HP is in the throes of another reorg, this one apparently aimed more at the administrative side than the functional side of the business. The big change, for example, was a replacement of the company’s chief admin officer and chief information officer. Neither of these positions are in a direct P&L role, obviously. One executive formerly heading up Enterprise Services is moving to the board, to be replaced by an outsider according to speculation.
You have to wonder whether this is another of those “we’re really great but somehow we’re executing badly” stories that’s reminiscent of Cisco’s tale after its blown quarter. In this case I wonder too, because HP had experienced very good gains in strategic influence in our spring survey of enterprises. CEO Apotheker may be purging some of Hurd’s old hires, but he may also be working to realign the company to execute better in general and eventually to support cloud services more directly, something that would explain the new Enterprise Services exec.
Given that strategic influence is a leading indicator, HP may have some time to do the realignment before deals in the planning phase today actually get to execution. We noted in the survey that enterprises were rethinking some of their trusted paradigms for data center modernization under the pressure of new insights into the cloud and even virtualization. That the enterprises expect HP to solve these problems, and even believe they CAN solve them, is consistent with HP’s role as a kingpin IT player. Since HP is also an increasingly credible provider of enterprise networking gear, it’s also logical to believe that they would be a strong candidate for building a cloud from its constituent parts—a data center and a network. Lack of actual execution might then be an issue for the future, when enterprises have had a chance to rethink their plans based on their new insights.
That Cisco lost so much ground (to HP and to the field, in effect) in the same survey suggests that its foray into the server space was an initial cause for hope but that the company then failed to deliver what was expected. Some of the survey comments fit that view; buyers said that Cisco had not offered any compelling strategic vision for the cloud. Given that HP’s failure in the cloud was a cited source of its current problems, it’s ironic that they had a better cloud credibility rating than Cisco did.
