HP's Whitman warns of chaos for Dell and EMC
In Hewlett Packard Enterprise staff memo seen by Channelnomics, HP CEO blasts Dell-EMC deal
HP boss Meg Whitman has said Dell's EMC acquisition will likely cause "chaos" for the companies as they integrate, rallying the troops to "take advantage" of the situation.
In a memo sent to all Hewlett Packard Enterprise staff and seen by CRN's sister site Channelnomics, Whitman told staff that trying to bring together the two channel programmes of the companies will be tough. She also made the same point about bringing together the two firms' portfolios.
"This move is going to cause chaos in the channel as they bring together two different programmes and approaches," Whitman wrote. "Bringing two portfolios together will require a significant amount of product rationalisation, which will be disruptive to their business and create confusion for their customers. Customers simply will not know if the products they are buying today from either company will be supported in 18 months."
Whitman also told employees that the interest the newly joined company will have to pay back annually on the debt it will have on its balance sheet means R&D at Dell will take a hit.
"Dell will need to pay roughly $2.5bn a year in interest alone," Whitman said. "That's $2.5bn that they will allocate away from R&D and other business-critical activities, which will keep them from better serving their customers."
Further, the HP CEO wrote that integrating EMC and Dell is "no small feat". With a combined $75bn in revenue and nearly 200,000 employees, the firms face a challenging road ahead, according to Whitman.
"This will be a massive undertaking and an enormous distraction for employees and their management team as two very different cultures come together, leadership teams shift and an entirely new strategy is developed," she told colleagues.
As such, she described the news as "a good thing" for Hewlett Packard Enterprise and an opportunity to "seize the moment".
"This is validation for the strategy that we have laid out and I am not surprised that others would try to emulate it," Whitman wrote. "But, the reality is that we are two years ahead of the game and it will be difficult for others to catch up."
She implored staff to spread the word of HP's "story" and take advantage of Dell's road ahead post-merger.
"All of this [comes] at the very moment when we have completed our journey to create two new, focused companies," Whitman said. "We're organised, we have a strong balance sheet and our innovation engine is humming. So, get out in front of your customers and your partners. Tell them our story. Take advantage of this moment."