It's more complex
Whitman is not an idiot (quite the opposite - she is very smart), but she was out of her depth as CEO of HP with no relevant domain expertise. This was the Board's fault with the appointment, not hers. She wanted to try and get the company to innovate its way forward using the 2011 5 year plan, but the results simply didn't come. Financial engineering, with its associated horrific human cost, became the only alternative available, and one which she aggressively pursued in order to deliver shareholder value (prompted by a now passed activist investor). Lacking expertise, Whitman relied on the advice of existing senior operating executives and more she brought in. Many were long tenured and had no better than average competence, but this was just as true of many of the shorter tenured imported executives too, most of whom gave her poor counsel.
Investment was spread too thin rather than focused - there were simply too many bets thrown against the wall hoping some would stick (lack of Whitman's expertise combined with poor advice). A ridiculous investment was made to compete with the HP Public Cloud (substantial opex that could have better served innovation in areas where HP could have actually succeeded) given HP had no chance to fund the capex required to compete with AWS or Azure long term. The Machine, now cancelled, was another poorly thought through initiative requiring millions in investment. However, most of these bets involved using the balance sheet and acquisitions. These acquisitions could be divided into two groups. The first were ones that never succeeded because initial opex investments were not sufficient and HP refused to fund or even expect the field sales force to build the sustained competencies to sell the new products effectively. Investments in Autonomy, Vertica and Security businesses were examples. The second group were acquisitions where initial investments were sufficient to allow a successful return, but they then fell foul of the big HP Achilles Heel - the Server business and Enterprise Services/EDS. These two businesses were huge and yet have not been effectively run with their respective strategies resulting in extremely low gross/operating margin percentages (the Cloudline fiasco targeting Tier 1 cloud providers being one example of chasing margins into negative territories; poor customer satisfaction driving loss of ES account revenue against high fixed costs being another). This put immense downward pressure on opex across the entire HP portfolio while trying to meet short term Wall St. expectations. Desperate measures to counter this impact resulted in the outsize influence of McKinsey and Bain consultants to drive short-sighted cuts that resulted in initially successful acquisitions turning into a stalled growth or downward spirals. Cutting specialist sales and marketing capabilities in areas like networking and storage were examples of these poorly judged actions. 3COM and 3PAR were examples of sub-optimized returns after significant initial success.
At the end of the day, changing the trajectory of HPE will be very difficult given the outsize dependency on the Server business for revenue and gross profit dollars. The acquisitions of Aruba, Nimble and Simplivity will fall into one of the two buckets described. As evidence, the latest earnings report was interesting given the focus on the need to add back storage specialists in the US given weak 3PAR performance. That is the beginning of yet another cycle of specialists vs generalists that regularly afflicts HP's Enterprise Business. Three years ago HP started cutting specialists in favor of account managers. Without specialists, Networking and Storage cannot succeed, and inevitably poorer performance resulted. So they now realize they need to start hiring more specialists. At some point, they will then reverse course when the cost of the sales force becomes too expensive and the server teams and sales executives say that it can all be done (more efficiently) with account managers and generalists. It's a never ending cycle, based on poor go-to-market strategy. I hope Neri can find a way to break the cycle successfully. If not, there is only the possibility of a steady decline. However, I for one do not wish this to happen and hope for the best. It is a great company that has been poorly served by its previous leadership.