Meg Whitman: Hewlett Packard Enterprise getting smaller is a winning strategy

Hewlett Packard Enterprise CEO Meg Whitman, making a case for slimming down, told CNBC on Thursday that technology is moving at “lightning speed,” and the winning companies are going to be “the nimble, the fast, and the focused.”

Appearing on “Squawk on the Street” a day after announcing another shakeup, Whitman used a comparison to Dell to drive her point on being nimble.

Dell on Wednesday completed its $67 billion acquisition of EMC, forming the world’s largest privately controlled tech company.

“They are getting bigger. We’re getting smaller. They are leveraging up,” she said. “We delevered. We’re leaning in to new technology. They’re doubling down on old technology.”

HPE said Wednesday it plans to spin off its noncore software assets and merge them with Britain’s Micro Focus International in an $8.8 billion transaction. Micro Focus shares in London were surging about 17 percent.

“Our shareholders will have a chance to ride the upside. Our shareholders will own 50 percent of this new company.” Whitman said. “I’m a holder.”

Separately, HPE missed forecasts on quarterly revenue, but beat estimates on earnings and issued upbeat forward guidance. In early trading Thursday, HPE’s share price was down 1.5 percent but was up more than 40 percent this year.

Whitman blamed, in part, Britain’s June vote to leave the European Union. “We saw a slowdown in the U.K. after Brexit. It was like a bit of a pause. Now we’re starting to see the orders flow again.”

In a CNBC appearance in May, Whitman touted another company-slimming deal, an $8.5 billion spinoff of its enterprise services unit and merger with Computer Sciences.

The new overhaul marks another step in Whitman’s effort to transform the once-mighty technology conglomerate into a leaner, more efficient company.

Whitman said she expects $1.5 billion in cash from the CSC deal and $2.5 billion from the Micro Focus deal. “We now have a war chest … [to] make acquisitions in a very focused way.”

Whitman defines the Hewlett Packard Enterprise business in three areas:

“The tradition data center is under pressure, but it is still 85 percent of the spend. Our objective there is we have to gain share.

“Then there is a growing segment [of] what we call the software defined data center. … It’s used for private clouds.

“Then third, … Hewlett Packard Enterprise should own compute at the edge,” she said, which refers to connecting the so-called “internet of things.”

Last year, Whitman HP’s operations into two publicly traded companies, with Hewlett Packard Enterprise focusing on business technology products and HP Inc. concentrating on personal computers and printer operations.

— The Associated Press contributed to this report.

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