Meg Whitman: HP will cash in on Dell and IBM 'instability'

HP boss hints at further cuts across business

HP is set to cash in on the "instability" of IBM and Dell, according to its boss Meg Whitman, who hinted that her own firm has more cost-saving work to do.

Speaking at an analyst conference transcribed by Seeking Alpha, Whitman said HP will be the beneficiary of the instability caused by IBM's sale of its x86 server business to Lenovo in January, and Dell's recent privatisation.

She said that regardless of the long-term impact of the changes, in the short term, HP is set to cash in.

"We think there is a real near-term opportunity for HP to actually gain share among some of our competitors who appear to be a little less stable than we do right now," she said. "I [have] to say we look like the paradigm of stability in the industry right now, and so we'd aim to capitalise on that.

"With that said, my view is Lenovo will be a very strong competitor over the long term, and obviously we see IBM all the time in some of our services business and cloud business. But I do think there is a near-term opportunity for us to gain share given that we have consistency on our side."

She said that HP learned the hard way that stability is of paramount importance.

"What we saw when we said we might be getting out of the PC business back in August of 2011 [was] that shook the confidence of the channel," she said. "What I have learned about this business through our own tough experience... is instability is not our friend."

Whitman continued to talk up her commitment to the channel in her analyst address and said keeping partners happy was high on her to-do list.

"The channel represents about 70 per cent to 75 per cent of our hardware business, so if the channel is not healthy and we don't have a great relationship with innovative products that they can sell and make money on, we're not going to grow the company," she said.

"I think one of things that we've worked on very hard over the past two years, which is bearing fruit, is our relationship with the channel. They have trust and confidence in us."

Last month, HP prepared to make a round of cuts to its workforce, with hundreds of UK staff understood to be facing the chop.

Whitman said that although her five-year turnaround plan is on course, the cost-saving measures are far from over.

"There is more cost work to be done at HP," she said. "This is a vast company, [with] five major lines of business, 150,000 buyers [and] we operate in 166 countries... so there is lots more work that we can do to make ourselves more lean and efficient than we have run in the past."