HP revamps infrastructure strategy

Attempts to combat uncertain demand.

HP has reshuffled its server, storage, networking and data centre management product portfolio in a bid to make them more attractive to corporate buyers who continue to deal with uncertain IT infrastructure budgets.

The company has conducted research which it says shows more than 90 percent of companies feel business buying cycles will be unpredictable over the next few years, meaning all hardware and software vendors, HP included, need to find new approaches to selling.

Research company Gartner this week [2/11/09] published a report saying that 2009 represents the worst year ever for the IT industry, with end user spending down 6.9 percent compared with 2008.

Gartner is more optimistic about 2010 in as much that there will be no further fall in spending, but it says the overall market will not recover to 2008 revenue levels until 2012.

“For more than 50 percent of CIOs, the IT budget will be 0 percent or less in growth terms, and will only slowly improve in 2011,” wrote Gartner senior vice president Peter Sondergaard in a research note.

HP's newly named 'converged infrastructure' is an expansion of its former adaptive infrastructure architecture, which now encompasses physical and virtual server and storage network hardware, management software, and applications designed to help data centres monitor and control energy use in real time.

HP also released a new version of its Neoview Advantage data warehouse platform.

"This really builds on the Opsware acquisition [in 2007] by adding in a lower layer of management software to monitor and report on the resources being consumed [within the data centre]," said Nathaniel Martinez, program director at research company IDC.

"I am a bit dubious about any company saying they will offer bundles - it is not the right time for that. Most end users right now are having infrastructure upgrades dictated by purchasing policy, and people want as much modularity as possible to be able to compare prices."

A consolidation of offerings may help push more customers towards HP’s vast services portfolio acquired from EDS, however. The company has set up converged infrastructure consulting services to push the product set, whilst its Enterprise Services division offers outsourcing options around the same technologies.

"I believe business processes are key to enterprises, and HP is not pushing these yet. No doubt they will come into play later with the [integration of] the EDS acquisition and local domesticities," said Martinez.

HP rival IBM has successfully integrated hardware and software sales with service and business process offerings in recent years, while Dell indicated similar intentions last month with the acquisition of services and business solutions specialist Perot Systems in a US$3.9bn deal.

Like other IT vendors, HP has seen its profits fall due to a global slowdown in IT spending. Net revenue for the third quarter of 2009 was US$27.5bn, down 2 percent year on year, with profits down 14 percent to US$2.2bn.

HP has also cut 24,000 jobs globally.