- HPE CEO Antonio Neri survived the Falklands War and thrived through a decade and a half of turbulence at Hewlett-Packard. He’s now facing a new challenge, after testing positive for COVID-19.
- The 53-year-old tech veteran is drawing lessons from those experiences to lead the iconic Silicon Valley giant to the post-pandemic future and a fast-changing market defined by the rise of the cloud.
- HPE has cut pay for executives including Neri itself, and is considering layoffs, as the pandemic takes its toll.
- “The coronavirus has changed the dynamic,” he told Business Insider last week, shortly before finding out about testing positive. HPE’s game plan is “to take advantage of a very unfortunate situation like coronavirus and double down and accelerate the execution of the strategy.”
- Neri points to the launch on Tuesday of Ezmeral, a new software brand, as a sign that HPE is establishing a firmer foothold for itself in the cloud market.
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A teenage passion for electronics led Antonio Neri, CEO of Hewlett Packard Enterprise, to a distinguished tech career and the top post at one of the most iconic companies in Silicon Valley.
It also led to a scary encounter with war and death.
Neri was 15 when the Falklands War erupted in 1982, working as an apprentice technician at an Argentinian base where he helped maintain combat vessels that saw action against the British. One of those vessels, the General Belgrano, was sunk by a British submarine, killing more than 300 crewmembers.
“It was a bit traumatic,” he told Business Insider. “It was an interesting experience but I would not recommend it to anyone.”
Neri says he still draws lessons from that experience in leading HPE, remembering the camaraderie he felt with people who were “looking out for each other,” and a “sense of community” that he says “I carry with me.”
Neri also draws lessons from the company’s history — HPE’s origin story begins at Hewlett-Packard, a legendary trailblazer in the tech industry.
Neri, a long-time veteran of the company, is now leading the company through a stormy period: It was already facing a steep challenge amid the rise of cloud computing, which hurts demand for traditional IT vendors like HPE.
That journey got rockier recently. HPE has reeled from the COVID-19 crisis which has forced the company to cut pay, including Neri’s, and to consider layoffs. For Neri, the pandemic also became personal. Last week, he disclosed that he’s tested positive for the novel coronavirus.
Euro technology Working through the coronavirus
Neri has vowed to keep working. On Tuesday, he’s expected to unveil new products, including a new HPE software brand, Ezmeral, a major move that the company hopes will give it more firepower in cloud computing, where it faces tough rivals adjusting to a rapidly changing tech landscape.
“The coronavirus has changed the dynamic,” he told Business Insider last week, in an interview held shortly before finding out about testing positive.
HPE’s game plan, he said, is “to take advantage of a very unfortunate situation like coronavirus and double down and accelerate the execution of the strategy…so when this crisis ends, you’re going to be positioned much better.”
Neri was speaking from experience. He’s a tech veteran who just marked his 25th anniversary as a Hewlett-Packard employee. When he was tapped to lead HPE two years ago, it was partly because of his long history with the company that made him the top candidate for the post.
“He has been through multiple wars,” HPE Chair Patricia Russo told Business Insider. “Even though he had not been a CEO prior, he’s a very seasoned executive and ran big parts of HP businesses through challenging times.”
Neri took over a company that was going through a challenging transition.
HPE was the product of the 2014 split of Hewlett-Packard, which also led to the creation of HP, the printer and PC company. Neri helped lead that split, together with Meg Whitman, who had served as HP’s CEO and who subsequently took on the same role at HPE.
Once HPE was off the ground, Whitman and the board began making plans for a succession. Russo said they decided early on that the company’s next CEO should come from within. Neri, who had served as HPE president, quickly became the top candidate.
“Antonio’s history with the company, the depth of his understanding of the technology, his commitment to people and culture were critically important if you think about what this company had been through,” she said.
Euro technology Reclaiming the HP Way
The company Neri was tapped to lead has been through a lot, and he personally has seen HP go through a rough transformation.
He joined in 1995 as a customer service engineer in Holland. The company was then led by CEO Lew Platt, another engineer and company veteran. Platt was the preeminent champion of the HP Way, the company’s beloved culture which encouraged employee-friendly workplaces, bold engineering innovation and open, freewheeling discussions between employees and managers. HP introduced practices that were later embraced by Silicon Valley and beyond, such as cubicles for both managers and staff, profit sharing, and flexible hours.
But critics also complained that the HP Way fostered a slow-moving, inefficient culture.
By the late 1990s, in the face of a more competitive and fast-changing tech landscape, the company had begun searching for a new strategy. To do this, it broke with a longtime company tradition by hiring an outsider, Carly Fiorina, who was named CEO in 1999.
What followed was the most turbulent decade and a half in HP’s history, under a series of outsider CEOs.
Fiorina led a controversial merger with PC manufacturer Compaq that led to a feud with the HP board and her ouster in 2005.
She was succeeded by the late Mark Hurd, under whom HP was accused of spying on journalists and some of its own employees. Hurd was also accused of sexually harassing a contractor which led him to step down in 2010. (The board subsequently found that there was no harassment, but they did find irregularities in his expense account reporting.) Hurd ultimately ended up as co-CEO of Oracle, a position he held until his death in October 2019.
After Hurd came Leo Apotheker, the former CEO of SAP, who lasted only 11 months and was known for a controversial $11 billion acquisition of the UK software company Autonomy which later led to fraud allegations.
Whitman, who had just joined the HP board in January 2011, took over as CEO that September, becoming the fourth outsider to lead the tech company in 12 years. She eventually led the push to split up HP.
Euro technology Why the HP split made sense
Neri told Business Insider that the split was a logical move for what had become a massive, slow moving behemoth that was struggling to compete on multiple fronts, from PCs and printers to servers and enterprise networks.
“At the time the company was a $115 billion dollar company with several lines of business and one of the challenges was we couldn’t maintain a competitive position in each of them,” he said. “Meg decided it was better to be more focused than being an IT supermarket.”
When he took over in 2018, Neri became the first insider and the first engineer in nearly two decades to hold the CEO title at HP — or at least the part of the Silicon Valley icon that competes in the enterprise arena.
Neri said he knew immediately what he needed to do: go back to Hewlett-Packard’s roots. “One thing I’m doubling down on is the culture of the company,” he said. “The culture of the company is everything. How we do things really matters.”
It certainly is critical in one area, he said: R&D. Once renowned for HP Labs and its heavy emphasis on research and development, HP had been criticized for drastically reducing R&D investments, particularly when Hurd was CEO. Dell and other rivals had made similar reductions in research at the time, as slimming profit margins in the PC industry let to cost-cutting at manufacturers like HP.
Neri, who had worked with Hurd, praised him as “a very strong leader,” but also said, “we did not invest as much as we should have had in in R&D. No question about it.”
Russo had raised the same issue when she joined the HP board in 2011, she said, noting that “it takes a long time to recover” from that underinvestment.
Neri said that problem became even more pronounced during the last Great Recession a decade ago when HP’s R&D spending dropped “dramatically.” It’s a mistake he’s determined not to repeat as HPE goes through another downturn.
Euro technology Focus on R&D
“When you have a crisis like this, you actually want to double down on innovation,” he said. “You make sure you invest even more in areas where you believe the demand will be, so when you come out of the crisis, you will be in a much stronger position.”
The renewed emphasis on R&D partly led to HPE’s news this week.
Ezmeral, the new software brand, is part of HPE’s bold bid for a more significant position in the cloud. That’s the fast-rising trend that let businesses set up networks on web-based platforms, making it possible to scale down or even abandon in-house data centers.
The trend is dominated by Amazon, Microsoft, Google and newer players that emerged from the cloud market, referred to as “cloud-native” firms. Neri calls Ezmeral “a true cloud native” enterprise software that he will go head to head with other cloud software powerhouses, led by Red Hat, Nutanix and VMware.
HPE is also pivoting sharply away from its traditional business of selling systems installed in in-house data centers to an “as-a-service” model. Still, he said, this shift will be based on HPE’s ability to innovate and build new technologies for the cloud era.
That’s something that Neri is confident about.
“We have one of the best portfolios on the planet, to be honest,” he said.
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