EMC vs. HP and the Shadow of Carly Fiorina

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    Joe Tucci has been running EMC for around 15 years, or about the same time Carly Fiorina would have been running HP had she stayed with the company. Coincidentally, CEO John Chambers is stepping down this year after running Cisco for around 20 years. We can certainly argue that as a customer or an investor, over the last decade and a half, you’d have been far happier with EMC and Cisco than you would have been with HP, which changed CEOs four times during this period, often tied to some scandal or other.

    Ex-CEO Carly Fiorina is now running for president.

    I’ve often argued that Joe Tucci would make an excellent president, but he has repeatedly indicated that he isn’t stupid enough to run for that office. I’m at EMC World this week, and I’m struck by the huge difference between EMC and HP, largely because EMC is run by subject matter experts and a stable management team, while Meg Whitman’s HP is largely defined by leadership new to that company, declining revenues, destroyed acquisitions, no visible corporate product or marketing strategy and layoffs — lots and lots of layoffs.

    What started me thinking of this is that HP had limousines picking up attendees at EMC World so it could take attendees’ pictures and get their contact information. I tend to think of this kind of activity as similar to panhandlers on on-ramps looking for handouts. The firm has completely lost track of who the buyers are and has to effectively beg at competitor events to ask for handouts so its salesforce can beg for business. It really is sad to see how far HP has fallen.


    Two problems are evident at HP that EMC doesn’t have. Apparently, HP lacks qualified executives to run the company inside (the smart folks likely left years ago) and, as a result, its leadership is mostly external. This creates an unprecedented level of executive churn you don’t see at EMC, IBM, Cisco or Microsoft. Looking specifically at top executive consistency, this means that firms like EMC can actually come up and execute strategies while companies with the kind of churn HP has can’t because every executive has their own vision of where their unit will go. And without consistent leadership, you can’t possibly maintain a consistent strategic plan.

    From a customer perspective, even though every enterprise customer will share their core strategy, if you can’t maintain leadership stability across the strategic period, you can’t actually build a reliable strategy. So these briefings by firms like HP tend to be fantasy stories about what the company would like to do if it were more stable, not what it will do. This lack of consistency speaks to the problem I hear most from HP customers: HP can’t sell solutions even if they are based wholly on HP parts, while EMC has solutions like VCE, which blend both internal and external technologies.

    What if Carly Fiorina Had Stayed?

    Looking back, Carly Fiorina was fired as much as anything because her board was out of control, made up of two balanced opposing groups that couldn’t be managed by either Fiorina or Patty Dunn, the well-qualified but tragically under-supported non-executive chairman. (“The Big Lie” is a fascinating book on this.) Mark Hurd took over after much of the painful work Fiorina had done connecting Compaq to HP and he largely executed Fiorina’s strategy. You could argue that Hurd’s success was more due to Fiorina’s strategy and a far better behaved board than his own efforts, suggesting that had Fiorina stayed, she might actually still be there, since it is unlikely she would have made the workplace romance mistake that cost Mark Hurd his job and that would have avoided the Leo Apotheker mistake that resulted.

    Coming from AT&T and with nearly a decade of experience at HP, which she would have had if she had stayed, would have made her far more qualified than hail Mary emergency ex-eBay CEO Meg Whitman and she’d now be running for president from what would have been a far more successful HP and without the stigma of having been fired as CEO. In short, not only would have HP been stronger but Fiorina would be a far stronger alternative to Hillary Clinton than she now is.

    Wrapping Up: We Undervalue Stability

    We often talk about how conservative enterprise buyers are, and storage buyers are arguably the most conservative of the lot. IBM is the poster child for stability and in its over 100-year run, I’m only aware of one CEO who was hired from the outside. You can see the advantage of stability very sharply at EMC World this year. It is showcasing growth and technical advancements that have been years in the making and its focus remains tightly on what its customers want and embracing these customers with true solutions, defined by speed of deployment, real performance advantages, and industry-leading reliability, not just in product but with the company itself.

    Contrast this with HP, where focus of any kind seems an exception because it seems constantly engaged with some reorganization, layoff, executive change or disastrous acquisition. In an age of analytics, when an analytics firm like HP has to find customers by giving them rides to an EMC event, you realize you have a problem. And it isn’t that EMC needs help with attendee transportation. It is because HP doesn’t know how to use analytics to more effectively identify customers. I think that is because it likely wouldn’t even use its own solutions on a bet because they aren’t solutions.

    Strangely, I think had Fiorina stayed at HP, it would be far stronger today because she did understand the need for both a corporate solution approach and strong corporate marketing to pitch it. EMC has those things and the contrast it is showcasing against HP in particular this week is fascinating.

    Rob Enderle is President and Principal Analyst of the Enderle Group, a forward-looking emerging technology advisory firm.  With over 30 years’ experience in emerging technologies, he has provided regional and global companies with guidance in how to better target customer needs; create new business opportunities; anticipate technology changes; select vendors and products; and present their products in the best possible light. Rob covers the technology industry broadly. Before founding the Enderle Group, Rob was the Senior Research Fellow for Forrester Research and the Giga Information Group, and held senior positions at IBM and ROLM. Follow Rob on Twitter @enderle, on Facebook and on Google+

    Rob Enderle
    Rob Enderle
    As President and Principal Analyst of the Enderle Group, Rob provides regional and global companies with guidance in how to create credible dialogue with the market, target customer needs, create new business opportunities, anticipate technology changes, select vendors and products, and practice zero dollar marketing. For over 20 years Rob has worked for and with companies like Microsoft, HP, IBM, Dell, Toshiba, Gateway, Sony, USAA, Texas Instruments, AMD, Intel, Credit Suisse First Boston, ROLM, and Siemens.

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