Originally posted by Steven Burke on October 14, 2015 on crn.com
Hewlett Packard Enterprise Senior Vice President of Customer Advocacy Ramon Baez said Dell-EMC faces big deal distraction with HP ready to drive innovation at a breakneck pace as it splits in two effective Nov. 1.
[highlight type=”one”]”What I see is two major corporations coming together with two very different cultures,” Baez said, referring to Dell’s $67 billion acquisition of EMC. “It is going to be a huge distraction. It is going to take a lot to be able to do that [integration].” Baez made the comments in a one-on-one session with Bob Venero, the CEO of Holbrook, N.Y. based Future Tech Enterprise, before several hundred solution providers at The Best of Breed Conference in Orlando, Fla. The Dell-EMC deal strikes at the heart of the BoB conference theme: “Disrupt, Innovate & Grow — Innovating In A Time Of Chaos.”[/highlight]
The $2.5 billion that Dell is going to have to pay to service the $50 billion in debt is going to cause a direct hit to the company’s ability to innovate, charged Baez. That is cash being taken away from critical research and development, he said.
Dell’s decision to bulk up with an unwieldy acquisition comes one year after Hewlett-Packard decided to split into two new Fortune 50 companies, Hewlett Packard Enterprise, and HP Inc., in order to move faster to better serve customers and HP partners.
“The way I look at it is [HP CEO] Meg [Whitman] and the board saw it right,” said Baez. “We really needed to separate. We needed to do this in order to be able to compete in this [fast-paced IT] environment so we could be focused on the enterprise and commercial and consumer and the way we do innovation and the way we focus on our partners and our clients across the board.”
Baez said he couldn’t be happier with the Hewlett Packard Enterpise scenario versus Dell-EMC in a business outcome-driven IT market. “I am so glad we are on this end of our separation,” he said. “Our innovation engine is moving smoothly. It’s unbelievable. We are so different than we were four years ago.”
HP’s split into two $55 billion companies with Hewlett Packard Enterprise focused on the corporate IT market, and HP Inc. focused on the PC and printer market represents one of the largest splits of IT systems in corporate history.
Baez, who was senior vice president and global CIO before taking the customer advocacy post, said many customers and partners were skeptical that HP could make the split without experiencing major IT issues. The response from a number of executives who had been involved in mega-splits in the past, said Baez, was: “You guys are out of your mind if you think you are going to be done by Nov. 1.”
HP pulled it off with a formal IT split as of Aug. 1 in line with government regulations on the split, which involved reducing more than 2,700 applications to about 2,500 along with six data centers moving to four data centers. “We had over 1,600 entities that we had to deal with,” he said. “If you are in IT, you know what it takes to do that from a financial perspective is massive. We operationally split the company without a blip. None of our customers knew.”
In fact, Baez said he recently met with 20 top global CIOs who couldn’t believe the company had pulled off the split without an impact on their companies. Solution providers commended Baez and the rest of the HP IT team for separating into two companies IT systems without an impact on the IT partner supply chain.
“HP went through the transition with barely a blip to us,” said Kelly Ireland, founder and CEO of Orange, Calif.-based CB Technologies, an HP Platinum partner.
Felise Katz, the CEO of PKA Technologies, Suffern, New York, for her part, said HP CEO Meg Whitman’s decision to put Baez into a customer advocacy role interacting with partners and customers is paying off in sales gains for the channel.
“It is epic,” said Katz. “That is a stellar move. He is a great advocate for business leader. There is nobody better to do that job than Ramon.”