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Kurt Marko
Kurt Marko
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HP's Turnaround: It's Time To Believe

Not only does CEO Meg Whitman seem to have a solid strategy, but there's plenty of evidence it's starting to work. Maybe it's time for skeptics like me to admit we're wrong.

On the consumer side, Whitman's strategy means implementing and sticking with a plan for the post-PC world (no abortive Palm tablets this time). Whitman told CNBC in a May interview after HP's last quarterly earnings report that the crux of HP's client strategy is diversification: "What we're going to do is basically segment the market and create the right product for that market at the right price. Sometimes that requires Android and an ARM chip set, sometimes that requires Windows and an Intel chip, depending on the market segment, but this is the new world order." If this sounds a bit like Apple (right device for the right segment; phones, tablets, laptops, hybrids), it is. However, unlike Samsung, HP has the depth, breadth and business relationships to actually become the Apple alternative.

While the client side of HP's transformation is still in the design and prototyping phase, the enterprise side of its comeback campaign is making strides with HP leading the pack toward a new era of hyperscale and software-abstracted (defined) hardware. As we reported, HP's microserver, Moonshot, is packed with innovations like high-density cartridges that can support a variety of compute, network, graphics and storage nodes and integrated communications fabrics, including a high-speed 2D torus mesh between server cartridges. It's an engineering tour de force that could, in Whitman's words, "mark the beginning of a new style of IT that will change the infrastructure economics and lay the foundation for the next 20 billion [connected] devices."

But HP isn't stopping at re-engineering servers. At last month's Interop, the company showed off perhaps the deepest SDN/Open Flow product portfolio of the show (described in Network Computing's SDN comparison). At its recent customer/partner event, HP Discover, the company unveiled new SDS features in the StoreOnce Virtual Storage Appliance and a flash storage system delivering 550K input/output operations per second with sub-millisecond latency.

The upshot is that HP is finally on the offensive, tackling the combined challenges of a declining PC market, cloud-scale infrastructure and software-abstracted application resources. Meanwhile, its most direct competitor, Dell, is in retreat, slashing margins to desperately retain PC market share and simultaneously seeking to hide from public scrutiny by going private. While HP's resurgence could prove disastrous for Dell (and uncomfortable for the likes of Cisco, IBM and Oracle), it can only be a good thing for enterprise IT as it increases competition and innovation.

HP still has plenty of challenges ahead: delivering a suite of compelling mobile products, managing declines in its PC and printer businesses, convincing IT buyers that microservers make business sense, and providing a cloud service portfolio that can rival Amazon's depth. But unlike a year or two ago, the HP of 2013 looks ready to attack the future, not cling to its past.

Kurt Marko is an InformationWeek and Network Computing contributor and IT industry veteran, pursuing his passion for communications after a varied career that has spanned virtually the entire high-tech food chain from chips to systems. Upon graduating from Stanford University ... View Full Bio
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