HP VARs To New CEO Whitman: Consistent Channel Messaging, Please

Hewlett-Packard solution providers are willing to overlook Margaret "Meg" Whitman's lack of channel experience as she steps up to run the company as its new president and CEO, but they are very clear about what she needs to do to restore some of the channel luster HP has lost in the last year.

HP on Thursday fired Leo Apotheker after his 11-month run as president and CEO, and replaced him with Whitman, who prior to the appointment was most well-known for building eBay into the star of the on-line auction business during her 10-year tenure as that company's former president and CEO.

Solution providers' initial reaction to the hiring of Whitman was generally positive, with several HP partners calling her a brilliant executive who can be expected to make the right decisions for HP despite her lack of channel and enterprise experience.

However, many of those same partners said the big test for Whitman will be how she addresses HP's recent inconsistent messages to customers as a whole and the needs of the channel in particular.

The appointment of Whitman as president and CEO of HP is great news, said Rich Baldwin, CIO and chief strategy officer at Nth Generation, a San Diego-based solution provider and long-term HP partner.

"I think HP needs decisive leadership now," Baldwin said. "Meg had a track record of doing big things at eBay. I hope she continues that record at HP."

Baldwin said that he is not concerned about Whitman's previous focus on the consumer market and lack of experience in the channel.

"The message is loud and clear: HP's success has been as a channel company," he said. "She's smart, and she's going to take HP in that direction. Leo was taking it in the opposite direction. But it will take some time to change directions."

One solution provider, who requested anonymity, said that HP's fortunes can only move forward under Whitman, as long as she focuses on the basics.

"Up's the only way it can go. I anticipate a much more 'Hurdian' style from Whitman," the solution provider said, referring to former HP President and CEO Mark Hurd. "I think she'll get back to basics from the salesmanship side. It will work well as long as she doesn't say anything that hurts HP. If she says nothing at all, things will be better."

Next: Asking Whitman To Hear Out The Partner Community

Whitman has a number of challenges facing her, the solution provider said. HP has been wandering in some of its key markets, with a storage line that is long in the tooth, the public fight with Oracle that's turning HP customers away from HP servers, and the disruption caused by HP's decision to explore selling or spining off its Personal Systems Group (PSG), the solution provider said.

"The best thing we can do is to get to a decision on PSG as fast as possible," said Whitman, Thursday on a conference call with financial analysts. "This decision is not like fine wine. It is not going to get better with age. We have got to do the analysis, get to the decision and then tell our customers and the market what it is we are going to do."

Whitman should also consider canceling HP's decision to acquire U.K.-based Autonomy for over $10 billion, the solution provider said. "It's not necessarily a bad deal," the solution provider said. "If I were Whitman, I think I'd find a better way to spend the cash. Maybe invest more in PSG."

Whitman on the conference call said she will also review the Autonomy deal, though she noted, "From what I know now, I think the strategy is right and the initiatives we undertook on August 18 are right."

While Whitman's experience has primarily been in the consumer market, that does not necessarily mean she would not be able to lead HP, the solution provider said.

Apotheker sent mixed signals to channel partners recently, including a push a few months ago for partners to invest in mobility and tablet PCs and then last month deciding to kill its TouchPad tablet PC and get out of PCs, the solution provider said.

"To me, that is more disruptive to the channel than Meg's lack of channel experience," the solution provider said. "Meg has to stick to the nuts and bolts, and then she can do well. She has a lot of smart people there to advise her."

Paul Hilbert, principal at Englewood Cliffs, N.J.-based HP partner Network Doctor, said Whitman is a "proven leader" and capable of taking the ball and running with it. Hilbert added, however, that there are several things Whitman should do off the bat to get partners excited about the "new HP."

"She should see what the community wants," he said. "That should be her first order of business. See what the partners want from her."

For his part, Hilbert said he wants more integration across product lines, and he wants HP to take a less buttoned-up approach. With Whitman's experience in consumer and entertainment, she should be able to take cues from market leaders like Apple and give HP's products a fresh coat of paint and make them more attractive to partners and customers, he said.

At the same time, Whitman has her work cut out for her, righting HP's massive tablet misstep which led it to discontinue the TouchPad tablet due to poor sales, despite some solid reviews, Hilbert said.

"The flop on the tablet needs to be fixed," he said. "They really got people excited about that."

Next: Make The Call On PSG

And while Whitman lacks experience in the IT channel, Hilbert said he's confident that she can lead partners to success.

"HP has always been committed to the channel," he said. "I don't see that being a problem."

Harry Zarek, president and CEO of Compugen, a Richmond Hill, Ont.-based solution provider, said the best thing Whitman can do immediately is reassure HP's channel that HP is stable.

"It's really about communicate, communicate, communicate," Zarek said. "Talk to the channel, and communicate very clearly."

That communication has to go beyond the channel, too, he said.

"Stability is the key message for her," Zarek added. "So she needs to make sure she takes the same message about stability to the broader market, to main street, to all the communities interested in HP. There are longer-term things she will need, but not now. Get back to work."

Whitman and HP should also decide on PSG's future early on, Zarek urged.

"The longer they wait, every day, is not helpful," he said. "It's not flip a coin and decide what to do, but I think when they do make their decision, that will at least instill some confidence, and they can share some of the reasoning behind the decision they make. I think that's really important."

One of HP's top solution providers urged Whitman to be as clear as possible on HP's channel relationships and how HP will incentivize partners to stay aggressive behind HP products and services.

"[Hurd] was really aggressive, and the channel really liked that market aggression," the partner said."If Meg can take a lesson, that's to say what [HP] is going to do with the channel to defend it in the market. The tone from Leo was not necessarily channel-embracing. They talked about the channel, but I don't think they were leveraging the channel."

NEXT: Partners' Wish List For HP's Board

Some solution providers also hope that HP's Board of Directors start to show more leadership than it has shown in the way it handled HP's relationships with Hurd and Apotheker.

One HP solution provider said neither Apotheker nor HP's Board seemed to strategize based on feedback from HP's lieutenants.

"They'd better be listening to the people on the inside and what challenges they are going through," he said. "Those senior executives are the ones who are aware of channel feedback and probably aware that the market's looking for a stabilized product roadmap and a stabilized team."

Another long-term HP solution provider said HP needs a board that can start doing its job. "The board needs to keep HP out of the headlines," the solution provider said. "I'm hoping the board will get its act together. We just need consistency and predictability."

Zarek said that despite the overall criticism of HP's board, it's definitely a plus that the board acted quickly to replace Apotheker.

"Kudos to the HP board for reacting quickly and making a decision quickly," he said. "If they'd had an interim [CEO], or no one at the head for a time, it would have made it harder."

Andrew Hickey and Chad Berndtson contributed to this story.