Meg Whitman tells IT leaders everything they need to know about HP Enterprise

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You mentioned earlier the differences between employees of certain ages, but HP Enterprise, Dell/EMC, Cisco, don't you all have a millennial issue as well? Any emerging company or younger company, the model is going to be almost completely cloud and increasingly so over time.

Yes. So if you think about new companies that are starting, they're running their IT infrastructure completely differently, and so we have to figure out how we can remain relevant to these young companies. And I'll give you a couple of good examples there in a minute. But the vast majority of the total available market is in legacy infrastructure. I mean by definition, if you've been around more than five years, you have a legacy infrastructure. I think there is a tremendous opportunity for us to help companies with legacy infrastructures migrate to a better place for them, to be able to compete with these new younger companies that maybe have an entirely different infrastructure.

But it's interesting, we're now watching some of these young companies that started out completely in the cloud, and now you see the cost escalating dramatically. For example, Dropbox, you probably know, built their infrastructure on AWS, and now have moved to a more traditional environment. Not a traditional environment, but they moved to a private cloud, because the cost was high. I think there's going to be an interception here as some of these new companies get to be big companies, global companies, with all the data privacy issues and data storage issues in Europe.

I think you're going to see cloud adoption in Europe, public cloud adoption in Europe, be slower because of data privacy regulations around keeping the data in country. And by the way, we now have to certify that that data is in country.

The ability for an HP-scale company is I think still super-important here. But you raised a good point. The world is changing fast and we've got to make sure that we can help our customers change to the IT infrastructure that's going to be best for them.

HP Enterprise CEO Meg Whitman HP

HP Enterprise CEO Meg Whitman

And I'll tell you a little story, which I think you probably know. About two years ago we started a program called Pathfinder, where we are taking advantage of our position in the middle of the greatest renaissance in B2B infrastructure and security and big data that's happening anywhere in the world. It's right here in Silicon Valley. We basically said, "For those four transformation areas, we've got to partner with some of these young companies and integrate them into our solution so we can offer the newest technology best-of-breed." We just led the financing round for Mesosphere, and so our job now is to help companies understand what DCOS {Mesosphere's Datacenter Operating System} represents and then integrate it into their environment as they transition to a hybrid world.

We are increasingly forming partnerships and making investments in these small companies that we then curate for enterprise scale. A lot of CIOs tell me, "This is all great. There's a new security company being born in Silicon Valley once a week. What am I supposed to do with all these companies? Am I supposed to integrate them all into my environment? How do I know they scale? How do I know if someone will be able to service them?"

So we're going to try to be a curator, if you will, because if we integrate a young company into our solutions, we have to be able to support them globally. We have to be able to break/fix globally. By the way, I think that will make us very relevant to customers. Someone asked me the other day, "But Meg, when you integrate these young companies into the go-to-market powerhouse that is Hewlett-Packard Enterprise, these companies could go from $4 million to $40 million to $150 million to a billion dollars relatively fast and you will only own a small percentage of the company." That is correct. And, by the way, if that's true, we will have increased our relevancy to the CIO and I'm sure they will buy a lot more of the more traditional Hewlett-Packard Enterprise offerings.

But we can't buy all these companies. First of all, there's too many of them. And in security, by adopting companies to integrate into our solution, if another one comes along that is better for our customers, we move to that one and we're not stuck having paid $200 or $300 million for a company. It's a different operating model for Hewlett-Packard Enterprise, it's a big cultural change for the company, because we are used to selling only what we own, for the most part.

In the past in talking to HP executives like Mark Hurd or Leo Apotheker, we often heard that HP needed to become more of a software company. What is the software strategy today? Help customers understand how that strategy has evolved and what you're going to focus on.

I would make a differentiation between what I would call application software and system software. As you well know, we have always been a huge player in system software because our infrastructure does not run without that software. We will continue to lead in the system software area. And then, my predecessors actually made a number of bets in big data, with products like Vertica, in orchestration and automation software like ITOM and ADM, which is actually quite close to our hardware offerings, as well as our employee productivity software and things like that.

So we like the application software business. We're going to continue to invest in that business. But when people say we're not a software company... Actually, we are. I think we have about $3.8 billion worth of software products, which would make us the fourth or fifth largest software company in the world. And then when you think about Aruba, Aruba is actually a software company as well. What runs these Aruba beacons is software. But I would say it's a bit more like system software per se than application software.

Another way to look at this is, I guess, is what won't you do in software?

So we won't do ERP. We're not going to go buy Salesforce or Workday or any of those kinds of things. I think we will stick to our orchestration, automation, application lifecycle business, our security business and our big data business, but we will not be in the ERP business per se.

I also wanted to ask you about an area that's really building up steam: Cognitive computing. IBM is certainly staking a strong claim to leadership there around Watson. What is HP's strategy when it comes to cognitive computing?

Cognitive computing for now lives in a couple of different areas. First is, you can think of IDOL and Vertica as cognitive computing. Vertica has in its customer list some of the most forward-looking companies. Facebook, Uber, Airbnb are all Vertica users and basically what they are doing is cognitive computing. They're ingesting machine data, they're ingesting user data to basically gain insight around what's happening to their market and what their customers are doing.

Then we have some more upstream research in cognitive computing that lives in Hewlett-Packard Labs. Cognitive computing is basically ingesting all kinds of different data and making sense out of it. We do a lot of that. Listen, they're {IBM} doing some very interesting things. They're buying healthcare companies and stuff, but listen, our Vertica platform is remarkable as is our Haven OnDemand platform. I put us up against Watson every day of the week here. We're in a lot of customers where actually from a Watson perspective it's not as far along in terms of real-world applications as you might imagine from the advertising.

I'm looking for the brief explanation of how you want people to think of HP Enterprise. eBay was the online auction company, no question about the mission, the role. If you were to put it in a couple words, HP is the what company?

It's the company you can count on to transition your IT environment to the new style of IT.

From an employee perspective, in terms of reengaging the employees at HP Enterprise, what have you done to get them to own innovation again or to spur morale?

First is very clear communication about what we're up to and who we're focused on. Remember our consumer business went with HP, Inc., so we are entirely an enterprise company. Second is sense of urgency. The market is very competitive and we cannot have people working at HP who are not on it, running to the fire and moving fast. I say to our organization every single day: The future belongs to the fast. If we are not fast and thorough and the reliable technology partner, we will not win. But if we are, we have a very good shot at winning here. So I think it's about speed and it's about winning.

This story, "Meg Whitman tells IT leaders everything they need to know about HP Enterprise" was originally published by Computerworld.

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