Open Letter to Meg Whitman

May 6, 2013

Meg Whitman
President and Chief Executive Officer
HP

Dear Meg,

You inherited the British Empire of technology companies; magnificent yet fading, coasting on past glories, beset by scandal and turmoil, and split between being an industrial powerhouse (your enterprise businesses) and a colonial power (your consumer businesses).  Unlike the British Empire (and your predecessor), you appear to have decided to keep the colonies. Great. But if they are to help drive HP’s success, you need to fix them.

How about starting with your PC business since it is hurting the most? I bet the answers you get when you ask your people to identify the main problems with the PC business include words such as “margins,” “commodity,” “competition,” and “shrinking.” They may even mention “products,” “cycles,” and “design.” But the biggest issue is none of those. Instead, it is something that HP delivers to enterprise customers and not to consumers: access to scale.

Providing access to scale correlates surprising closely to profits in technology businesses. Look how much of Google’s profit is based on it, for example.

An HP enterprise customer can come to you for a turnkey datacenter of incredible capability. Who else can deliver software, hardware, security, analytics, and service with the sheer panache of HP? Your entire might is on tap for an enterprise customer.

In contrast, go into your local Best Buy and look at one of the HP PCs there. Other than the unfortunately cheap plastic HP logo, what couldn’t come from some knock-off producer? Right now, all that HP’s sheer size contributes to its personal computing devices are convoluted naming schemes, confusing model distinctions, and inertia in product release schedules.

Early HP consumer products were expensive, but each one had performance and quality that could only have come from a very large company that invested enormous resources and great amounts of corporate pride in making something truly great. (And the names were simple and clear.)

HP needs to regain corporate consumer pride in its PCs, and you can. Like others, you need to simplify your product line. But for HP, the critical Aikido move is to use the momentum that simplifying the product line would give you to move away from producing commodity PCs. Fewer products means each one can be just a bit faster, lighter, brighter, longer, and stronger.

There is no single answer to giving your personal computing customers access to scale. Instead, it becomes one of the primary criteria for resource allocation. Clearly design needs more focus. Innovative fabrication techniques. That thrilling feel of quality. But there's more. Think big. Buy the entire output of IGZO displays. Invest in new battery technologies. Start using 3D printed sintered titanium.

Access to scale in software is a separate subject, and clearly, over time, an area where you’ll want to have more control than you do right now. I’m not suggesting you go quite so far as being to Ubuntu what IBM is to Linux, but it might make sense.

One of the primary areas you can provide access to scale is through connectivity and the cloud. Why shouldn’t every HP PC and every HP printer be able to connect to a real print cloud? Why not work with Adobe or Dropbox or Google to better integrate document management into the HP PC experience? Does backup and security have to be such a PITA? And what about using virtualization to help me do all these things and better manage my PC to boot?

The result should be that if I need a PC, I will want it to be an HP, even though it is a little more expensive. Take your scale out for a spin.

This is all relatively short term, and may appear to apply only to PCs. But that isn’t true. This effort will force your personal computing organization into a new mold, one that looks differently at products, that isn’t so siloed, so inward focused, so unable to unearth the aesthetics of desire. That, rather than the almost inevitable increase in the PC division’s health, may be its most important legacy.

'm looking forward to seeing this work.

Warm regards,

Larry Zulch