HP's Léo Apotheker: We're heading to the cloud

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In an exclusive interview, HP's new CEO expands on his strategy and offers frank assessments of his competition

A day after Hewlett-Packard CEO Léo Apotheker outlined his strategic vision for HP -- a plan chock-full of new cloud offerings -- he sat down with IDG Enterprise Chief Content Officer John Gallant and InfoWorld Editor in Chief Eric Knorr to share his thoughts on a wide variety of issues in this latest installment of the IDGE CEO Interview Series. In this conversation, Apotheker, who's been with HP just over four months, talked about why HP is better positioned than IBM to help customers deliver on the promise of cloud and how he plans to rapidly eclipse the likes of IBM, Oracle, and others in the analytics market. (Short answer: Apotheker will leave old-school BI to the other players. HP's focus will be on analytics and Big Data.)

When it comes to the server market, Apotheker isn't shy about assessing Cisco's prospects, saying John Chambers and company are neither a threat nor an annoyance: HP simply doesn't see Cisco in sales situations. Apotheker also has strong views for IT executives on how consumerization and the cloud will reshape their jobs and their role in the corporation. Read on for more on HP's mobile strategy and cloud offerings, how HP's service offerings will evolve to support private cloud, and how HP needs to "sell itself" better to customers, investors, and partners.

John Gallant: When you were announced as CEO, there was some surprise in the industry. What do you want to tell our readers about why you're the right person for this job, at the right time for HP?

Léo Apotheker: I'm almost tempted to say I don't think I need to answer that question, but I won't go that far. There must be more than one person as the right person to be the CEO of HP. I would be pretty arrogant to believe that there is only one human being on the whole planet who is capable of doing that.

This being said, I believe that I bring to the table a certain number of unique assets, like any other human being when they're brought to the table. Mine is to have a pretty broad view on what information technology is and where it can go, and then translate that into a strategy and then into an executable plan. I think that's the main reason I am where I am. And some of it you've heard yesterday and today.

Actually, our customers want the same. And in all fairness, so do our investors. Everyone kind of converged in saying, "We know that you're good in this, you're good in that, you're good in a whole bunch of things, but give us an overarching kind of a perspective. What is HP all about and where is HP going and what is HP's view on cloud and connectivity and such and such?" It was great encouragement to do what I wanted to do on day one, which was to actually describe an architecture for the future; an operating model and an architecture for HP; and a vision, a technological statement, and a business statement of where HP should be.

Now, what do we need to fix? We need to address the fact that when a customer really wants to work with HP, along the entire breadth of the portfolio, we need to make that a lot easier for our customers. It's not always easy for a customer to span the bridge across all of our silos. We need to fix that, and that's work in progress. We need to make sure that we have better interoperability, that technology is actually doing some of the things that we really want people to understand emotionally as well as being a total embrace of technology. We'll fix that too. But all in all, I think HP is a formidable company that has great assets, it just needs to bring them together in a very powerful way and deliver that value to the market.

Gallant: Léo, what did you mean when you told Businessweek that HP has lost its soul?

Apotheker: Well, HP is a company that had a very distinct way of being. HP is not just -- and I don't want to sound arrogant again -- but HP is not just any other company. There's a history behind us: the HP way.

Gallant: A storied way.

Gallant: How much of a cultural shift is it for you, from running a software company to working what's largely been a hardware-centric company?

Apotheker: It's been pretty easy. Both of them touch essential parts of the IT stack. You can't really be a good software executive if you don't understand something about hardware -- that's what you need to run the software. And I don't think you can be a good hardware executive if you don't understand the software. So I've been learning a lot about the hardware, and it's great. It's a great technology. I am much more fluent today than I was four months ago, that's for sure.

Eric Knorr: So now comes the part where we try to find out a little more detail about the cloud announcements of yesterday. The three parts appear to be infrastructure as a service, platform as a service, and an application store.

Apotheker: And connectivity.

Knorr: Connectivity as part of a cloud offering? Maybe we could start there because I'm not quite sure what you mean by that as a cloud offering.

Apotheker: I think there will be as many combinations of these three elements between traditional and on-premise private clouds, public clouds, semi-public clouds, as there are enterprises. And one of the reasons where things don't go straight into the cloud is the legacy of the applications. Some of these applications would be very hard to move into the cloud if you don't want to provoke a rainstorm and the cloud collapses.

HP has already a lot of experience in helping customers make these decisions, make the trade-offs, and then help people move into these hybrid environments. We actually create hardware and software to manage hybrid environments. Some of our technology allows people to have a complete end-to-end vision of all of these mixed architectures and operate them as one. We have a real competitive advantage in doing that.

We can do it rather easily because we have no legacy on the application side, so we have nothing to protect. We have no database to protect or whatever, and therefore we can actually take a very neutral and customer-centric view on what is the best solution for the customer. And that's what we're all about.

Gallant: Specifically on that front, I wanted to ask you -- does the set of offerings from EDS change around helping customers get to those hybrid cloud environments?

Apotheker: So in order to respect my branding people, EDS doesn't exist anymore.

Apotheker: Well, about the things they don't have -- they don't have a public cloud offering, they don't pretend to have an open marketplace where you can have at the same time consumer and enterprise applications. What we really aim for is that individual within an enterprise, the famous -- for the lack of a better term, forgive me if it's a horrible term -- "prosumer." People who want one device on which they can have their private and their professional life nicely separated, where they know in confidence that privacy is privacy. And when a company knows that confidentiality and compliance is also guaranteed, we can provide this.

We can provide this because we still have a foot -- a pretty big foot, actually -- on the consumer side of the business. IBM can't provide that. They might talk about it -- I mean talk is cheap. But delivering all of this is a whole different story.

Gallant: And a couple of other areas to drill down into, because these two companies ...

Apotheker: I would rather talk about HP than talk about IBM.

Gallant: Well, I'm trying to help people understand ...

Gallant: I think it's very interesting for our enterprise IT readers to learn more about the app store, because mostly what they know of app stores is that they're consumer products, consumer apps. What should people know about this? What is there for an enterprise IT person to understand?

Apotheker: Well, you know, it would give CIOs an opportunity to put at the disposal of the users apps that can be easily consumed by employees of the enterprise that have been certified, approved, secured, and were conformed to IT strategy and IT procedures and processes. Some of them can be very large apps, but then you don't really need to put them into an app store. Some of them can be more short-term things. An application to manage your expenses, an application to use your touchpad in order to capture your expenses -- you know, scan them with a camera, upload them, and you are done. A whole bunch of things that will make life a lot easier, a lot simpler.

Then of course there are all of the apps that you could use when it comes to analyzing and looking at data, so it becomes a real catalog of capabilities that can be dynamically managed. If something gets corrupted, something gets polluted, you can take it out. You can immediately remove it from all of the devices if you have such a capability -- you can bring your things on-stream. It becomes a completely new way of interacting, where I believe CIOs could close the gap in a significant fashion between the old dilemma that you're delivering value for the business users and actually being ready on the IT side. I mean, we all know the story about the time it takes between the expression that a consumer, that a user has, for IT to deliver it. This will shorten the timeframe significantly.

Gallant: I'm from Boston, but now that I'm out in California, I can say -- that sounds cool.

Apotheker: It does sound cool. It is awesome as well.

Knorr: Verticalized applications.

Apotheker: Verticalized, superverticalized, or very geographically specific or any combination of the above. By the way, if we're doing this really well, then our open cloud app store, enterprise app store, could actually be a great way for our partners to make more money, because suddenly they have a much wider market for whatever intellectual property they would create.

Gallant: I want to talk about the network space. Over the past couple of years, HP has done a really good job bringing the networking group tighter into the fold and getting more value out of that for customers. What do you see as key to competing and winning in the network space right now against the Junipers and the Ciscos of the world?

Apotheker: The good news is we must be doing something right, because quarter after quarter after quarter after quarter, we are gaining substantial market share. We have great technology. We cover a lot of space when it comes to networking. Our price-performance ratio must be very optimal because we just -- forgive me the expression -- but we, to use the American vernacular, "beat the crap" out of the competition. And that's good, we'll continue doing that.

One of the reasons why we're capable of doing this is not just because our networking gear is so good; it's also because we have this converged infrastructure approach, where people don't just buy networking with storage or service, that you buy the whole solution -- which is what they really want. And because it's all optimized internally as well, it has a double-whammy effect. So far, so good, and we'll continue down the same path. We'll continue to innovate in our networking gear of course, just to keep the competitive advantage. And we can go many places.

Knorr: With tablets, what will you be offering the enterprise that Apple can't?

Apotheker: Well, I think two things: There are a certain number of native things that are built into WebOS that made WebOS into a very unique proposition. The best way to describe it is that it's capable of truly multitasking, it's capable of really sharing information, and it's able to synergize a lot of the things that are happening in the Web. The reason for that is it's the only operating system, Apple's included, that has been designed from the ground up to assume that you're always connected. So that's point No. 1.

And point No. 2 is that we are capable -- and that's the thing that makes HP rather unique -- of totally securing and managing these devices for an enterprise with our technology. The CIO can be absolutely at ease with knowing that the devices he will get from HP, he will get something that is totally secured, absolutely manageable. He can switch these things on and off whenever he wants, for any user, and all of the capabilities that are developed with it.

Knorr: What technologies specifically?

Apotheker: You take the classical dilemma that you have as a CIO when you give someone a mobile device. How do I make sure that it's being used in an appropriate way? How do I make sure it's being used in a compliant way? How do I get it out of the user when the user isn't with the company anymore? And if the user doesn't want to give the device back, how do I deactivate it -- instantaneously? These are trivial questions, maybe, but they are hugely important for CIOs. Compliance is a topic that keeps many people awake at night, I can assure you of that.

Gallant: One of the things that happened with the desktop revolution was that corporate IT stepped in and said: These are the standards, these are the machines we'll buy and support.

Is that horse out of the barn already with the tablet? Is it too late for enterprise IT to do that with the tablet?

Apotheker: I think enterprise IT will have to do that, only because of security and compliance concerns, and that's basically one of the markets we're going to aim for.

Gallant: To the extent of saying this is the tablet we'll support?

Apotheker: Yes.

Gallant: So you don't feel that the cloud threatens IT, that ultimately it becomes much easier in many cases for business units or individuals to go around IT to get what they need?

Apotheker: You know, that's a great question.

Gallant: And I think this is what a lot of our readers are wrestling with right now.

Apotheker: Let me put it this way, and I sincerely believe this: Cloud is like any other technology. It can be used in one way or another way and, as we just discussed, cloud can have many iterations and rendering capabilities, private to public. So let's just look at the technology and forget how it's being distributed or commercialized.

The cloud technology is neutral technology. If corporate IT embraces this technology to make it into a real tool to provide information and technology to their own users and use it as a tool to innovate significantly faster, therefore shorten the gap between business and IT, then I think it's going to be a formidable advantage for corporate IT to use the cloud. It will actually give them a whole new lease on life, if I may say so. If they won't, yes, there is a bit of a danger that people will simply give up on 'em, if I may use that expression. And they will still use corporate IT for all of the heavy back-duty, back-office transactional things. And for all the other stuff, they'll try to go around.

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