Whitman to Chambers: I’d rather have my hand right now than yours

HP CEO outlines long-term strategy for turning company around.

Meg Whitman, president and CEO of Hewlett-Packard (NYSE: HPQ) since 2011, wants you to know that her company is in it for the long haul. She's not worried about commoditization. She's committed to the services business. She will make sure that her sales people don't bypass CIOs. She believes that HP needs to make a smartphone, probably in 2014. And, yes, she thinks HP's odds these days are better than Cisco's (NASDAQ: CSCO).

Speaking to an audience of more than 5000 CIOs and senior IT executives at the Gartner Symposium ITXPO in Orlando Wednesday, Whitman faced tough questions from the firm's analysts, as well as from IT executives whose questions had been videotaped in advance. In response, Whitman made it clear that her strategy aims for long-term success, not a quick boost to the next quarter's bottom line. To turn the company around, she is focusing on investing in solutions for cloud computing, security and information optimization.

HP's services business is a key component of Whitman's long-term plan, and she took pains to assure the audience that she is committed to it. While the services division has had a hard time, she said, recent changes in its leadership are putting it on a better track.

"In the end, services is where we can help you solve some of your problems," she said. "Our enterprises services is the No. 2 services business in the world."

Asked about rumors that HP may start renegotiating underperforming or unprofitable contracts, Whitman said that she is not going to leave any customers high and dry. However, if your contract is not profitable to the vendor, you will likely get a call one of these days and a request to come up with ways to make it useful for both parties.

"We have a tremendous sense of obligation for our customers," she said. "We will not leave anyone hanging. What we will do is have an adult conversation. Here's a joint problem, what can we do jointly to solve it?"

While Gartner's analysts were quick to note that HP's core markets are declining, Whitman pointed out that her company sells $450 million worth of product each and every day. She reiterated that nobody should expect a major turnaround before 2014, but said she is already seeing momentum.

Whitman had some choice words for Cisco CEO John Chambers, who recently said that she took on the job at HP "purely out of the goodness of her heart, and I would have told her not to ... Mathematically, you have to say low odds."

Although Chambers is a good friend of hers, Whitman said, they are fierce competitors and she aims to win.

"In the networking space, which is [Chambers'] core businesses, we now have 18 percent unit share, 11 percent market share and we're moving fast. And I think when you put 320,000 HP people against a set task, don't bet against them," she said. "I'd rather have my hand than John's hand right now."

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