{"id":1340,"date":"2012-08-23T08:48:00","date_gmt":"2012-08-23T08:48:00","guid":{"rendered":"http:\/\/localhost\/projects\/horsesforsources\/has-hp-bottled-it_082312\/"},"modified":"2012-08-23T08:48:00","modified_gmt":"2012-08-23T08:48:00","slug":"has-hp-bottled-it_082312","status":"publish","type":"post","link":"https:\/\/www.horsesforsources.com\/has-hp-bottled-it_082312\/","title":{"rendered":"Has HP bottled it?"},"content":{"rendered":"

\"\"August 22nd was a traumatic day for HP for two reasons:<\/strong><\/p>\n

1) It just had a quarter that makes the Boston Red Sox* look good<\/strong>, taking an $8.9bn loss, fuelled by a massive write-down from its 2008 EDS acquisition and a couple of billion in severance costs from its recent layoff.<\/p>\n

2) It cancelled its September global analyst summit.<\/strong> \u00a0We haven’t seen this type of thing happen since the days of the dotcom bust. \u00a0A major tech services provider wimping out from facing the analysts at the last-minute?<\/p>\n

OK – so the financials were immensely horrible. \u00a0Having to admit to its shareholders that it paid an obscenely high price for EDS, combined with managing the\u00a0integration\u00a0so poorly it’s barely worth a quarter of what it paid for it in today’s market is a bitter pill to swallow. But hey – we’re a forgiving world, right? \u00a0We love a comeback story, right? \u00a0Can’t HP become the Bill Clinton of the services business? \u00a0Didn’t John Travolta resurrect his acting career quite well after Two of a Kind<\/a><\/em>?<\/p>\n

Instead, someone in HP has made the decision to run and hide – to cancel their September analyst event, where we had already planned our pub crawls with our friends flying over from Europe, where we were prepared to open our hearts to Meg to find some semblance of hope for the future of the firm.<\/p>\n

We know HP is in trouble, now we want to know the recovery plan<\/strong><\/span><\/p>\n

As someone told me yesterday, “Meg has to focus on nothing but cost-cutting over the next couple of years”. \u00a0Well, we know that is the case, but surely there is a growth plan in there somewhere too? \u00a0Surely HP can share where it sees its future and how it plans to lead the market once again? \u00a0There was<\/em> a $2bn profit in those results once you took away all the write-downs….<\/p>\n

Sadly, refusing the face the world and communicate the growth plan only fills us with even more dread for the future of the firm. \u00a0It sends the wrong message. \u00a0We made the point, with the recent layoffs<\/a>, that\u00a0Meg Whitman is doing what she was hired to do \u2013 straighten the ship, re-energize the management talent and getting HP on a roadmap to competitiveness. \u00a0<\/em>We know HP needs to gets its financial ship in order, so there’s not a lot else to hide, is there? \u00a0Is confidence with the leadership now so low, that it can no longer take a few pots shots from the analyst peanut-gallery?<\/p>\n

What concerns me now is the speed<\/em> of the needed change HP has to go through here. When IBM hit trouble in the early ’90s, it laid off a (then\u00a0unprecedented)\u00a060,000 employees, which started its recovery process (around 100,000 employees were let go in total that year – about a quarter of its workforce). \u00a0HP’s recent restructuring surgery has likely used too blunt a knife to make the sweeping changes it needs, to gets its act together – barely 8% let go at $1.8bn in costs? \u00a0Doesn’t sound like the sweeping changes it needed to right the ship…<\/p>\n

The Bottom-line: \u00a0Hiding from the analyst community only sends a negative message to the world<\/span><\/p>\n

Clearly, Meg is realizing she has to perform a lot more aggressive surgery than this to right the ship. \u00a0However, shying away from the global analyst community sends the wrong message. \u00a0HP has a lot of positives to sell us – I sat through an interaction discussion this week with one of its BPO leaders and there is still a great customer-centric culture, a solid market footprint and some glimmers of hope for future client wins. \u00a0We talk to HP customers all the time and their main concern is the\u00a0direction<\/em>\u00a0the firm is taking – not the current performance managing their day-to-day IT and business services needs.<\/p>\n

Meg – you need to face the world and share your ambitions. \u00a0Hiding under the covers only fills us with fear for the firm and all it stands for…<\/p>\n

The picture above is taken from a famous British\u00a0advertising campaign<\/a>\u00a0for\u00a0“HP Sauce” which is actually a very popular “brown” sauce in Britain (tastes a bit like Worcestershire sauce). \u00a0The campaign that depicts how how awful life would “without HP”<\/em><\/p>\n

*Readers from the United Kingdom can substitute said analogy with “Liverpool FC”.<\/em><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

August 22nd was a traumatic day for HP for two reasons: 1) It just had a quarter that makes the…<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[48,78,81,87],"tags":[303],"organization":[],"ppma_author":[19],"class_list":["post-1340","post","type-post","status-publish","format-standard","hentry","category-business-process-outsourcing-bpo","category-hfsresearch-com-homepage","category-it-outsourcing-it-services","category-outsourcing-events","tag-enterprise-irregulars"],"yoast_head":"\nHas HP bottled it? - Horses for Sources | No Boundaries<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.horsesforsources.com\/has-hp-bottled-it_082312\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Has HP bottled it? 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