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HP Reorg Highlights Storage

Hewlett-Packard Co. (NYSE: HPQ) is folding its Enterprise Systems Group (ESG), including its range of storage products, into its HP Services division, creating a new Technology Solutions Group (TSG).

The move could increase already fierce competition among top SAN vendors, resulting in better deals for enterprise customers.

HP revealed its plans in a meeting of execs with financial analysts in New York City yesterday, during which the company was optimistic about its outlook (see HP's Hot on Storage). But references to TSG at the meeting were oblique, and HP would not officially confirm the move until today.

Ann Livermore, who is now executive VP of HP Services, will head up the new division, and Peter Blackmore, executive VP of ESG, who came to HP from Compaq, will be chief of the Customer Solutions Group (CSG), which will be the sales arm of TSG.

The new TSG group will be the largest of HP's divisions, representing over $9 billion in quarterly sales, to judge from the company's fourth-quarter 2003 results, released November 19. In those results, HP Services accounted for $3.2 billion in revenues and ESG for $4 billion.

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