Memo to HP CEO Meg Whitman: Have We Hit Rock Bottom?
Dear Meg Whitman: Hewlett-Packard (NYSE: HPQ) delivered more stunningly bad news today, alleging Autonomy misled HP before the big 2011 buyout. The news triggered an $8.8 billion charge and raised more questions about HP’s long-term outlook. Let’s face it, Meg: A lot of HP’s problems started long before you arrived. But let’s agree on the following request for HP’s fiscal 2013: No more ugly surprises blaming former HP management. Instead, just deliver predictable statements about HP’s hardware, software and services strategies.
HP’s late fiscal 2011 and fiscal 2012 were pure turbulence.
- Former CEO Leo Apotheker was ousted in Sept. 2011. Around that time, HP killed the WebOS tablet business and also considered spinning off its PC business. Partners and customers were terribly confused.
- You arrived in September 2011 and immediately offered a more responsible tone to partners, customers and investors. You assured all audiences that HP was committed to its PC business.
- In May 2012, you offered clues that Autonomy was broken and announced layoffs of about 27,000 employees.
- By mid-2012 you announced a huge write-down for the EDS buyout — the latest sign that HP is struggling in the services market.
- In October 2012, you told investors that HP’s turnaround was going to take a substantial amount of time.
- And today, you told Wall Street that Autonomy essentially misled HP during the M&A process. Then HP took an $8.8 billion write off related to the deal.
The result: The VAR Guy and channel partners are screaming “Uncle.” Please take all your medicine now. Get all the bad news out on the table and turn the page for fiscal 2013 starting right now. Sure, there may be some weak earnings in fiscal 2013. The world will survive weak earnings for a bit longer. But investors and partners don’t like nasty strategic surprises. And HP has delivered far too many nasty surprises in fiscal 2012.
Can you start fresh for fiscal 2013? The VAR Guy looks forward to your reply — and positive predictability from HP.