Hewlett-Packard (NYSE:HPQ) is set to announce Q2 2013 results on Wednesday, May 22. For HP CEO Meg Whitman, this is a prime opportunity to show progress with HP Autonomy, cloud, security and big data -- while also stabilizing the PC business. Can Whitman deliver the goods?
Whitman has impressed The VAR Guy in recent months. During HP Global Partner Conference in February 2013, Whitman assured The VAR Guy that she was committed to running the company for the long haul. She also vowed to make sure HP's next CEO involved an internal promotion rather than an external hire.
Goodbye, Ray Lane
Since that time, former HP Chairman Ray Lane has exited the company. That was welcome news. Many critics blamed Lane for the botched Autonomy buyout. Others blamed him for supporting former HP CEO Leo Apotheker before ousting him in 2011.
But The VAR Guy had bigger concerns about Lane. For starters, Lane was obsessed with beating his former employer -- Oracle and CEO Larry Ellison -- in the market. That obsession may have triggered HP's stumbles with Autonomy and Apotheker. During Lane's time as HP chairman, the company also suffered from numerous information leaks that spilled into The Wall Street Journal. Amid the recent boardroom changes, The VAR Guy hopes, HP will spend less time leaking information and more time executing on its business strategy.
Anticipated Earnings Call Themes
And what is that business strategy? Whitman, at every chance, reminds partners, customers and investors that HP is on a multi-year journey to turn around the company. That journey, which she'll certainly update during HP's May 22 earnings call, includes:
1. HP Autonomy: Hewlett-Packard must make the best of the Autonomy buyout, even as HP continues to allege financial wrongdoing by Autonomy's former leaders. Some shareholders are still irate. That said, HP must talk far more often about Autonomy business milestones -- especially when it comes to customer and partner wins involving eDiscovery, business continuity and cloud-based services.
2. HP Big Data: Here, partners should keep an eye on HP Vertica. A user conference is set for Aug. 5-7 in Boston. The person to watch is HP Vertica VP and GM Colin Mahony. In the meantime, The VAR Guy is betting Whitman will mention Vertica Big Data momentum during the May 22 earnings call.
3. HP Converged Infrastructure: Sure, servers, storage and networking are converging in the data center. But just about every major hardware and software company -- Cisco Systems, Dell, IBM, VMware, etc. -- is focused on that convergence. Cisco Systems recently announced relatively strong earnings based on its convergence momentum. Now, HP must communicate similar momentum.
4. HP Cloud: Yes, HP has public and private cloud solutions. HP Public Cloud is built on OpenStack and seems to be off to a promising start. But here again, a long list of data center providers -- IBM, Rackspace, etc. -- leverages OpenStack.
Plus, rivals are starting to get specific about their recurring cloud revenues. Oracle President Mark Hurd says Oracle SaaS now generates more than $1 billion annually. Microsoft says Windows Azure also has topped $1 billion in annual revenue. And Office 365's annualized revenue (current quarter times 4) is above $1 billion.
It's time for Whitman to start getting specific about HP's cloud revenues. If she doesn't, it's a tip-off that HP is late to this game.
5. HP PCs, notebooks and Tablets: OK, so Microsoft is preparing a Windows 8 reboot -- called Windows 8.1. Meanwhile, Q1 2013 PC industry sales tanked. HP hasn't been sitting around waiting for Microsoft to fine-tune Windows 8. Instead, HP has launched a Chromebook running Google Chrome OS and the company also is promoting Google Android tablets.
For Whitman, it's important to show that HP's PC business (including x86 servers) is outperforming the overall market -- even if that means sales are soft but stable.
If HP can't show progress on the PC front, some critics may start to wonder if HP should re-investigate spinning off its PC business. That spin-off plan was scrapped when HP dumped former CEO Leo Apotheker in 2011.
6. Bonus - HP Moonshot Servers: The company claims HP Moonshot servers are a huge opportunity for customers. It's likely too early for Whitman to discuss anticipated Moonshot revenues, but she can at least drop some clues about early customer and partner demand.
Pundits like ZDnet's Larry Dignan expect HP's Q2 revenues to be weak but restructuring moves should help HP's bottom-line profits.
HP partners, meanwhile, want only one thing from Whitman: Consistent loyalty to the channel. Avoiding ugly surprises -- like more controversy around Autonomy or the PC business -- would be a big bonus.
The VAR Guy will be back with earnings analysis once HP discloses official Q2 2013 results on May 22.