I'm not volunteering to kiss all of those toads to help either!<g>
Though I DO think you underrate a portion of those toads - what we call ASE's. They deliver the Criticial Systes Support consulting encompassing anything from security audits to H/A counseling. I cannot speak for CPQ expertise, but they must have SOME stemming from their clustering and Tandem stuff. Make no mistake, I am NOT referring to business process re-engineering though.
I still see value in that covert sales force. P&PF
Of course I am refering to the low margin, resource consuming tactical consulting business opportunity as the toad and and not the individuals.
I would say everything you have written about finding a few gems in the people, the supporting help they might provide and squeezing a few additional profit opportunities is all accurate. I never argued against these points.
Carly has told Wall Street and the key stockholders and public investors who doubt her ability to execute on the merger really secure the $2.5 billion in savings the this will HP's number one objective for the year 2002. She has said that this effort will be enormous and will require the entire new companies full attention (read major distraction from people's day job).
The major stockholders will be OK with this because of the implications to late 2002 earnings and early 2003 earnings but it scares the hell out of me. Ummm, execuse me. As the whole company pulls back fom what they are currently working on does not this merger come at the cost of: 1) basic daily execution 2) aggressively serving the customer 3) aggressively driving marketing and product plans 4) executive leadership and help with forming strategic partnerships that will help enable breakthrough growth 5) innovation 6) executives help to work through the details of tough issues required to close big deals 7) acquistions of the high margin opportunities HP has to find somewhere to be sucessful long term?
As HP executes this merger next year is it reasonable to assume the people will have the time to do more than half a years worth of true revenue generating business?
Some product lines will be impacted more than others but all product lines will take a hit. There have been a number of articles talking about how customer satisfaction and purchasing discions are wanning. Has anyone seen any good analyst estimates on how much market share HP is expected to lose in HP's major markets?
Has anyone seen any good analysis published that constrasts the financial benefits against the full spectrum of the costs of this merger? Is this inlcuded in Walter's or HP's recent SEC filings? I am leaning NO but still looking for better information.
P&PF and Rick,
You guys seem like rational supporters of the merger. Do you think the benefits of the merger outwieght all the costs and how so?
KAHP...I'm way behind here. Was just posting my reply to your original sequence when I see this new one from you.
I'm going to paint with the broad brush here. I may know some more details, but it would not be appropriate to comment on publicly. Actually, I don't know much at all. So consider all the following just speculation.
Ok..pretty clear that the 2.5B savings has to be a priority and it has to happen.
I don't think the distraction factor is quite as worrisome as you think. The basic product line, organizational structure, etc. will be set ahead of time and communicated very quickly. So very shortly after the closing, the troops will know what their roadmap is. Many of those roadmaps won't differ much from current. Little if any diversion from current direction and activity for most (and we got a kick ass roadmap in my org.). And unfortunately, in some cases the news will be that you ain't got no roadmap. That's reality and part of the pain of transformation.
I'm guessing that another big chunk of the 2.5B comes from purchasing power. If you save just 2% on $65B, that's 1.3B right there.
Yes, there is a revenue loss estimate in the filings. HP says 5% overall. The analyst average (as per Walter's selection of analysts) is 9.4%. Longer term, I think there is good chance of overall revenue gain over what HP or CPQ would have separately.
Both present compelling - but very opposing - arguments. It is a very interesting aspect of human nature how two groups can look at the same situation, filter the facts consciously and unconciously, and arrive at very different conclusions.
My take is that the benefits are worth the risk. And here's the big "kick me" sign on my back...the reason is my confidence in the managment team and my very talented and committed HP collegues and collegues-to-be from CPQ.