Whitman steps down from HPE

Whitman steps down from HPE
Hewlett Packard Enterprise Chief Executive Meg Whitman has announced that she will be stepping down early 2018. The company has confirmed that current President..

Hewlett Packard Enterprise Chief Executive Meg Whitman has announced that she will be stepping down early 2018.

The company has confirmed that current President Antonio Neri will take on the role of CEO as of Feb. 1, 2018.

Background

The Hewlett-Packard Company was an American multinational information technology company headquartered in Palo Alto, California. It developed and provided a wide variety of hardware components as well as software and related services to consumers, small- and medium-sized businesses (SMBs) and large enterprises, including customers in the government, health and education sectors.

It was originally founded by William Redington Hewlett and David Packard. After graduating from college in 1935, the company was in a garage during the Great Depression. Originally, it produced a line of electronic test equipment. It grew to become the world’s leading PC manufacturer. From 2007 and 2013, it was the top PC manufacturer, post which Lenovo took its place. Major product lines included personal computing devices, enterprise and industry standard servers, related storage devices, networking products, software and a diverse range of printers and other imaging products.

In 2014, Hewlett-Packard announced plans to split the PC and printers business from its enterprise products and services business. The split closed on November 1, 2015, and resulted in two publicly traded companies: HP Inc. and Hewlett Packard Enterprise. In 2017, Hewlett Packard Enterprise spun-off its Enterprises Services division as DXC Technology and its Software division to Micro Focus

Meg Whitman is the current President and Chief Executive Officer of Hewlett Packard Enterprise. Earlier she has served as President and Chief Executive Officer of eBay. During Whitman's 10 years with the company, she oversaw its expansion from 30 employees and $4 million in annual revenue, to more than 15,000 employees and $8 billion in annual revenue. In 2011, she became CEO of Hewlett Packard.

Analysis

Hewlett Packard Enterprise Chief Executive Meg Whitman has announced that she will be stepping down early 2018. The company has confirmed that current President Antonio Neri will take on the role of CEO as of Feb. 1, 2018.

"Today, Hewlett Packard moves forward as four industry-leading companies that are each well positioned to win in their respective markets," Whitman said in a statement. "Now is the right time for Antonio and a new generation of leaders to take the reins of HPE. I have tremendous confidence that they will continue to build a great company that will thrive well into the future."

She added, “We have a much smaller, much nimbler, much more focused company.”

It was Whitman who oversaw the restructuring of Hewlett-Packard into two brands. She was also in-charge of spinning off other businesses and streamlining HPE to keep up with cloud-savvy competitors.

Earlier this year reports emerged that she was being seriously considered to become the next CEO of Uber. The job ultimately did not go to her. At the time, she denied that she wanted to HP stating, “I might be the only CEO in America who likes running something smaller than something bigger, because it gives me a chance to be in-depth with customers. I like a more nimble, agile company and I have no plans to leave HPE. ... It's hard to imagine another five [years] but listen, I am here for the foreseeable future, because there's still work to do."

Neri has been with the company since 1995, working his way up to the company's top ranks. "HPE is in a tremendous position to win, and we remain focused on executing our strategy, driving our innovation agenda, and delivering the next wave of shareholder value," he said in a statement.

Hewlett Packard has been performing above expectations in the recent years. In the most recent quarterly earnings that was reported, the company posted adjusted earnings of 31 cents per share on revenue of $7.87 billion for the fiscal fourth quarter. This was above analyst expectations.

Once the news became public, shares of HPE fell more than 6 percent in after-hours trading. Whitman will remain on the board and Neri will join it soon. Ilya Kundozerov, equity analyst with Morningstar. ”HPE is more focused and more agile than ever before. A CEO with tech background can help HPE to improve its innovative edge.”

Assessment

Our assessment is that Antonio Neri, who boasts a more technical background will be able to helm the operations of a more streamlined company. It is likely that Whitman, who is politically vocal, might have quit to pursue a political office. There is some speculation that she might be running in the Senatorial race in 2018. 

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