Hewlett-Packard can’t afford to let competition keep winning

Hewlett-Packard can’t afford to let competition keep winning

IBM’s Edge event hit Hewlett-Packard in Las Vegas with a one-two punch before the executives at HP Discover even got started.
These were more than the traditional shots pitting IBM solutions against
HP products, and HP likely won’t know how hard Big Blue hit it until
its reps talk to IT folks who attended both events.
EMC and Dell joined IBM in hosting events prior to HP. Each presented a
similar story, one driven by marketing, showcasing financial customer
benefits and largely playing down products, particularly hardware.
But IBM’s timing and approach appeared particularly well-planned, much
like a campaigning politician who anticipates a mistake an opponent had
repeatedly made. This is pertinent-HP CEO Meg Whitman has a political
background-but such skills were not evident in Las Vegas.

It Pays to Go First in a Debate

In any debate, there are advantages to going both first and second. Go
first and you can set a high bar. Go second and you enjoy the advantage
of foresight; if you’re talented and focused enough, you can tear your
opponent apart. Technology companies rarely execute quickly enough to
reap the benefits of going second. Steve Jobs was able to respond to a
Microsoft statement in near real-time, but he was the exception to the
rule.

It’s generally better to go first, then, because you can set the tone
and make whomever goes second look stupid. This happened in Las Vegas.
IBM said that pitching products was stupid, suggesting that companies
are interested in solutions that meet their needs, and then HP announced a ton of new products.

News: HP Ties Knot with Google, as Whitman Talks Up Customers

In addition, IBM engaged industry analysts, while HP didn’t invite many,
giving the impression that HP doesn’t think analysts are important and
forcing them to get secondhand news. Had HP invited the analysts and
monitored IBM Edge, it could have better responded to what IBM did and
positioned its offerings in a similar fashion. Instead, IBM trumped HP
through its use of customer testimonials.

IBM’s Tactical, Strategic One-Two Punch

Rather than have CEO Ginny Rometty outline IBM’s progress and bring
product managers on stage to pitch products, IBM divided the first two
days of keynotes into tactical and strategic discussion.
The tactical conversation included a number of customers who spoke about
how IBM helped them, more than any other vendor, exceed their
expectations. Often these folks were CEOs.
In each case, IBM, the third party and the customer sourced numbers
supported IBM’s claims that Big Blue could save IT managers money. IBM
ended the first day highlighting how it uses the same technology to
improve its own bottom line, with cost savings measured in billions of
dollars. Eating your own dog food is particularly powerful, as it shows
how the company values its own offerings. This hasn’t always been the
case at IBM.

IBM News: IBM Launches Watson Customer Service Smart Bot

The conversations about strategic initiatives, meanwhile, focused on the idea of taking IBM Watson to the next level.
  • For example, the Chief Medical Officer from WellPoint argues that, using Watson technology, he can save thousands of cancer patients,
    potentially including members of the IBM Edge audience, and halt the
    trend of medical costs doubling every five years in the United States.
  • A cybersecurity presentation then demonstrated how Watson could be
    used to analyze government security threats in real-time and mitigate
    those threats through a variety of physical and cyber responses from IBM
    and third parties. This, essentially, is applied artificial
    intelligence.
  • Finally, Pew Charitable Trusts
    showed how Watson, coupled with other IBM technologies, could reduce
    state and national election fraud and increase both the number of
    eligible voters and the ease with which they voted.
Each Watson use case has significant global implications that could
improve quality of life and prevent a variety of significant problems.

Meanwhile, HP Discovers It’s Overmatched

HP was overmatched because it didn’t see IBM’s move for what it was and
accordingly adjust its event to appear competitive. This is the second
time this year I’ve seen HP choose to ignore what IBM said to an
influential audience and, as a result, appear out of step. Marketing,
not individual product groups or the office of the CEO, drove the
message at IBM Edge. IBM came to Las Vegas to do battle, while HP came
to give executives face time. This was like bringing a knife to a gun
fight.
HP was simply overmatched-but even if the company stepped up, it’s not
clear HP is ready to play at this level. IBM’s turnaround has been more
than a decade in the making. HP is only two years into a five- to seven-year process,
one which former CEO Mark Hurd crippled by killing R&D projects
such as the HP Smartwatch and arriving late to the 3-D printing market.
IBM isn’t positioned to counter either move, but HP can’t capitalize.
HP has nothing that compares to Watson. Yes, HP’s Project Moonshot
is currently unmatched, but it’s not on the same level as Watson, which
IBM has cleverly positioned as a product that’s poised to save the
world.
Big Blue easily beat HP in Las Vegas, and HP needs to discover how to
make sure this doesn’t happen again. After all, if you aren’t going to
play to win, why bother to play?
Rob Enderle is president and principal analyst of the Enderle Group.
Previously, he was the Senior Research Fellow for Forrester Research
and the Giga Information Group. Prior to that he worked for IBM and held
positions in Internal Audit, Competitive Analysis, Marketing, Finance
and Security. Currently, Enderle writes on emerging technology, security
and Linux for a variety of publications and appears on national news TV
shows that include CNBC, FOX, Bloomberg and NPR.
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