Hewlett-Packard's (HPQ) Management Presents at Citi 2014 Global Technology Conference (Transcript)

Sep. 2.14 | About: HP Inc. (HPQ)

Hewlett-Packard Company (NYSE:HPQ)

Citi 2014 Global Technology Conference

September 2, 2014 3:30 p.m. ET

Executives

Martin Fink - EVP and Chief Technology Officer

Analysts

Jim Suva - Citi Investment Research

Jim Suva - Citi Investment Research

When it is time for questions, we do ask that you wait for the microphone to come to you so others in the room can hear you as well as those on the webcast. Martin, thank you so much for joining us. Before I sit with you on the stage, I would like to kick it off with a question as then I walk over to join you. And maybe you can warm up the audience by talking a little bit about what you are responsible for and your allocation of resources among your various developments and responsibilities at HP as not everyone in the room may be familiar with your role.

Martin Fink

Sure. Thanks, Jim, and welcome everyone and thank you for having me here this afternoon. As Jim said, I am the Chief Technology Officer of the company and I have a variety of different responsibilities. The one thing I am responsible for is HP Labs, our advanced research lab. And something that is not necessarily well understood by those who sort of don't live and breathe this every day, is the difference between the advanced research that we do and the product development that we do. So most of you as investors are familiar that we have, for example, our enterprise group for server, storage, networking and converged systems. We have our printing and personal systems where we do commercial and consumer PCs, we do our printing and so on and so forth.

Those groups have very large product development teams. And typically those product development teams work on the current product roadmap and then look out perhaps anywhere from six months to 2.5-3 years. The advanced research group which I lead is responsible for advanced basic science and looking further out in time, in some cases 5, 10, 15 or even 20 years. One of the technologies as an example, you have heard a lot of -- you have heard us talk a lot about, is memristor technology. And just to give you a sense, memristor research started in 1996. We did the discovery in 2008. We have reached viability in 2013 and will likely hit product, give or take, we will call it 2018. So that's a good example of where research can, say 20 years, before it gets to product development.

I am also responsible for our cloud business unit. And so all things related to our public/private managed cloud, I take a pan-HP view of and a lot of the teams as part of that report to me. But we also have a lot of our cloud resources spread throughout the company as well as cloud is sort of a technology and a market thing that's occurring and impacting all of our businesses. I am responsible for something called NFV or Network Function Virtualization. So if you do any research in the telecommunication space, one of the things that you might want to be aware of is that the disruption that you have seen in IT and the IT industry being significantly impacted by cloud. A similar disruption or an analog is occurring with the telecommunications industry. It is going through a similar transformation and that one is called NFV. And so I take responsibility for that too as part of the overall role for the CTO. So that's a quick summary of various group areas.

Jim Suva - Citi Investment Research

Well, thanks so much, Martin. You had mentioned the word cloud, which has been very topical today. Since you are in charge of that, maybe just to remind investors that in May I believe it is HP announced a product called Helion. Can you maybe talk a little bit about what this product offering is and how it compares against the other product offerings out there in this space? Private, public and the other competitive hyper-scale companies such as AWS that we are typically used to hearing about.

Martin Fink

Right. Sure. That’s actually a good question. One of the things that we deal with in cloud, for the uninitiated, is a perception that cloud is somehow equivalent to either Amazon, Google, AWS et cetera. So in other words, it's a public cloud company. And the public cloud companies essentially have that one singular offering where you take your enterprise and move it to their data centers and run it on their premises and you move everything from CapEx to OpEx.

The reality is that the vast majority of enterprises, less than 5% of their workloads have moved to that type of an environment. And what the enterprise customers are looking for is all of this properties associated with cloud where you get the self-service, you get the automated infrastructure, you get the virtualization. You get something called dev-ops, I can give you more on that if you want, and those capabilities. But you have a little bit more control over your environment by having it on premises or managed for you on our premises but under tight security control. There are absolutely workloads that those enterprises want to move to a public cloud and typically things like development and operations.

So to answer your question around what did we do with Helion, what we did with Helion was essentially provide a common technology platform so that the customers could have their workloads in any one of those delivery vehicle. So if they wanted to have their -- start their workload, like I said, development and tests on a public cloud, we provide that public cloud and they can do that. And then the data they have gone through, all of the testing and they say, I'm ready to go to production but I want to be able to have that production inside of my premises. They can push a button and that workload will show up on their premises.

And then in some cases they might not have a particular geographic location and they want to leverage HP's global presence and our data centers around the world and therefore be able to locate that workload anywhere around the world. You may or may not be aware that the idea of data privacy, data locality, data sovereignty are critical topics in many geographies around the world. And our ability to be able to locate your workload and therefore your data and still comply to all of those rules and regulations that different governments and agencies have around the world, is actually significant for our customers.

And then what we launched at Discover as a companion to that, is something called a Helion network. And the Helion network says, hey, even us with our might and our scale, actually to cover the whole of planet Earth and every geography and every workload type is unrealistic. So we said, let's bring all of our partners along with us for the ride. And so now what happens is service providers around the world can again use the same identical common technology platform. Be able to leverage that, to be able to host workloads.

So if you're in Hong Kong and you say I am a service provider and I would like to be able to house customer workloads but I also want to have an international presence by being part of the Helion network, you know you can offer that to your customer and your customer can have that workload mobility and compatibility around the word. So in summary that brings together a lot of what we have delivered with Helion.

Jim Suva - Citi Investment Research

And then also I was at HP Discover, you also announced what was called The Machine. And I've been marketing and talking with investors and talking about The Machine. A lot of people struggle to grasp exactly what it is, what the challenge is that you are trying to solve with this. So can you walk people through The Machine. What it is, the challenges that you address and the commerciability timeline of it.

Martin Fink

So it's a great question. The Machine is a great example of what research looks like and we're doing something different here and I will tell you why, which is we are making research public far sooner than we normally would have. And there is a few reasons for that. So let me start with the emphasis for The Machine. I think it's no secret to anyone that the amount of data that our world creates continues unabated. We are dealing with a massive onslaught of data and as we get to Internet of Things, machine to machine types of communication, the amount of data created is going to continue to exponentially grow.

However, if you look at the current technologies available out there, whether it's the memory, flash or rotating media, the ability for those technologies to absorb that amount of information in such a way that we can extract usefulness side of it, is suspect and actually we believe will hit a wall in the next number of years. So somewhere between that 2017 to 2020 timeframe. In order to solve that, we as I mentioned earlier, are working on a technology known as memristor which allows us to achieve extreme scale and be able to deliver huge amounts of data in a reasonable amount of physical space and also in a reasonable level of power consumption. So the amount of energy required to house all of the data using current technology will also hit a limit. So we needed a new technology to do that.

And so The Machine is about significantly increasing our ability to continue to gather the exabytes and exabytes of data that we're going to continue to generate with things like Internet of Things and then be able to use other technologies such as something called photonics, where we use light instead of copper wires to move the information around. Two things happen with that. One is, we can move the information around much much faster and at much greater volume. And the second thing is we can do it on an energy profile which is thousands of times less than using copper energy or copper connections in order to do that.

And so when we brought all that together the reason we ended up going public with The Machine, is we realized that the current operating system such as Linux and Windows and others were actually not suited to this new layer of technology that we would need to fully leverage this technology. It's not that they won't work but to fully leverage the technology we would need a new operating system. And in order to do that, we wanted to be able to use an open source methodology to do that and work with universities around the world in order to leverage all the brainpower there. And that was actually the element that forced us to go public with The Machine.

So we kind of have this little tagline to remember. So electrons compute, photons communicate, the photons is light, and ions store. And that's the memristor. And the idea behind The Machine is be able to compute vast, vast, vast amounts of data. Doing it much faster and doing it with significantly less energy. And what we announced at Discover, with six times the performance at 80 times less energy for the workload. So that's a summary of The Machine. And one other critical point, because one of the things that we talked about as we said 70% of our research is actually tied to The Machine and somebody said, well, wow, that’s a pretty big bet. What if it doesn't work? The beauty of The Machine is it's also a collection of technologies. And I kind of give you a sample of some of these.

And the idea does not just is, it's not just one big thing. Because we have the ability to deliver a set of companion technologies over time, we are already even today seeing benefits to The Machine by some of the work that we're doing in our product business unit.

Jim Suva - Citi Investment Research

And timeline for commerciability of The Machine? When can I buy one for my house?

Martin Fink

So we've -- research is high-risk. What we communicated was by the end of the decade is when we would like to get there. Our internal timelines are a little bit more aggressive than that but because we are dealing with research, we are dealing with higher risk, we gave ourselves until the end of the decade to get to there.

Jim Suva - Citi Investment Research

Maybe talking about something a little more commerciable out there in the market is -- it's been about, if I am right, about three years since you launched the product Moonshot. And it saved a lot of energy and had a lot of interest in it. Can you update us on the project Moonshot? How it's going? How big of an adjustable market you think it is and any challenges that you have seen may have impacted adoption?

Martin Fink

Sure. The Moonshot is actually a great example of something that represents technology on a path to The Machine. Because as I said, a big part of The Machine is being able to deal with the energy being used. It used to be in the IT industry, performance was paramount, right. The more performance you could buy, the better off you were. And now what happens is there is this equation known as performance per watt. So the amount of energy that's used for that performance you get. And what's been changing and what Moonshot has enabled, is rather than look at general purpose processing where you have one single type of processor that tries to deliver against all of your workload, what we want to do is you specialize the processor so that we only consume the amount of power or the amount of energy and the performance that we need specific to that workload. And by specializing the world, then we have the ability to deliver much more compute power and doing it at a significantly lower energy envelope.

And so Moonshot was our first experiment and our first product on the trajectory to go do that and the reception has been tremendous. We are, over the past three years we have been gradually releasing new cartridges which is those specialized processing units. Our first ones have been focused on static web serving which is what we use to run hp.com. So if you think about the scope, size, scale of hp.com that actually all runs on Moonshot. And in this fall we are going to make a transition to the next generation of cartridges which I think will continue to amplify the amount of business and the amount of workloads that we can run on Moonshot.

Jim Suva - Citi Investment Research

Martin, switching gears a little bit to 3-D printing. A lots going on in that the space, a lot of technology advancement, a lot of innovation, a lot of go to market strategies, a lot of challenges with distribution. Is it a razor or razor blade model? How is the software and ecosystem going to involve? HP is very strong in printing and your HP Labs, I believe, 3-D printing if I'm correct falls under your umbrella, if I'm correct. Can you let us know a little bit about the status for 3-D printing? At Christmas time will I be able to buy one of these under my Christmas tree or is this something where the ecosystem you are still working on? Because I remind investors, HP has been in the 3-D printing market in the past and then withdrew. What's different now, what timeline and what are you looking for the first strategy?

Martin Fink

Okay. So this is great because I know there is a lot of interest around 3-D printing, so let's go through a few things. So one is, 3-D printing is a great example of a collaboration between HP Labs and our product business unit. So we are actually tied at the hip. We have a product business unit largely based in Barcelona, Spain, that is working hand in hand with the HP Labs unit in order to do our 3-D printing development. We are planning some technology announcements related to 3-D printing a little bit later this year. But it's probably useful to help people understand the state of the market and why we are taking the approach that we're taking.

So the first thing is, there is a tremendous amount of hype, especially in the area of consumer 3-D print. So whenever you look at the news and you see news article, you will see examples of consumer application through 3-D print. And one of my favorite ones I have to tell you, there was a television news program I saw where a female reporter was talking about the wonderful advances of 3-D printing and one of the things that she showed was a pair of red [pumps] (ph) that were 3-D printed. The problem is she never actually tried to put them on and I am pretty sure that if she tried, they would have crumbled as she tried to do that. And so this is where we sometimes get that disconnect between reality and the practical application versus the hype.

So there are a number of technology problems associated with 3-D printing. One is the quality of the part. So the pump that fall apart under any kind of pressure. The second thing is the time to part. So one of the things whenever you see news, you see articles, you see marketing, any of those thing. One of the things that they will never actually show you is, how long will it take to print a part. And just think of anything whether it's a glass, a pot, a lunchbox, or something like that, set your mind to it takes about 30-plus hours to print even the most simple and basic thing. So the problem we run into is the word print has this notion of like a laser printer where the sheets come out at rates of 70 pages a minute or something like that, where a 3-D printed part is literally more than a day. And it's probably more entertaining to watch paint dry then to watch a 3-D part being printed. Okay.

So the quality of the part is another thing and associated with that is that resiliency of the part. So the approach that we are taking is to actually deliver technology in order to address the issue of the speed to part and the quality of the part and the resiliency of the part. And those are some of the elements of the technology that we will be announcing a little bit later this year. We have products to follow at some point after that and that will all be part of our announcements later this year. Now let's segment the market a little bit. Because, again, the hype associated with 3-D print is very consumer centric.

So today the worldwide, and I mean worldwide, market for 3-D print in the consumer space is about $30 million, best case. All right. So it is not a very large market and it's actually not that interesting. The market that is the most interesting to us is commercial applications for commercial markets, things like print service providers and things like that. So we are very much looking for more commercial type applications as opposed to consumer type applications which we are think are somewhat few and far between once the novelty wears off.

Now there are much higher end applications for which there are solutions available today. But those are millions of dollars types of applications and types of devices. So I think if everybody just hangs tight until a little bit later this fall, you will get a pretty good handle for the technology we are delivering. The value of that technology along that continuum of real issues we are talking about. You will get a good sense of the markets that we are going after, the size of those markets and why the economics make sense. And then the other one is, you were asking about how does this sort of business model work around? Is it a print razorblade model, those kinds of things. We will talk a bit more about those things when we talk about this technology that's available.

And just to kind of make the point today, if you kind of think of a MakerBot, which is a typical, consumer oriented device, that razor blade model doesn't work all that well because all of the supplies are commodity supplies, they are not value-added supplies.

Jim Suva - Citi Investment Research

And what's changed today versus years ago when you went to market in 3-D printing?

Martin Fink

So when we first entered 3-D printing was with our relationship that we did and we did an OEM agreement. And that we actually wanted to test and understand the market. One of the things, 3-D printing is very different than actual ink printing or laser printing. Which is obviously as you point out, we are the 8000 pound gorilla in. And we wanted to spend some time to truly understand what that market looks like, what the market segments are, where the business opportunities are and the best way for us to get informed about how this really works. Who the buyer is, what they value, what's the most important thing to them, is to participate and be part of that market. And so we did that in order to get that understanding. And now what we want to do and what's different is we want to bring HP intellectual property, HP technology to the market that will be highly differentiated.

Jim Suva - Citi Investment Research

Great. It's now time for investor questions and answers. We do ask that you please raise your hand so the microphone can circulate itself to you as this is being webcast and so everybody can hear your question in the room. So if there is any questions, if you could please raise your hand? There is a question here in the middle of the room.

Question-and-Answer Session

Unidentified Participant

I wanted to stay with the 3-D printing for a second. Other than printing, word printing, what's so common? Why should HP be any good at 3-D printing? What is your competency in this?

Martin Fink

So the reason I'm hesitating is I want to be careful to not -- well, like I said, we have some technology announcements that are coming later this fall. And so I think I am going to have to defer an answer to that question so that when we do those technology announcements and you understand the technology and the intellectual property and how we are delivering that, I think the answer to your question will become obvious. But if I answer that right now, I think I'd be letting too much of the cat out of the bag.

Jim Suva - Citi Investment Research

So it sounds like by the end of this calendar year we'll be seeing the cat.

Martin Fink

That's correct. It will be the best cat you have ever seen.

Jim Suva - Citi Investment Research

Hopefully it's not a 5-foot cat. Additional questions from investors? Maybe as they think a little bit before the next hand goes up, your CEO Meg and CFO Cathie are in a position right now of having tremendous strength of cash flow. And they've talked about making more acquisitions, yet HP hasn't made a lot of acquisitions. You being in the seat of Chief Technology Officer, are there certain areas of technology that you would like to see HP make some acquisitive acquisitions for capabilities or products, or skill sets or technologies? How would you like to see them put that money to use?

Martin Fink

So your statement is correct. I mean Meg has done and what Cathie have done a tremendous, tremendous job of, one, repair the balance sheet and with the tremendous attention to cash flow, continue to put us in a position where not only we can return money to investors but we can also make those acquisitions if we need be. Now we have also clearly articulated our strategies around cloud, big data, security and mobility. And therefore I would expect that any acquisitions or any M&A transaction that we would do, would be focused along those strategic vectors that we have.

But at the same time, we want to make sure that we stay very disciplined around the economics of the value of what it is or any assets that we acquire. And be very clear to the investor population if we do do a transaction, that we do a transaction because of a particular revenue profile, a particular technology that we are acquiring, some specific IP, a particular talent pool that we need. And so we will be very clear about that as we go do any form of M&A transaction.

Jim Suva - Citi Investment Research

So it sounds like there is nothing right now you're itching that you feel you need in your labs?

Martin Fink

Well, there's plenty of things I am itching to go do but nothing I am going to talk about in detail.

Jim Suva - Citi Investment Research

Okay. Additional questions from investors? We have probably a full room here. Please raise your hand for questions. How should we think about, and as the microphone goes to this gentleman here, how should we think about the allocation of your time or bodies, or resources that Meg and Cathie give you? Break it down maybe by cloud versus The Machine, versus Moonshot, versus 3-D printing. Or how should we think about your resource allocations because I'm sure they don't give you everything you always ask for.

Martin Fink

Those are complicated questions to answer because there is a set of disciplined trade-offs that we have to go through. So one obviously is strategic alignment. And things like Moonshot and The Machine are very very tied to a strategy and a focus on infrastructure and the future of being able to deliver high performance at low energy. And so they tie to that. The cloud is where the IT industry is moving as its consumption model for all parts of IT services or for most parts of IT services.

And so in those cases, it's not necessarily a conversation of why are you investing in cloud. Those are not the conversations. It's how much can we put there and we always have constraints. The good news is, the abundance of ideas in HP always, always, always exceed the amount of money that we have to go apply to those ideas. And it goes to I think what Meg speaks about the spirit of innovation. So there is a complex set of judgment calls that we make through each year's budgeting cycle as to how much to invest in the machine versus infrastructure, versus cloud versus our enterprise services, versus our print and personal systems.

And some of those are very much tied to P&L allocations. So what is an appropriate R&D as a percent of revenue for that particular business and than other investments which Meg is always very involved in, are those investments that are ahead of revenue. And those are probably always the most difficult ones for us to talk through where we have the most meetings. Because when we have an established business we can kind of do that, the mathematics around the P&L of what an appropriate R&D envelope looks like. When we get to areas of research and areas that are ahead of the revenue curve, so there is always a little bit more gut wrenching.

Jim Suva - Citi Investment Research

There was a question here in the middle of the room.

Unidentified Participant

Hi, thanks for taking my question. As a CTO, you have a very interesting seat. And I'm just curious, after a decade of software, driving server consolidation and sort of eating away at hardware, does that ever -- is that a pendulum that sort of flips the other way? What's your perspective as a hardware manufacturer? And what's the value of hardware? How do you see the tension between software and hardware potentially shifting in the future? And help us understand the case for a hardware manufacturer going forward.

Martin Fink

So that’s a actually a tremendous question. I like that question because there are very much, as you point out, in the IT industry, these sort of pendulum of cycles through the IT industry that we go through. And there is, at this point we have been going through a cycle of where there is a perceived commoditization of the hardware components of the IT industry. But what you should read out of the investments that we are making in The Machine and the investments that we are making in Moonshot and Apollo water-cooled servers. And we recently -- I apologize here, I am going to use our code name which I am not supposed to do. We have a machine called DragonHawk, and I know code names better than product names sometime. That is a high-end x86 machine for very large memory workloads. I think it's called CS 900, that’s what it is.

So we actually see that there are a number of areas where we continue to be able to differentiate at the infrastructure level. The second part is, we were the first ones in 2009 to talk about the convergence of the infrastructure. So bringing servers, storage and networking together so that you can envision them as one entity. And so this brings the importance -- so now you get the layers of software. And so there is a layer of software, ours we call OneView, that allows you to visualize what we call the software defined data center. That allows you to visualize your infrastructure really as one entity.

So today we see that there is still a tremendous amount of value that we can deliver in the infrastructure through convergence. Through the software defined data center, the software defined infrastructure and making that easy-to-use and then as we optimize our cloud stacks for that infrastructure even further. And those are all the things that are in play today and then The Machine is a statement that says, anybody who really thinks that we are in a perpetual stream of hardware commoditization, I will say in my personal opinion, they are dead wrong. And that there will actually be -- there will absolutely be a turn in that pendulum swing, to use their word, towards value in the infrastructure as we approach the end of the decade.

Jim Suva - Citi Investment Research

There's a question closer towards the front right here.

Unidentified Participant

Hi. Thank you for taking my question. My question is regarding Moonshot. Now, Moonshot from what I understand, was using 64-bit ARM process design. Is that still the case or are you considering Intel's Atom or Bay Trail or any of those technologies? Where do you see the future of that?

Martin Fink

Okay. So you are actually a little bit off. The Moonshot was about first and foremost, low-energy computing. The first cartridge we delivered was actually an Intel Atom based cartridge. And ARM was actually in the first iteration, a 32-bit ARM processor, and we are now working on delivering 64-bit ARM, is now targeted I think it's this fall, to be delivered. So Moonshot is first and foremost about managing energy and compute as an entity. So being able to have an infrastructure where the computer is specialized to the workload and therefore you get all of the benefits of performance without paying an extra energy tax by being general purpose. And that's what we have been delivering.

Unidentified Participant

So does that mean that you will you stay on ARM or...

Martin Fink

Yes.

Unidentified Participant

Or if I look at maybe two or three years into the future, then given Intel's sort of lead in the process in the node technology. Does that have a bearing on how you think about the future in this space?

Martin Fink

So the -- so I think the short answer to your question is, no. So, yes, we will continue to deliver both on the x86 and the ARM technology. The beauty about the ARM technology is that there is a massive ecosystem of extensions that are available as a result of how ARM is used in the mobility world. And we want to be able to take all of that ecosystem and be able to leverage that into the server world. But there will continue to also be workloads that benefit from an x86 based architecture where compatibility is important. Someone's lost a source code and they can't recompile, you know, and the list goes on and on. And so we definitely see a role for both for the time being but absolutely we are still all in on ARM and ARM towards 64-bit as well.

Jim Suva - Citi Investment Research

And Martin, just to clarify -- as the microphone makes its way all the way over to the opposite side of the room, all the way over here, please. Just to clarify, Moonshot does run on x86?

Martin Fink

Yes, it does.

Jim Suva - Citi Investment Research

That's just to clarify. Some people say--

Martin Fink

Yes. So Moonshot is not an ARM-only thing and it's not an x86 only thing. It does both and it is about low-energy, specialized compute to the workload.

Jim Suva - Citi Investment Research

We've got a question over here.

Unidentified Participant

Just a follow-on Moonshot question. I know not all data centers are alike but can you give us a frame of reference in dollars for how much energy costs might be at data centers? And with Moonshot, what order of magnitude of savings in that energy cost do you hope you achieve on an annual basis?

Martin Fink

So we have -- I want to be careful how I answer that. I will give you some orders of magnitude types of things. And the reason why I want to be careful and the preamble I will give you is, everything does in the end depend on the specific workload. But at the same time, if you look at the materials that we have produced, we have many workloads in which we can deliver greater than 80% energy savings by moving to a Moonshot type architecture. Right. But I just wanted to provide the preamble that that is not all workloads in all cases deliver 80% energy savings. In some cases it will actually be more than that, in other cases it will be less.

Unidentified Participant

And just to follow up, I know data centers are all different sizes, different number of servers. But how many thousands or millions of dollars are we talking about in terms of annual energy cost today for a Moonshot introduction.

Martin Fink

So I don't know that I can answer that accurately. I don't have those numbers off the top of my head. I apologize.

Jim Suva - Citi Investment Research

Thank you. We have time for maybe one or two more questions, at the most. A question that I've been very much, on top of my mind, is HP has gone through a lot of restructuring over the past several years. A lot of good people at HP have been let go or have moved on to other parts of the world outside of HP. A lot of workforce reductions. And in fact I think HP in the past six months has increased its rounds of restructuring again to about 50,000 bodies. How has that impacted HP Labs? And what about -- is there a concern of has Meg and Cathie's decisions kind of started to slow down your development or how has these restructurings impacted HP Labs and your development?

Martin Fink

So a couple of comments. So one, just for everyone's benefit, I have been at HP for 29.5 years. I have lived through every non-founder CEO and I have therefore lived through every restructuring that we have gone through. And what I can tell you about the way in which Meg has done this is one, very thoughtfully, and doing in such a way that we are now in a very stable, well run machine as we go forward. And now specific to your question, there has been zero impact to HP Labs as a result of the restructurings, specific to all of the other work that you mentioned. But what Meg has been doing is really optimizing, tuning and focusing our energy going forward so that we have a clear strategic focus and we have all eyes on that strategic focus. But she has done it in such a way where if you look at the numbers, we have also been increasing our spend in overall R&D as a company.

And so in that regard, Meg's focused on innovation and product development can be seen not just in the R&D spend but in the number of product announcements that have come out now just in the past six months, have been astounding. For most people's benefit, if you're not aware, R&D you do today shows up in anytime from 18 months to two years to three years later. And so what you are seeing now with things like Apollo, the next releases of Moonshot, The Machine, the work that we are going to be talking about in 3-D print, all of the new work that's been done in commercial PC, the multifunction printers. I mean the list is incredibly long. That is basically all now you can directly tie it to Meg coming on board and saying, innovation is at the core of what will cause us to win. And now you just see it in just the past six months in the stream of never-ending announcements and the most recent of which is our Generation 9 ProLiant platform.

Jim Suva - Citi Investment Research

Well, thank you, Martin. And I want to thank Hewlett-Packard for sending Martin Fink, the Executive Vice President and Chief Technology of Hewlett-Packard. And with that, that will conclude our fireside chat. Thank you.

Martin Fink

Thank you.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!