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Why HP's Successful Turnaround Is Closer Than It Looks

By Rob Enderle, CIO
September 13, 2013 10:57 AM ET

CIO - Over the last couple of weeks, having met with different Hewlett-Packard divisions and run into several old HP friends, I'm starting to get a sense of where this company is going. As the saying goes, IBM and Cisco, and maybe even Microsoft, should be afraid. Very afraid.

Part of the reason you haven't heard more about this is that, when looking at a company such as HP, most analysts and reporters focus on printers, services, PCs and storage. But the power of a firm can't lie in the performance of any single division but, rather, in the synergy of the whole company. This is what CEO Meg Whitman has been quietly working to rebuild.

HP has had a difficult decade. Several ineffective leaders have occupied the CEO's office. One tried to bleed the company to death. On a scale of 1 to 10, with 10 being most difficult, Whitman faces a turnaround effort that's at least an 11.

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But darned if she isn't making progress. Recent organizational changes show that Whitman's tuning her staff to favor people and industry partners she knows can execute as she prepares to take HP to war. Let's take a look at some of the more interesting initiatives - keeping in mind that the last is not only the most powerful but the most speculative.

HP Teaming With VMware to Sell SDN Systems

Given its past problems with Cisco Systems and Oracle, HP has a poor reputation for partnering. Look underneath the covers, though, and you'll see that this was largely due to those companies getting greedy. It wasn't anything HP did.

In fact, you can argue that both companies lost more than they gained when they broke up with HP. Oracle in particular seems to realize that it made a mistake, and I'm hearing that Oracle is now looking to partner with Dell. (This doesn't bode well for Oracle's Sun hardware efforts. I recall a top Oracle official saying that Sun hardware blows. That's not a term of endearment, folks.)

Well, HP has been not-so-quietly moving to take advantage of this behavior. Most recently, the group led by Bethany Mayer - senior vice president and general manager of networking, not to mention one of the shining stars in HP's executive ranks - announced a partnership with VMware, largely because VMware and Cisco had started to flip from partners to competitors.

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HP is now working with VMware to differentiate both company's software defined networking offerings and create the kind of synergy that Cisco tossed away by choosing to compete with yet another partner.

HP Has Big Unified Communications Plans

HP hasn't been talking about unified communications much, and this happens to form the foundation for much of Cisco's growth strategy. Behind the scenes, I'm told, HP is working with large telecommunications companies to create a converged communications solution - think networking and telecom - that better meets both telco and user needs when it comes to this critical new frontier.

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