HP Outlines Tech Strategy

The company Technology Solutions Groups is focused on business-ready infrastructures, everything-as-a service, and, of course, clouds

David Hill

April 8, 2009

5 Min Read
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Hewlett-Packard held its annual Technology Solutions Group Industry Analyst Summit in Boston last month. Approximately 225 analysts and 100 HP executives and other key company personnel were in attendance.

Ann Livermore, executive vice president, runs TSG. Last year at this time TSG consisted of three global business units: Enterprise Storage and Servers (ESS), HP Software (now HP Software and Solutions), and HP Services, which consisted of HP's outsourcing services, consulting, and integration services as well as technology services). Since then, the TSG portfolio has been greatly expanded with HP's crown jewel services acquisition -- EDS -- and its networking business -- ProCurve. In addition, this year's TSG Industry Analyst Summit featured breakout sessions with two of its vertical industries -- Financial Services Industries (FSI) and Manufacturing & Distribution Industries (MDI).

Livermore stressed that HP wants to be No. 1 or No. 2 in every market segment in which it competes and the company has a focused strategy to achieve that goal. As part of its efforts, HP has been very active on the merger and acquisition front with the assimilation of 30 companies in the last 42 months, notably the aforementioned EDS deal. As part of its ongoing TSG efforts, HP will focus on continual cost structure improvements internally and on volume cost structure economics with its customers.

In going to market, HP focuses on helping the CIO help his or her business accelerate growth, lower costs, and better manage risk. The sourcing decisions for IT resources can be enabled in-house, externally, or via cloud, but regardless of sourcing decisions the movement is toward treating everything as a service.

The main tent speakers who followed Livermore on the first day discussed three themes: business-ready infrastructures, services, and the "cloud."HP believes that most businesses' hardwired IT infrastructures spark business alignment difficulties, as well as time-consuming and inefficient collaboration. In order to overcome those challenges, IT needs to be business-ready. That is, IT must be responsive to the pace of business, not the pace of what the IT infrastructure has traditionally been able to accommodate. HP focuses on delivering business-ready infrastructures that are standardized and built to support repeatable business services. For example, service fulfillment by a systems administrator should move from manual approval and fulfillment in weeks to automatic fulfillment in a few hours, in a manner that is compliant and correct for all requirements. HP Operations Orchestration aids the processes of optimization and integration that can result in business-ready IT infrastructures.

Of course, HP's services portfolio is receiving a lot of attention because of the EDS acquisition. And the services revenue is large with $8.7 billion in HP's first fiscal year quarter for 2009. Profits were up too, which is a good sign given the economy.

HP emphasizes three big themes that permeate TSG as a whole:

  • Adaptive infrastructure (AI) -- the objective of this strategy is to enable infrastructure agility and enhance performance.

  • Business-ready services -- this just-discussed strategy's objective aims to reduce IT complexity and align IT with business priorities.

  • Business outcome optimization -- the objective of this strategy is to improve operational efficiencies and increase customer loyalty.

On the AI front, services can help streamline and improve infrastructure processes, such as helping with data center transformation. On the business-ready front, services can help businesses to modernize their application and information assets via applications development and modernization services. On the business outcome optimization front, services help businesses to align costs to growth without the need to increase capital investment, as through customer relationship management and financial process management.

A key benefit that EDS gained from becoming a part of HP is the access to capital for revamping and expanding its capabilities. In return, HP has gotten access to higher-level interactions with clients that HP, with its engineering-technology heritage, was seldom able to obtain. In addition, EDS has deep knowledge of the IT trends its clients are pursuing and what it takes to keep up with those trends.

And what would any IT vendor strategy be today without the cloud? HP views the cloud as the next stage in the evolution of the Internet. That is, the Internet will be the means through which the "everything as a service" concept will be delivered. Those services range from compute resources to business processes to personal interactions, and must be delivered wherever, however, and whenever they are needed. That is a grand vision, but, whether or not the reality ever comes to total fruition, that is the the direction that the world is going and that vision helps focus planning and the allocation of resources over time.

That vision is reflected in HP's three cloud strategies: enabling cloud providers; helping customers secure, source, and govern cloud services; and delivering its own cloud services. Enabling cloud providers comes through extreme scale-out infrastructure design, delivery and support, such as what HP calls its Performance Optimized Datacenter (POD) solutions. The second strategy rests on activities including automating blueprints for improving infrastructures, applications, services, and business processes. So far as cloud delivery goes, HP is working on identifying anchor opportunities and cross business planning.HP brought a Performance Optimized Data center (POD) to the summit and offered tours. A POD is a 40-foot containerized data center that provides the equivalent of 4,000 square feet of traditional data center space, with the density to support up to 3,520 2P server nodes or about 12,000 hard drives. The utilitarian design (it does look somewhat like a container on a container ship except for doors and outside access panels) is not meant to win any architect awards. Rather it is meant to be built and delivered quickly by an 18-wheeler to a convenient location. Naturally, that convenient location has to have ample power, the ability to provide 240 gallons per minute of chilled water to a heat exchanger, and lots of network bandwidth. But due to its energy efficiency, the site requirements are typically lower than for an equivalent brick-and-mortar space.

David Hill is principal of Mesabi Group LLC, which focuses on helping organizations make their complex storage, storage management, and interrelated IT infrastructure decisions easier by making the choices simpler and clearer to understand.

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