Rival HP and Cisco CEOs Exchange Barbs
Rival HP and Cisco CEOs Exchange Barbs by UCStrategies Staff
In a sign that HP is a more formidable competitor against Cisco under Meg Whitman’s direction, CEO John Chambers uncharacteristically let down his southern charm at the Gartner Symposium/ITExpo Tuesday in Orlando, Florida. “HP is a good company that lost its way,” he told the audience, downplaying any competitive threat from his rival. Chambers had kinder words toward HP CEO Meg Whitman, stating if anyone can fix HP’s challenges, "Meg can," but made it clear there was no gentlemen’s agreement between him and his friend Whitman, telling the audience of 8,000 that as competitors, Cisco would do whatever it needed to to win.
Throwing a disguised blow at HP, Chambers predicted a shakeout among technology vendors in which only three of the six top vendors would prevail. In addition to Cisco, Chambers expects Oracle to survive. One does not have to do the math to conclude that the Cisco CEO believes the odds are stacked against HP. “Any of the top six vendors who thinks they’ll be in that top six five years from now for sure will be wrong.”
Taking to the symposium on Wednesday, Whitman went on the defensive. “I’d rather have my hand than John’s hand right now.” HP’s hand, which Whitman played adeptly to the crowd during the Q&A session with Gartner analysts, is China. “HP is the leader in networking in China with 42 percent of the market share,” said Whitman, making a veiled reference to Cisco’s acrimonious relations with Chinese firms. The remarks come as Cisco’s rivalry with Huawei Technologies Co. and ZTE Corp. is front and center in the media, following allegations of spying against the telecom gear makers from the U.S. House intelligence committee. China will help fuel the accelerated growth Whitman forecasted for HP 2014.
As for talk of HP’s demise, Whitman told a different story. “We are setting this company up to win in the next 75 years,” she said. “It would be more risky to not do anything.” The HP CEO seemed to be more concerned about whom she considered to be her newest competitors, Facebook and Google. But her presentation of HP’s technology platform was squarely in Cisco’s market, citing HP’s focus as cloud computing, information optimization and security.
Reminding the crowd of HP’s invention of “converged infrastructure,” she said no radical changes were planned to HP’s product and services platform and reiterated HP’s commitment to its PC and services businesses. On mobility, she stated HP has no plans for a smartphone in the near future. Absent any new product innovations, the market is more eagerly waiting for the former eBay CEO to demonstrate her operations expertise. In the third quarter, HP presented an earnings loss of $8.9 billion on a five percent decline in revenues.
Chambers seems to be relentless in his pursuit of HP since Whitman took the helm. Presenting more fatalistic statistics in September, in reference to Meg Whitman’s appointment, he stated that a fifth CEO on a job has never turned around a company. In the same interview, he speaks of the helpful guidance Cisco received in its early days from HP’s Lew Platt.
HP’s enduring corporate culture may be Whitman’s most powerful defense, as she reminded the Gartner crowd, “As it turns out, it’s very hard to kill founder DNA. Innovation is everywhere at HP. We need to package it and bring it to market and tell people about it.”
Whitman, recalling her former run for California governor, could not escape Cisco’s political rhetoric. As she left the stage, Coldplay’s “Viva la Vida” was playing, “I used to rule the world.” (CL) Link