Meg Whitman: My Thoughts on Oracle, Restructuring, and Mitt Romney

In an interview with AllThingsD, Hewlett Packard (NYSE:HPQ) CEO Meg Whitman offered a rare insight into the challenges faced by the company, and herself, in the rough and tumble of the IT industry. We offer some glimpses from the free-wheeling interview that ran the gamut from new marketing and painful restructuring to the legal brawl with Oracle (NASDAQ:ORCL) and her plans (or not) for the White House.

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Her take on marketing: HP hadn’t told its own story well, particularly to the CIOs who made the all-important decisions that had such a profound effect on HP’s business. The marketing had to send out the message, “HP will do anything for its customers. If you get into trouble, we will darken the skies.”

On restructuring, Whitman was painfully aware that she had to remove complexity from the business as a precursor to the ultimate objective of “making it easier to sell, easier to buy from us, and easier to get work done at HP.” Hence the decisions about the PC business spinoff, WebOS, unification of marketing and communications, and the realignment of businesses between the top executives. None of this would be possible without a meaningful — and drastically lower — cost structure, one that could only be achieved with a reduction in employee numbers by 27,000, and also attacking supply chain and SKUs.

On hardware versus services, her vision for HP was crystal clear: Neither, but get the profitability of existing businesses up to speed, and then combine with strategies to take advantage of where IT trends could shift in the future – she chose cloud, security, and information optimization.

She categorically junked the likelihood of future spinoffs of segments of HP’s business, à la IBM (NYSE:IBM), saying: “As I see it, everything stays. Each of the pieces fit together. They are very big and significant businesses in their own right. The PC business is at $40 billion and number one in the world. Not long on operating margins but because of the way it’s engineered, it has almost an infinite return on invested capital. You gotta love that business.”

She handled a question on the dispute with Larry Ellison’s Oracle with customary bluntness: “The reason we went to the mat with Oracle on this was because we have a lot of customers on Oracle Itanium who do not want to switch, do not want to get off of HP Unix and on to something else.” Yet she made it clear that Oracle and HP had had a great run together, and if fact, once the suit clears, she would like to see the two companies work together again.

On a question about Republican Presidential candidate Mitt Romney’s view that she should have been elected Governor of California, and whether that meant she might get an offer for a post in the White House if he were to win the presidency, Whitman flatly denied the possibility, saying, “You can’t land at a company like HP, that has gone through what it has gone through, and think that you’re only going to stay 18 months.”

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