systems, two separate supply chains, finance systems, sales operations. We are  invoicing, receiving payment, and have all the goods flowing through two separate supply chains. And this was a big undertaking. I have to say I am incredibly proud of the HP team because we have to work with more than 3,500 customers and partners to make sure that they were ready, in many countries around the world. I have to say it has gone almost flawlessly. I have not heard any issues at all from partners and customers that have not been resolved in a matter of minutes or hours. Our sales teams have a lot of confidence that this did not disrupt their partners or customers. So we are feeling really good about it.

To read the full article, please visit Forbes

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