HP split is good news for channel, claims Whitman

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HP split is good news for channel, claims Whitman

Hewlett-Packard CEO Meg Whitman Wednesday told several hundred of the industry's elite solution providers that they will be able to make more money with HP as a result of the split of the company into two separate publicly traded Fortune 50 companies.

"I think we are just going to get better and stronger and more important in terms of you growing your business and making money," said Whitman in a wide-ranging 50-minute interview with The Channel Company CEO Robert Faletra at the BoB Conference in Florida.

Whitman pledged that HP's channel commitment will remain steadfast as it moves to break up the company and even after the split, which is expected to be completed by the end of HP's fiscal year 2015 ending Oct. 31, 2015.

The question-and-answer session marked Whitman's first appearance before a group of solution providers in the wake of the news about the split. HP said 6 October that it will be splitting up into a US$57 billion Hewlett-Packard Enterprise business, which will include enterprise systems, software and services, and a US$57 billion HP Inc. business, which will include the PC and printing business.

"We will continue all the progress we have made in the last three years," said Whitman, referring to the major increase in channel investments that she initiated when she took the helm of the company in September 2011. "That will continue. There is no question about it."

Whitman, who will play a role in both new companies, said partners can expect continued channel investments such as HP's US$100 million bet on the Unison Salesforce.com portal, which is winning raves from partners, along with continued improvements in areas such as deal registration and market development funds.

Whitman's appearance at the BoB conference came on the same day that HP said it was continuing a share repurchase program, a move that was widely seen as a confirmation that HP-EMC merger talks were off the table. When asked if she could comment on reports that HP's talks with EMC had come to a halt, Whitman answered, "No."

In an interview with CRN US, however, Whitman said Hewlett-Packard Enterprise will have more than US$7 billion in cash to make acquisitions. "We will be in a financial position to do M&A, to make more investments in R&D as we streamline our costs even further in ways that will help the company," she said.

"I am really excited about the separation," she said. "This is the right thing for our partners. It is the right thing for our employees. It is the right thing for our investors. I think we are going to be in a really good position, a stronger position than we are today."

Whitman told CRN US she expects the split to produce two faster, more agile and more innovative companies in their respective markets. In fact, she said the split will drive deeper channel investments and higher R&D investments. "We ought to be able to free up more money for R&D, more money for go-to-market to help partners sell solutions," she said.

Ultimately, partners will see more innovative products from both companies as a result of the split, said Whitman. "In the beginning, the middle and the end, this comes back to product," she said. "What is the product, what is the solution that you can offer to your customers."

Referring to HP's founding in a rented garage in Palo Alto, California, 75 years ago by Bill Hewlett and Dave Packard, Whitman said: "HP was born in a one-car garage. I think we just moved to a two-car garage. Same garage, but a bit more focused and [with more] speed."

UCLA Professor of Economics Lee Ohanian, who gave a keynote address on future economic growth and innovation at the BoB Conference, praised Whitman's decision to split up the company. "When you see companies fail, often it is because they don't split things up," said Ohanian. "The big ocean liners are hard to turn. Smaller ships are more nimble."

Ohanian said Whitman deserves credit for taking over an organisation that was in duress and making progress in a turnaround. "She took over an organisation under distress," he said. "There was a record of some bad decisions," he said. "I think she is doing a great job."

This article originally appeared at crn.com

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