HP Management on Deal Making
November 2, 2015
I love it when management wizards makes comments about management—at other companies. Navigate to “HP Enterprise’s Whitman Pans Dell’s EMC Purchase over Debt.” When you read this comment from HP’s top dog, keep in mind that HP bought DEC and Compaq and flubbed the revenue. Then HP bought Autonomy and wrote off $8 billion of the purchase price.
Here goes:
But, the reality is that we are two years ahead of the game and it will be difficult for others to catch up. First, let me give a little context. To pay back the interest on the $50 billion of debt that the new combined company will have on their balance sheet, Dell will need to pay roughly $2.5 billion a year in interest alone. That’s $2.5 billion that they will allocate away from R&D and other business critical activities, which will keep them from better serving their customers.
In case HP has forgotten, Amazon seems to be doing okay in the cloud market. What is the cost of the Autonomy acquisition? Hmm.
That’s HP.
Stephen E Arnold, November 2, 2015
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