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HP's Whitman Looks Ahead to Post-Split Future

With five months to go before the Silicon Valley giant is cleaved in two, the CEO chats about big bets on research and small M&A deals.

There’s another year yet to go in the five-year turnaround Meg Whitman promised at Hewlett-Packard. And that includes a year after the company splits in two on Nov. 1.

Whitman hammered her message home at the three-day HP Discover event in Las Vegas this week: “Have confidence in the turnaround, and have confidence in these two companies.”

The split, announced last fall, will have HP break into two publicly traded companies, each bringing in about $50 billion in annual revenue. Whitman will lead Hewlett-Packard Enterprise, which includes corporate computing, the cloud, services, software and networking.

In an interview with Re/code, Whitman talked about what the new company will look like and how it will differ — or not — from the company she has helmed since 2011.

She called “The Machine,” HP’s concept for a revamped computer that will be packed with a new kind of memory, “a big bet” that will be important to Hewlett-Packard Enterprise.

“We have devoted a big part of the HP research budget to The Machine,” she said. “It’s a big part of who we are. It’s a statement that we are all in on hardware. Of course hardware doesn’t run without software, but it says that we are leading the charge to invent the next generation of computing. … And if we don’t do it, then I don’t know who will. Dell isn’t doing it. IBM definitely isn’t doing it.”

What if it doesn’t deliver the improvements promised or simply fails to gain traction in the marketplace? “If this doesn’t work it will be embarrassing, but it will not be a financial catastrophe for the company,” she said. “Whenever you take on these kinds of downstream research projects, you know by nature that it’s speculative. If it was easy someone else would have done it by now.”

The Machine is a long, forward-looking bet, but there are still the day-to-day concerns. Much of the heavy lifting related to breaking HP in two needs to be completed, and there continue to be persistent questions about HP’s M&A intentions. In March HP did its biggest deal since the disastrous $10 billion Autonomy acquisition, paying $3 billion for the networking concern Aruba Networks. Whitman hinted she may still be on the hunt, but for smaller targets along the lines of other recent deals like the security startup Voltage Security or the networking player Contextream.

“We’re trying to reconnect to our Silicon Valley roots. We have to be out there on the landscape looking at what some of these startups are doing that can add to our solution set,” she says. “Maybe we’ll buy them, maybe we’ll invest in them. Those are the kinds of deals I think you’ll see us do more of.”

This article originally appeared on Recode.net.