Reshaping HP

Hewlett-Packard Co. (HP)'s CEO is reorganizing the company and shaking up its executive team. In other news, HP announced that it is expanding its CloudSystem private cloud platform, and introduced new storage products and the Store360 common storage services software. Finally, HP announced its new EcoPOD data center, as well as filed a civil lawsuit in California against Oracle Corp.

Focal Points:

• HP's CEO Leo Apotheker is flattening and reorganizing the company, so that all CXOs of customer-facing units report into him directly. Most notably, HP announced that Ann Livermore will be stepping down from her job running HP's Enterprise Services unit, a $60-billion business that accounted for half of total revenues and encompassed two-thirds of total HP staff. Livermore will assume a position on HP's board, and will stay on as interim leader until a full-time replacement is named, said HP. Additionally, HP announced that Bill Veghte, EVP of Software, Dave Donatelli, EVP and GM of Enterprise Servers, and Jan Zadak, EVP of Global Sales, all of whom reported into Livermore, will now report into Apotheker. HP also said that Tom Bradley, GM of HP's Personal Systems Group, is taking on the task of spearheading efforts to grow HP's business in China, while Vyomesh Joshi, who runs HP's Imaging and Printing Group, is leading efforts in India. HP also announced the departure of several senior executives at the company. CIO Randy Mott, EVP and Chief Administrative Officer Pete Bocian, and SVP and Chief Marketing Officer Michael Mendenhall have left HP, effective immediately, according to the company.
• HP announced three new storage products – Ibrix (X9500) scale-out file storage, LeftHand (P4000) iSCSI storage area network (SAN) storage, and StoreOnce data deduplication software. All three products will be implemented using HP's new integration strategy, the Store360, said HP. Store360 uses a Linux operating system and will run on ProLiant and BladeSystem hardware to deliver the functionalities of Ibrix, LeftHand, and StoreOnce in a single system. In addition to offering a common version of Linux, Store360 will also provide common messaging and metadata functions and common reporting, HP added. Meanwhile, HP also announced that it is expanding its CloudSystem private cloud platform beyond internal, private clouds based on HP's BladeSystem servers to hosted, private clouds or public clouds run by service providers. The CloudSystem Service Provider edition is for telecom companies or hosting providers that are building public or hosted private clouds for customers. HP is offering the suite in small, medium, and large configurations, although setup and pricing details have yet to be released. HP also announced a cloudbursting capability called Utility Ready Computing. Service providers who wish to offer this capability have to join the HP CloudAgile program and become certified, HP added. Current members of the CloudAgile program include Axcient, Inc., Datapipe, Inc., Harris Corp., NaviSite, Inc., OpSource Inc., Savvis, Inc., SHI International Corp., and Verizon Communications, Inc.
• HP unveiled the new HP Performance Optimized Datacenter (POD) 240a, also known as the EcoPOD. The EcoPOD is part of HP’s "Instant-On Enterprise" strategy, and can be delivered in as little as 12 weeks. With an overall size of 23 feet, 9 inches wide by 45 feet long, the EcoPOD is shipped in sections and assembled on site, said HP. It costs $8 million, has approximately a thousand square feet of white space, and can operate with a power usage effectiveness (PUE) of 1.05 to 1.30, the company added. HP is offering up to $2 billion through its leasing and asset management subsidiary to help clients finance their EcoPOD investments. Finally, on June 15, HP filed a civil lawsuit in California against Oracle. HP is seeking the court's assistance to compel Oracle to reverse its decision to discontinue future development of Oracle software on the Intel Corp. Itanium platform. According to HP, Oracle's decision violates legally binding commitments that the software vendor has made to HP and the 140,000 shared HP-Oracle customers. HP is also asking Oracle to reaffirm its commitment to offer its product suite on HP platforms. Both HP and Intel have said that they remain firmly committed to the Itanium roadmap.

Experton Group believes HP is being buffeted about by internal management changes, product transitions, market changes, revenue pressures, a new corporate strategy and a frontal assault by Oracle. This rough patch can be expected to last for a number of quarters while HP sorts through its challenges and makes adjustments. On the positive side, the company has strong leadership, dedicated employees and an innovative culture that keeps developing and launching leading edge products and solutions. For example, HP CloudSystem's dual bursting capability provides one-touch self-service provisioning of applications on local infrastructure or HP Enterprise Cloud Services-enabled Service Providers anywhere in the world. IT executives should expect HP to weather the storm and, over the next few years, make (finally) the transformation to being known as a provider of software and high-end professional services.