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October 13, 2015

HP CEO rallies troops after Dell-EMC merger

News: Seize the moment while competitors are distracted staff told.

By Alexander Sword

Meg Whitman has reportedly derided Dell’s acquisition of EMC as a financial burden and a "good thing for Hewlett Packard Enterprise."

In an internal memo to HP Enterprise employees, Whitman claimed that the take-over provided "an opportunity for [HP] to seize the moment."

She wrote that Dell will be hampered by new costs, including around $2.5 billion in interest to service the $50 billion of debt that the combined company will owe.

"That’s $2.5 billion that they will allocate away from R&D and other business critical activities," Whitman wrote, "which will keep them from better serving their customers."

She also cited problems with the integration of the companies, stating that this will be a "massive undertaking and an enormous distraction for employees".

She claimed that bringing the product portfolios together will require product rationalisation, "which will be disruptive to their business and create confusion for their customers."

"Customers simply will not know if the products they are buying today from either company will be supported in 18 months."

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She wrote that this came "at the very moment when we have completed our journey to create two new, focused companies," imploring employees to "take advantage of this moment."

The disparity between the two strategies was noted by other corners of the industry as well.

Chris Dixon, General Partner at Andreessen Horowitz, the investment firm, tweeted:

"Someone please explain why HP is splitting up while Dell and EMC are merging despite the fact they are in exactly the same business."

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