emily: she took ebay from a 30 person startup to a multibillion-dollar powerhouse. and then lost a race for governor. and now meg whitman faces her most ambitious challenge yet, turning around struggling giant hewlett-packard. her solution, to split the company in two. joining me, hp ceo meg whitman. thank you for joining me. thank you for being here. meg: you are welcome. i am an admirer of your show.

emily: we are at hp discover. your annual tech conference. and this is your last one as a single hp. is it bittersweet? meg: it is a little bittersweet because the company has been together for so many years. but i have the confidence that this is the right thing to do because our markets are changing at lightning speeds. it will allow us to be more agile and focused and responsive to customers. it is a landmark, it is a moment in history but i am optimistic. emily: what do you think the biggest challenge is going to be? meg: first is we have to get to be two separate companies. this is the biggest separation that has ever occurred as far as i know in american business. once we get there we have to launch these two companies successfully with new leadership teams and boards of directors. in many ways, clean sheeting two

new fortune 50 companies. i think we are well set up. i feel like we have done everything in our power to get this done right. emily: when did you start seeing the split as the right choice? meg: i joined 3 1/2 years ago, four in september. the first thing i did was to say we would not spin the pc division. my predecessor had said we are not going to spin pcs, not printers, just pcs. my first decision was if it was a good idea and i decided it was not a good idea because i thought the company needed to bed down and get organized and have continuity of leadership and get the right strategy. invest in r&d. i look back now and even if we had wanted to i am not sure we could have pulled off the separation. we embarked on the five-year turnaround journey and made a lot of progress and repaired the balance sheet. late last spring, i said how do

we accelerate the turnaround? after many board meetings, we said it makes sense to separate these two companies so we can be more focused and agile and have a capital structure that is right for the market. emily: was it difficult to convince them? difficult to get investors or executives on board? meg: it is a journey that you go through. you surface the idea, you talk about it, you run different scenarios. the board was fantastic. they did exactly what boards are supposed to do. they questioned, asked for more data. it was a very interactive process and we brought everyone along together to the right place. emily: michael dell saw something in taking dell private. others said you could have broken up the company even more. did you consider all the possible scenarios? meg: we considered a lot of different scenarios but we

decided we wanted to continue to be a public company because we wanted shareholders to get a chance to have shareholder value creation. you might recall the stock price got as low as $11 or $12. we built the company backup and shareholders and the company got to share in that. i think that will happen again here. at least over the longer term. emily: you are going to become the ceo of hewlett-packard enterprise. and i am curious how you came to that decision because it is a more diverse and unpredictable set of businesses. hp plays more to consumer strength. meg: part of the decision is who is in what spot and who do you have on the team that can step up? my view was, dion weisler was an incredibly talented executive. he spent many years in the pc business and i admire dion a lot. i thought he would be perfect

for hp ink. i said, i love the enterprise business and it has not been what i have done for 25 years but i now know the business and i love the business and the dynamic nature of it. for management continuity, what ailed hp was too much management turnover. emily: you are going to be chairman, how does that work in practice? say hp ink wants to do a deal. meg: we did not create these companies to compete with each other. at least for some period of time we have well-defined swim lanes. hp ink will be all over 3-d print. we will be focused on converged infrastructure, software defined data center, our services business, helping customers take it infrastructure from where it is today to where it has to be.

there is plenty of greenfield space and i don't to get make sense to try to eat the other company. emily: has it been harder than you thought? do you have moments where you thought i do not know if i can do this? meg: it is hard. whenever you come into a turnaround -- and i have done a couple of them -- it is always harder than you think. even though i was on the board, you find out things that you could not see as a board member so it has been tough as the company have been through a lot. it just takes perseverance. you get up every morning and you fight the good fight and you win the hearts and minds and restore the confidence. it has been hard but it has been really gratifying. i have to say relative to running for governor this is easy. [laughter] emily: you mentioned you spend a

lot of time with your ceo colleagues. in the last few years, who has been the best council? who has given you good advice? meg: a number of people. png, a big customer. i sit on the png board. jim mcneary of boeing has been a great counselor. howard from starbucks, he was one of my board members at ebay. emily: what kinds of things have they said? meg: turnarounds are difficult. howard did one at starbucks. i read his book and we compared notes. emily: you mentioned that you might grab a coffee with the ebay ceo who is going through this. did you grab the coffee and how did it go? meg: has done a great job and i am proud of john. it turned out coincidentally we were splitting these companies. at the same time. what are the chances? we compared notes through the whole process. what was he learning? what was i learning? what could we both do better?

emily: top one revenue has declined year over year for the last 15 quarters. when does hp get back to growth? where do you see the growth coming from? ♪

emily: top line revenue has declined for the last 15 quarters. when does hp get back to growth and where do you see the growth coming from? meg: we have made progress on this dimension from the single-digit declines to flat to down 1%. which is not what we aspire to but is such an improvement over four years ago. so i would hope that over the next year or two we would be able to demonstrate growth. we will be two different companies so it will be harder to measure. listen, we have to be able to grow these two companies. you cannot cut your way to greatness. you have to be able to grow. that is the objective of both

companies. on the hewlett-packard enterprise, we are excited about merged infrastructure and the software defined data center and services. emily: that is where you see the growth coming from? meg: i do. and the software portfolio. on hp ink side, we are excited about 3-d print. this could be a big business. we are excited about immersive computing. excited about the core print business. people say, print is dead. it is not. people are not printing at home as much but i do not know about your office. everyone is still printing. [laughter] emily: i am still printing, for sure. we are seeing a lot of companies turning to software to grow the bottom line. apple and ibm are making a huge push into enterprise. how do you compete with that and what are you doing in the software portfolio? meg: ours is more system software that runs data centers.

emily: you do not see apple and ibm as a competitor? meg: ibm, yes, in many cases. apple is different. apple is more about the devices and they would very much like to get into enterprise and we obviously need to defend. more on the hp ink side but we need to defend. as you migrate, say you are a cio. as you migrate your infrastructure to the next generation that will be required for you to be cheaper and faster and more nimble, the ability to write applications in a new environment, cloud native and mobile, it will be important for you to have orchestration, monitoring software. everything has to be automated today. so we have those kinds of opportunities in our software portfolio. we play in quite specific areas of software that is a little different than erp systems like an oracle or sap or salesforce.

is not really our market. emily: what about the cloud? what is the hp strategy for the public cloud? are you going to be a cloud or sell to the cloud? do you plan to take on amazon and google? meg: our public cloud is not designed to compete with azure or aws or google. what we see most enterprises wanting to do is not to put everything in a public cloud. so if you want only convenience you might go to a public cloud but if you want security, you want to be in a private cloud. our strategy is hybrid cloud. your cloud, the way that is right for your company and your industry. emily: a lot of deals happening. intel. do you see a segment that could be transformed? meg: i think why you're seeing quite a bit of an increase in m&a activity is our industry is

changing. every 10 or 15 years in technology i see techtonic plate shifts. web 1.0 to now mobility. we are in the cusp of an enormous change. when that happens, the industry rearranges itself. we are back in the m&a game. we will augment our innovation internally, what we call organic innovation with m&a but we want to be smart. emily: you mentioned tectonic shifts. du think we will see more consolidation? meg: i think you will see consolidation which is what happens when industries get disrupted and dislocated. i cannot tell you how that will play out but i am not entirely surprised at some of the m&a in recent weeks. emily: any sectors you think it will happen? meg: two kinds of m&a. one is consolidation of existing players but there are also new startups that are coming up that

are either going to go public and be great independent standalone companies or become a part of bigger companies. a we have to be watching and thinking about what the right thing for us is in both of those areas. emily: what do you think about valuations? do things seem expensive now? make: certainly, in the startup environment in silicon valley it seems expensive but i will say if you find a company that is completely disruptive and has a chance to take big share, the valuations might be worth it. but we are quite disciplined buyers. a we understand that acquisitions for the most part need to be accretive and of responsible to shareholders. emily: mark andreessen is the guy who got you into this position in the purse place. you consult with him about what is going on with startups? meg: he has been a great counselor to me and the company and he still sits on the board

and provides a tremendous perspective. mark and a couple of other board members have their fingers on what is going on in the valley. we are fortunate to be there because we see what is going on. emily: are you glad you took him up on the offer? meg: i am glad. there were a few days where i said mark, what are you thinking? it has been a tremendous experience. i think it matters what happens to these storied companies. great american icons. it matters what happens to hp in silicon valley, it matters to california. i would argue it matters to the united states and to the world. we have such a big footprint that we matter around the world and that is a responsibility we have to take seriously. emily: we talked about a billion dollars in restructuring costs, $2 billion in the service area. when does cost cutting stop and restructuring end? this is a company that has been restructuring for many years before you even got here. meg: we have come a long way to

getting our cost structure in line but nothing is worse than an uncompetitive cost structure because then you do not win deals. you are in a downward cycle. you have to keep on shrinking. emily: do you think in 2018 it will end? meg: it is hard for me to predict. i think we have the next three years mapped out well but it is a dynamic industry. i think when industry is changing as fast as ours, it is hard to make predictions. emily: when it comes to jobs, jobs have been cut, 55,000 jobs. can you give us an idea of how many more? make: we are not entirely sure. it will depend on how these companies do as separate companies. there will be restructuring costs as we continue to be effective and lean and competitive on the world stage. what i know is that if we do not get the cost structure right, this will not be the happy

ending that we all know it can be. so we make the tough decisions and we do it in the best possible way that we can. it is the hardest thing that i do as a ceo but i have to have the good of the company and our customers in mind as we make these decisions. emily: do you see job creation is a part of the strategy? made: it is interesting, yes. we are shedding jobs in some places in hiring and others. we are hiring in cloud, in powering data-driven enterprise. security. emily: do you see more opportunities to work closely with microsoft? meg: i think he has done a wonderful job and we have quite a close relationship with them. it was announced yesterday that we won the 2015 partner of the year award. we are really proud of that. we have a great partnership on the personal systems business and are excited about the launch of windows 10. the partnership between hp and microsoft is as strong as i have seen it since i have been at the company.

emily: how much longer do you see yourself doing this? ♪

emily: do you find it troubling that there are so few women in silicon valley and especially in leadership positions? meg: i think we can always do better. if i take industry as a whole -- and tech is behind here but my class at princeton had less than 20% women and the same was true at harvard. they are now 50% women. part of this is simply generational. but part of this is making sure that women know that they can have a great career and have a family and do some other things. technology is a little bit more slow and i would say there are a couple of reasons why. it goes back to we have to get girls interested in science, technology, engineering, and math. emily: is there anything in particular that you have done at hp or before to address the issues? meg: first of all, we really work hard to make sure that we

get a diverse group of entering employees. listen, we just had to build two new boards. we needed to make sure that the boards were diverse. and what i will tell you is that unless you work at it it does not actually happen. emily: what advice do you have in terms of overcoming the toughest obstacles that you face? him meg: first of all, you have to have confidence in yourself. you have to find something that you love to do. i lost a well-publicized race for governor. you know, really painful. but i picked myself up and dusted myself off and had a chance to run one of the great companies. emily: you have talked about the strong dollar has hurt hp and other businesses that are big abroad. should there be a policy response to this? would hp consider a bond sale? meg: this is far bigger than hp, this is all around the global economy and where people feel safe putting money.

my view is we have to react to the situation. we are not going to be able to influence global currencies. my view is that the dollar is going to remain strong for a bit. i do not know how long, if it goes to parity or stays where it is or gives of ground. when you run a company you have to manage it. emily: would you consider a bond sale? meg: probably not at this juncture. we will be refinancing the debt when we restructure and we are on such a great path and if we have not had this currency we would have flexibility. emily: there is a presidential election happening. former ceo carly fiorina is running. many other candidates. are there any candidates you like? meg: there are a lot of good candidates running. we will see how all of this sort out. there are a lot of republican candidates, sort of there is a

new one every day. what i would say is we should be really grateful for people who want to run for public office. we need great candidates, we need a diversity of backgrounds, and i will tell you from personal experience that it is not easy. emily: what is next for you? how long do you see yourself doing this? what would you want to do after hp? meg: i do not know. i have to say, i have stopped giving forecasts around this and i never dreamed i would run for governor. i also said i probably will never be another ceo. you never know where life will take you, twist and turns. we will see. emily: how much longer do you see yourself doing this? meg: i do not honestly know. i am excited to get these two companies all. i have made a commitment to both and i will see this through. emily: meg whitman, ceo of hp. thank you for joining us. meg: thank you. ♪

♪ emily: his first love was the piano. he spent 10 years on the road, playing keyboard in a rock band, touring in a beat up van. will along the way, he met so many musicians without an audience he decided to bring the audience to them. he began the music genome program, a database that aims to predict what you want to hear. you know it as pandora. today, more than 80 million people tune in every month to listen to millions of songs on over 7 billion pandora stations.