Meg Whitman Details Lay...

Confirming rumors from last week, HP just publicly announced a layoff plan that will result in a reduction of 8% of its workforce. Shortly after releasing the memo to Wall Street, HP CEO Meg Whitman sent a company-wide video message explaining the future of Bill Hewlett and David Packard’s company. She acknowledges throughout that HP is in trouble, stating in the beginning, “HP’s performance is still not where it needs to be” and “We have a lot of work ahead of us to get HP back on track.” She also explains, a bit comically and perhaps erroneously, that “[HP] is currently rebuilding credibility one quarter at time, and to do that, we need to consistently deliver on what we say.” Whitman also reaffirmed HP’s commitment to infrastructure, PCs and printing, servers, storage and networking. “This is a differentiating strength for HP and one we can be proud of,” she said in the video. However, the axe is about to fall throughout HP. Before Whitman attempts to justify the cuts, she explains that HP’s employee count has grown at a pace unsustainable by its low revenue as of late. “We’re struggling under our own weight,” said Whitman in today’s internal video memo. “And we’ve got to restore a healthy balance in order to return HP to its position as a growing… thriving… innovating… industry leader. That’s what this is all about. And the workforce reduction is only one piece of a comprehensive effort. We see a lot of opportunity to remove complexity, streamline and reduce costs in a number of areas across HP.” Like previous rumors speculated, HP plans on reinvesting the savings into the company. “We’ll be investing to drive leadership in the three strategic pillars – cloud, security and information optimization. And in each of our businesses, we’ll make investments to stay ahead of customer expectations and market trends.” This is a fresh move for HP who under previous leadership simply used the savings of a smaller company to help the ledger. In the consumer-focused PC and Printing Group, “we’ll be focused on design, engineering, quality, and generating demand and desire with our customers,” she said. In Enterprise Servers, Storage and Networking (ESSN) “we’ll invest to drive R&D and innovation in our core businesses of servers, storage and networking. In Software, we’ll be investing to speed development across Security, Information and Management Infrastructure for both on-premise IT and in the cloud – with a key focus on software-as-a-service offerings. This will include the extension of Vertica and Autonomy across our entire portfolio. And in Services, we’ll improve processes and build-out capabilities in cloud, security and information. We’ll also be strengthening our industry practices, as well as our service quality and innovation.” Whitman also detailed that HP is looking to better train their employees while providing a “career development and better tools and support.” Like most leaders, Whitman ends the video with a reminder to her underlings that “In times of change, it’s easy to lose focus, waiting to see what happens next. We can’t let that happen. This a great organization, full of incredible people who are resilient, committed and who care about our customers and our company. I’m asking all of you to please keep driving forward. Close every deal. Leave nothing on the table. We need that now more than ever.” Below is a transcript of the video. We are currently working on obtaining the video itself. Hi. Today HP announced second quarter results, and once again, we delivered on what we said we would do. Our publicly-stated guidance for non-GAAP diluted earnings per share was 88 to 91 cents. And we delivered 98 cents, beating our outlook by 7 cents a share on revenues of $30.7 billion. I thank all of you for your hard work and dedication. This is a journey. We’re rebuilding credibility one quarter at time, and to do that, we need to consistently deliver on what we say. You are at the heart of our results. Without your efforts, HP cannot thrive. But HP’s performance is still not where it needs to be. Our business is still declining. Year-over-year, non-GAAP EPS was down 21 percent and revenues were down 3 percent. We have a lot of work ahead of us to get HP back on track and that begins with executing against the strategy we’ve talked about in recent months. Our foundation is infrastructure, PCs and printing, servers, storage and networking. This is a differentiating strength for HP and one we can be proud of. HP Software extends and strengthens that foundation, solving customer challenges like managing, securing and automating the information flow across the data center. Services makes it all work together for the customer, ensuring their technology is meeting their needs. And finally, we combine our infrastructure, software and services into comprehensive solutions that deliver enormous customer value. Moving forward we’re aligning our powerful collection of assets to capture leadership in three strategic areas: Cloud, security, and information optimization. But to do this we must invest and we cannot afford to wait. As we discussed in Q1, our costs are expanding while our revenues decline, and this has been happening for too long. The strategic realignment we announced last quarter was a good first step in addressing this problem by beginning the process of removing complexity, simplifying our operations, and reducing costs. And today we’re taking the next step in this journey with the announcement of a multi-year restructuring that will touch every part of HP and create a more streamlined company. We’re taking a pre-tax charge of approximately $1.7 billion to be included in our FY12 GAAP results, as well as a further multi-year pre-tax charge of $1.8 billion. By the end of 2014, we expect to reduce the workforce by 27,000 positions through a combination of layoffs and early retirement. And we expect to generate run-rate cost savings of approximately $3 to 3.5 billion. These are difficult actions. Workforce reductions aren’t easy and we don’t take them lightly. They adversely impact people’s lives and are tough on the company, our culture and you. We’re trying our best to mitigate the impact as much as we can. We’ve limited hiring to try and reduce the number of people affected. For those positions we have open, we’re giving top consideration to internal candidates. We’re offering an upgraded early retirement package in the US, and expanding our career transition and planning services to better support employees. I know HP has been through a lot in recent years and this is another dose of change. But in this case, it’s absolutely essential for the long-term health of our company. Let me share a little perspective. At the end of 2009, we reported a workforce of about 304,000. At the end of 2010, we had almost 325,000 employees and at the end 2011, that number had ballooned to nearly 350,000. Over that same period, we saw year-over-year revenue growth of 10 percent in 2010, of 1 percent in 2011… and so far in 2012, revenues have been declining. We’re struggling under our own weight. And we’ve got to restore a healthy balance in order to return HP to its position as a growing… thriving… innovating… industry leader. That’s what this is all about. And the workforce reduction is only one piece of a comprehensive effort. We see a lot of opportunity to remove complexity, streamline and reduce costs in a number of areas across HP. I know that many of you remember the cost reduction of years past, like data center consolidation and centralizing functions such as HR, Legal, Finance and IT. What we’re doing now is different. We’re going after the big cost buckets and fundamental business process reengineering. This includes optimizing the supply chain, reducing the number of SKUs and platforms, continuing to hone our real estate strategy, simplifying our go-to-market, improving business processes, and implementing consistent pricing and promotions to drive end-user demand profitably. It’s harder work with greater potential payoff. Another difference from years past is what we plan to do with the savings. The majority of savings this time around will be invested in the business. We’ll be investing to drive leadership in the three strategic pillars – cloud, security and information optimization. And in each of our businesses, we’ll make investments to stay ahead of customer expectations and market trends. In our PC and Printing businesses, we’ll be focused on design, engineering, quality, and generating demand and desire with our customers. In ESSN, we’ll invest to drive R&D and innovation in our core businesses of servers, storage and networking. Together they create a converged infrastructure that is the foundation for top customer initiatives such as cloud, big data analytics and social media. In Software, we’ll be investing to speed development across Security, Information and Management Infrastructure for both on-premise IT and in the cloud – with a key focus on software-as-a-service offerings. This will include the extension of Vertica and Autonomy across our entire portfolio. And in Services, we’ll improve processes and build-out capabilities in cloud, security and information. We’ll also be strengthening our industry practices, as well as our service quality and innovation. Additionally, we’ll invest in our people – in better training, better career development and better tools and support. In times of change, it’s easy to lose focus, waiting to see what happens next. We can’t let that happen. This a great organization, full of incredible people who are resilient, committed and who care about our customers and our company. I’m asking all of you to please keep driving forward. Close every deal. Leave nothing on the table. We need that now more than ever. I’m confident in the decisions we’ve made and the direction we’re going. Together, we will define the future of HP and of our industry. We’ll be holding our next all employee broadcast on June 18th and I look forward to speaking with you then and answering your questions. Thank you.

KPCB’s Chi-Hua Chien: T...

Technology has helped to level the playing field across a wide range of industries, letting more individuals come to the table in fields such as publishing, entertainment and, of course, building web startups. And according to Kleiner Perkins Caulfield and Byers partner Chi-Hua Chien , the next space ripe for a big tech-powered wave of democratization is commerce. In an on-stage conversation with David Kirkpatrick at the TechCrunch NYC Disrupt conference Wednesday afternoon, Chien explained how tech has helped flatten a number of previously stratified spaces. The mid- to late-90′s saw the democratization of information — companies such as Google made data available to everyone, no matter where or who they were. After that came the democratization of distribution, with services such as Twitter and Facebook allowing anyone to broadcast their content and potentially attract an audience. The democratization of computing has occurred as well, with billions of people in the world now having access to computers because of the availability of low-cost mobile devices. Up next? The world of shopping and selling. “We’re now entering an era around the democratization of commerce,” Chien said. The past, he said, has been about “mass aggregation,” with companies such as Safeway and Wal-Mart rising to the top of the commerce space by simply being the best at aggregating a suite of products into one space. These big companies also built up their own brand names to make shoppers feel secure in buying things from them. Today, though, we are starting to “see an unwinding of aggregation of commerce as technology starts to disrupt” the industry, Chien said. “If you think about what a Wal-Mart does, it aggregates credibility and inventory,” Chien said. Credibility is the Wal-Mart brand name, and the inventory is simply products and storage. Today, credibility can be established by smaller players via social media, and real estate and inventory can be outsourced much easier. Chien pointed to two Kleiner Perkins portfolio companies to illustrate this movement: Square , which he said is democratizing becoming a merchant, and Zaarly for democratizing the ability to do a particular job. In a short conversation off-stage, he told me that Gumroad is also one of the Kleiner-backed startups that is leading the way toward big commerce disruption. Looking at Kleiner Perkins itself, Chien not surprisingly declined from discussing the lawsuit filed by investment partner Ellen Pao (the news of which TechCrunch was the first to break yesterday) during his fireside chat. But, he did shed some light on the firm’s larger strategy, in particular its increasing focus on making digital investments, after a few years of being more well-known for making moves in the green tech space. “In the last five years, [Kleiner has] added four investing partners focusing on consumer digital,” Chien said.

Amazon Partners With Pa...

Amazon is continuing to grow its collection of streaming video titles at Amazon Prime Instant Video, and is today announcing another new agreement with Paramount Pictures bringing “hundreds” of new movies to the service. This deal isn’t as large as March’s partnership with Discovery , which saw some 3,000 new titles added, but it does introduce what are arguably more big-name movies. Included in the deal are titles like  Mission: Impossible 3, Braveheart, Forrest Gump, Mean Girls, Nacho Libre and Clueless , to name a few, and Amazon says more will be added “soon.” With the new deal in place, Amazon Instant Video now offers over 17,000 movies and TV episodes for unlimited streaming by Amazon Prime customers who can watch online or on their Amazon Kindle Fire. For what it’s worth, “17,000+” is the same number that Amazon was touting earlier this year, so the increase via the Paramount deal didn’t include enough of a selection to warrant a new “milestone” announcement on the company’s part. Prior to the Discovery deal, Amazon  signed a similar deal with Viacom in February , which then brought the number of titles up to 15,000. And in December,  the count was 13,000 . So yes, the service is growing, and relatively quickly. Other popular movies you’ll know from Paramount which are now online include  Star Trek, Breakfast at Tiffany’s, Top Gun, The Italian Job, and The Truman Show. In total, the service offers 120,000 titles which Amazon Prime customers can either rent or buy. The videos will be available at no extra charge to Amazon Prime customers who pay the $79/year for the service, which also includes free two-day shipping and access to the Kindle Lending Library.

Airtime Acquires Former...

We’ve discovered that Airtime , the video startup founded by famed Napster alums Shawn Fanning and Sean Parker, has allegedly made its first acquisition — before truly exiting stealth mode. The target? Erly , the Kleiner Perkins-backed startup aimed at letting people create social experiences around their experiences. Update: We’ve confirmed the acquisition with a source at Airtime, and have been told that it will be announced along with a new $25 million round of funding led by Kleiner Perkins, including Andreessen Horowitz, Google Ventures. As part of the new round of funding, Kleiner Perkins partner Bing Gordon will be joining Airtime’s board of directors as part of the new funding. Update 2 : The news has now been added to Airtime’s company blog , but at press time their entry does not include details on the size of the funding round. It seems like an interesting fit at first, but as soon as you scratch the surface it all comes together. Erly’s founder and CEO is Eric Feng , a super sharp young industry vet who previously served as the Chief Technical Officer at Hulu. He alone clearly brings a lot of video and managerial experience to the table. What he’s built at Erly is still very early stage (ha, ha) but from what we’ve seen it’s a solid product. LinkedIn says that the company has around 10 employees. Airtime, which is set to launch on June 5th, has taken its time to work on building something big. It would make sense that they’d want to bring together a rockstar team to make the most out of that crucial post-launch period. Of course Fanning, and especially Parker, have attained rock star status of sorts in this industry and beyond — which comes with a very unique set of expectations. Bringing on the likes of Feng and his team is a savvy move, for sure.

Netflix Co-founder Join...

Getable , the artist formerly known as Rentcycle, started out with a mission to bring the rental industry online, offering free, realtime reservations for consumers along with business management tools for local rental shops. It’s an ambitious goal, and one that found almost immediate support from investors . However, in tackling such a big obstacle, the startup quickly learned that it would need to go deeper, so in March, it re-branded as Getable, rebuilt its website, and took a page from OpenTable’s book, launching a more robust in-store rental management solution for local shops. In so doing, Getable made its cloud-management tools available to businesses through both web and iPad apps, allowing businesses to organize inventory data, customer information, payments, view analytics, while managing in-store reservations through the same system they use for online reservations. Like Square meets OpenTable for the whole rental industry. The OpenTable influence in Getable’s solutions for the rental industry is no accident. As part of its seed funding back in August , OpenTable Founder Chuck Templeton joined the startup’s board of directors. In turn, Getable co-founder and CEO Tim Hyer also struck up a relationship with Jeff Jordan, the former chief exec at OpenTable and current partner at Andreessen Horowitz, and both Jordan and Templeton have since, to varying degrees, helped to shape the startup’s approach to the market. And, while it’s certainly a steep hill to climb, that market is a big one, as rentals collectively represent an $85 billion industry. Unsurprisingly, Templeton and Jordan are not alone in seeing both a huge market opportunity and big potential for Getable’s business model. That’s why the startup is today announcing that Marc Randolph , the co-founder and visionary behind Netflix will be joining Templeton and Collaborative Fund Founder Craig Shapiro on the startup’s board of directors. Obviously, this will not be Randolph’s first experience with online rental platforms, having been at least partially responsible for the video rental industry moving online, much to Blockbuster’s chagrin. He also currently serves on the board of BookRenter.com and has invested in P2P car rental marketplace, Getaround. “The idea of shared access is a concept I first embraced at Netflix,” Randolph said in a statement. “I’ve since had the chance to deepen this commitment through my involvement with Getaround, BookRenter, and Quintess. Getable brings the same kind of access to consumer products, everything from tuxedos and power tools to sporting goods. Moving a traditionally offline industry online is always an exciting challenge.” If payment systems are played correctly and find the right fit for the type of business they serve, they can have the potential to completely alter the customer experience at that local store, including the entire flow of business on the floor. But it’s not easy introducing small merchants, who are used to their offline systems, to a new model. It requires them having to put their entire store, including the way it operates, and flows, in the hands of a new system and technology — in this case, Getable. It’s for this reason that the startup has cleverly decided to focus on a particular geography and a particular vertical. In conjunction with Randolph joining its board, Getable is announcing its first official vertical focus: Bike rental. Like so many others, the majority of bike shops still organize their rental reservations with pencil and paper. And considering Hyer estimates that 2,500 bikes are rented per day to tourists in San Francisco, Getable is focusing its efforts at home, forging partnerships with top bike rental chains like Blazing Saddles, Bay City Bike and Big Swingin’ Cycles, all of which will be using Getable’s tech to run their store operations. Since rolling out its in-store solution last month, Getable has already received commitments from businesses representing more than 50% of all bike rental volume in San Francisco. And with some veteran leadership experience on its board, Getable will be looking to accelerate expand its reach to an even greater extent in the coming weeks. OpenTable and Netflix have both followed extremely successful trajectories in their push to digitize rental services, so you can’t ask for much more than to have their founders in your corner. For more on Getable, check ‘em out at home here.