LAS VEGAS – Like most large multi-nationals, Hewlett-Packard (NYSE: HPQ) can be challenged to orchestrate its different verticals, which ranges from business-focused products to end user-user focused personal devices. Distilling the range of objectives can even be complicated to digest, even for HP’s employees – and that’s why HP President and CEO Meg Whitman’s presentation at the HP Discover event highlighted the company’s foundation in infrastructure was a hit.
HP has built upon its “HP Converged Infrastructure” theme that encompasses offerings for enterprises, including storage, servers, networking, management tools and others. It also serves as the basis for the “Converged Cloud” services that the company announced last month.
At HP Discover 2012, the company unveiled several releases in storage, printing, cloud and security areas that address efforts toward this goal. At the same time, however, when presented all together the commonality can become confusing. To this end, even as HP tried to present a cohesive message, the sprawling nature of its operations sometimes made it difficult for audience members to grasp.
(Editor’s note: EMC has responded to HP).
It became clear HP is looking to surpass EMC. By spending so much time on EMC, it also seemed that the company was downplaying competition with IBM and Oracle. While this is unlikely, it would have been useful to see more examples of how HP plans to take on these two giants.
Beyond EMC, HP talked about cloud strategy, specifically its new product releases. Last April, HP made its big cloud announcement. During the Discover event, the company announced several tools designed to expand its portfolio, including:
- An offering toaccelerate application innovation for the cloud and to increase collaboration
- An expansion of CloudSystem with solutions and software to unconstrained access to technology through an integrated architecture
- Cloud services focused on airlines companies
- A new software offering to enhance mobile monitoring and increase collaboration between operations and development teams
- HP introduced HP Cloud planning services to help clients increase IT agility by adopting a converged cloud model.
Through these enhancements, HP acknowledges that it must move towards a mix of offering public, private and hybrid cloud-based services if the company aims to compete with major (and established) players such as Amazon.com and Google.
Clearly, a mix of hardware and services is what HP seeks to achieve. This has been evident since its $13.9 billion purchase of EDS in 2008. However, making the transition to a more services oriented company has not been a smooth one.
“In 2008, with the acquisition of EDS, HP sought to position itself as a major player in the services segment, which is recurring revenue and profit rates are higher. The big question is that since the acquisition, HP’s service area, called Enterprise Services (ES) has difficulties settle in again and is getting a makeover team, focus, strategy and portfolio,” noted Bruno Pagotto Tasco, research analyst at Frost & Sullivan.
Following recent turmoil, it is clear that HP needs to send a more cohesive message to the market with respect to its ability to execute on its core strategy.
“Meg Whitman aimed to eliminate the noise generated with all the announcements made by the former management in 2011. Those announcements have caused financial losses and left the market suspicious about HP’s ability to regain focus,” noted Tasco.
Currently, and evident by its recent restructuring, the company remains in the relative early stages of executing on this strategy. This is not to say that HP can’t pull it off. The company has a number of advantages at its disposal with which to pull off the turnaround.
“HP is recognized as one of the major IT players in the world and with very well established presence in the market for hardware (printers and PCs), but the service still leaves much to be desired in terms of supply and structure. There is much opportunity in the market and HP has great potential for cross and up sells their hardware solutions and services,” said Tasco.
HP provided travel expenses to this event.