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HP Storage Head, Former 3Par CEO David Scott Is Retiring

The man who ran the storage company that HP and Dell fought over is retiring.


There are some changes coming among the senior ranks at computing and IT giant Hewlett-Packard. According to an internal memo obtained by Re/code, David Scott, the head of the data storage business, and the former CEO of 3Par, the storage company HP acquired in 2010, will be retiring early next month.

A replacement has not yet been named. Bill Philbin, an HP VP, will lead the unit on an interim basis.

Storage has been a solid business for HP, and CEO Meg Whitman usually has nice things to say about 3Par — the brand has survived within HP — on earnings calls. Even so, storage revenue, like nearly every other revenue line at HP, has declined, from $3.8 billion in 2012 to $3.3 billion last year.

Those who remember HP in its more aggressive and acquisitive days will recall that it took 3Par as its prize after a bruising M&A slugfest with rival Dell. In August 2010, Dell offered $1.15 billion, or $18 a share, for 3Par. Its shares had closed at $9.65 the day before the offer.

A week later, HP blindsided Dell with an offer of $24 a share.

Over the course of the next 18 days, HP and Dell dueled over 3Par with back-and-forth offers. Some commentators wondered if the two combatants were crazy. The denouement came when HP offered $33 a share, or nearly $2.4 billion. When the smoke cleared, the bean-counters at Bloomberg News remarked that the premium of about 3.4 times 3Par’s pre-offer share price was the highest any company had paid in an acquisition of $50 million or more in nearly a decade.

As a historical note, it’s worth remembering that the 3Par bidding war occurred during an interregnum period at HP between CEOs. Mark Hurd had resigned from the company on Aug. 7 and Léo Apotheker wasn’t named until Sept. 30 and didn’t officially begin his infamous 11-month stint until Nov. 1. During this period, CFO Cathie Lesjak was serving as CEO on an interim basis.

Anyway, the 3Par bidding war went on to spark a series of other deals in the market for data storage systems aimed at large corporations. Before September was over, IBM had agreed to pay $1.8 billion for Netezza. Then in November, EMC paid nearly $2.3 billion for Isilon Systems. Finally, in December of that year, Dell dropped $960 million on Compellent. The frenzy was over.

But the shouting wasn’t. Dell founder and CEO Michael Dell grumped in an interview in Davos that HP “paid way too much” for 3Par. This prompted then-Chairman Ray Lane to retort that Dell had been willing to pay almost as much as HP did.

Scott had been an HP veteran, and started his career at HP in 1983. He remained with the company until 2001, when he left to join 3Par as its CEO when it was still a startup.

Scott saw 3Par through some tough times, including a recapitalization in 2004 and a 2007 IPO that took place not long before the markets turned south. Its VC investors, including Accel Partners, Mayfield Fund and Menlo Ventures, all held on to their stakes for three years after the IPO. Their patience paid a big dividend when Dell and HP squared off.

So back to the memo. Here’s another change in HP’s storage team: Peter Slocum, a VP in charge of utility development in the storage unit is also retiring.

Here’s the full memo, from Antonio Neri, head of the $28 billion Enterprise Group.

From: Antonio Neri
Senior Vice President and General Manager, HP Enterprise Group

To: HP Enterprise Group colleagues

Message from Antonio – HP Storage Leadership

HP Restricted – For Internal Use Only

I’m writing to let you know that two members of our HP Storage team have announced their retirement. David Scott, Senior Vice President and General Manager of HP Storage, will be retiring from HP, effective March 6, 2015. In addition, Peter Slocum, VP of Engineering of the Utility Development Unit (UDU – Core 3PAR Engineering), will also retire from HP, effective February 28, 2015.

We first got to know David when he joined HP in 1983. Over the next 17 years, David developed a trademark for thinking big and aiming even bigger. In 2001, he left HP to become CEO of one of Silicon Valley’s hottest start-ups in 3PAR. In 2010, David re-joined HP when we acquired 3PAR. Since then, the HP Storage team led a revolution in how customers store, secure, archive and retrieve data, which catapulted 3PAR to over $1B in annual product sales.

David and Peter leave us with a thriving Storage business filled with passionate people and a strong innovation roadmap. HP Storage has developed and delivered one of the industry’s broadest and strongest portfolios. Leadership offerings that cover key trends such as All-Flash, Backup and Software Defined Storage. As a result, HP has been the only major Storage vendor to grow External Disk market share in each of the last four calendar quarters, and grew share more than any other major vendor during that time period.

Over the past five years, HP has been the driving force behind every single major trend in the storage market.

• The market movement from high-end to midrange primary storage began in December 2012 when HP introduced the 3PAR StoreServ 7000-series.

• Double-digit growth in flash is timed with HP’s introduction of all-flash storage for mainstream, Tier-1 applications via the 3PAR StoreServ 7450 in June 2014.

• The growth in software-defined storage, which started with HP’s introduction of HP StoreVirtual in 2008 and expanded to HP StoreOnce in 2013.

• HP has always been committed to open-source, open standards for storage, as evidenced by the OpenStack Cinder drivers introduced in April 2013, making HP the top contributor to OpenStack development.

• Simplifying backup by eliminating backup solution dependencies is another trend HP leads with 3PAR-StoreOnce Flat Backup, introduced in December 2014.

There is a lot of excitement and momentum in our Storage business, and we have great leaders to help define the next-generation of market trends.

Bill Philbin, VP of Storage Engineering for the Virtual Development Unit (VDU), will lead the HP Storage business as the acting General Manager while we conduct a search of both external and internal candidates to succeed David. Bill is already responsible for a significant portion of our storage portfolio including Entry-level Storage, Object Storage, Network Attached Storage, Data Protection, and Software-defined products. Prior to joining HP, Bill was SVP and General Manager of the Core Storage Business at NetApp. Bill will provide continuity of leadership and ensure we continue to deliver on our FY15 commitments.

Philip Tamer will assume the role VP of Engineering for the 3PAR Utility Development Unit (UDU), effective February 28th. Philip is currently VP of Engineering for HP Converged Systems, where he led the development and release of CloudSystem 8, HP OneView, and our ConvergedSystems solutions. Prior to HP, Philip led EMC’s flagship Symmetrix business as its General Manager – leading the development of both the DMX-4 and VMAX storage arrays. Over the next month, Peter and Philip will work together to ensure a smooth transition. In addition, over the next 30 days, we will work with Philip on a leadership transition plan for the CS engineering team.

Please join me in supporting Bill during the transition and congratulating Philip on his new role. I’m excited to watch HP Storage build on our foundation and momentum to claim leadership in the Storage market.


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