Last week was HP Discover and the VCE Analyst conference and given both were going on at the same time it was pretty hard to avoid the stark differences. Since Meg Whitman took over HP has fragmented badly and while they can still talk about converged solutions it’s pretty clear they are no longer structured to deliver them. Whitman has kind of become the Sarah Palin of CEOs, without the personality, in that she seems to increasingly have a habit of <href=”#slide3″>saying things that have folks scratching their heads wondering if the elevator goes to the top floor. VCE on the other hand is known for just getting the job done, in a world of companies who provide parts and limited instructions VCE is really the only firm that delivers turnkey solutions. The irony is that HP is closer to the norm, though on the far side of it, than VCE is.
Let’s talk about that this week.
Given there were two competing events this week it is hard not to start off with the quality of the events. At HP Discover they had re-launched their on again off again analyst component. But after inviting and accepting a number of analysts they then told them that travel expenses would not be reimbursed. For both the independent analysts and large firms this meant an unplanned expense that flowed to their bottom line causing them either personal or corporate pain. Given this was a large customer event this created the likelihood that some, if not all, of these analysts would now bad mouth HP in front of these customers. If there was a picture tied to the saying “penny wise and pound foolish” Meg Whitman should now be this picture because stories from inside HP tell of draconian expense containment methods that are driving employees and customers away from the firm.
VCE, in contrast, took a closely targeted group of analysts, treated them well, and then assured that the stories they heard from executives and customers were candid and in support of VCE’s image. They also mined the brains of the analysts so they got more than their money’s worth. They undoubtedly paid more but the end result was analysts that generally praised the company publically and in private and were in support of the firm’s initiatives and direction. This is the difference between doing something to do it, and doing something right. In HP’s case they felt they needed an analyst event but clearly had no clue how to properly do one and likely lost a significant amount of revenue saving a little amount of cost. VCE’s far more experienced AR team had a far sharper focus on results and thus better achieved those results. VCE built advocates HP created critics.
Praveen Akkiraju vs. Meg Whitman
This is kind of like comparing Bill Clinton to Sarah Palin in that Praveen is a subject matter expert and can talk in depth not only at a high strategic level but about the technology and have an informed discussion on customer needs. Whitman thinks she is qualified to run HP because she ran eBay, it doesn’t appear that she can even spell strategy. I had a nice chat with him on what makes VCE special and we discussed both the current and future exposures the firm would likely face. A while back I had a meeting with Meg Whitman and we discussed why her keynote lacked content and made her look vapid, she argued it was by intent reminding me of the Sarah Palin interview on the magazines she didn’t read. It also reminded me of the first keynote Whitman did where the <href=”#.VXCq9GZFD5o”>CEO of DreamWorks had to step in and finish it. Meg simply didn’t have enough substance to finish the talk. Or more accurately she was all show, no go similar to Palin who is now last year’s news.
My view is that a technology company has to be led by someone that understands the related technology intimately. Even as hated as Mark Hurd was at HP, he is clearly doing better at Oracle than Whitman is doing at HP. I keep wondering if HP’s board has missed a meeting, then I realize that this has been an ongoing problem for some time there.
So part of this is that Praveen reports up through technical oversight at EMC all of which are subject matter experts while Meg reports up through a board were only one member has any experience with HP and even she is pretty far from HP’s hardware core.
Solutions vs. Parts
Over the last two years I’ve been comparing what customers say about each of the major vendors and the difference between HP and VCE is the starkest. For VCE they are shocked that the firm tends to outperform nearly unbelievably expectations because constructing a complete IT solution in a factory is so unusual. The HP customers are shocked as well but largely because they believed they were buying a solution but instead got a build it yourself kit and the hope that they can eventually assemble it. Now this wasn’t always the case but apparently Meg has dismantled any central coordination around complex solutions and the end result is you basically buy a kit when you think you are buying a complete offering. The number of customers who have actually never gotten the solution to work still astounds me making me wonder if they are so embarrassed that no one shares the mistake which is why HP still gets revenue and it is still being made.
VCE has the opposite problem in that folks still don’t get the advantage of a packaged solution and don’t believe it will work because no one else does it the way VCE does. It reminds me a lot of the early PC years when reviewers argued that you needed all kinds of options and upgrade slots which made the result far less reliable when users wanted something that worked like a TV. VCE delivers a product that works before you get it, kind of like a TV, while HP delivers a group of parts and hopes you can get it to work.
Wrapping Up: Form vs. Substance
I was sent an early transcript from an interview that aired on Bloomberg Live. In it Whitman talks about why she is an expert on turnarounds because she had done many of them and read a book on it. (When she took the job she didn’t mention turn around experience and instead pointed to eBay as her source for experience. So mythical turn around experience and a book on Starbuck turnaround and she’s an expert.) You’d think she’d read “Who Says Elephants Can’t Dance” the story of the IBM turn around instead or maybe talk to Louis Gerstner).
I particularly liked the Starbucks reference because retail coffee and high technology companies appear to be synonymous in Whitman’s head. Praveen, on the other hand, doesn’t have to make up stories about his experience or reference books that don’t apply to the job. It is clear he knows what to do and VCE doesn’t need to be turned around, it is growing at a double digit rate while HP is after years of Whitman looking forward to a turnaround which may never come. In the end Whitman is about playing a CEO, Praveen is about being one and the contrast is striking.
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