HP: We learn from Indian services providers
The biggest names in outsourcing can take a leaf from the fast-rising Indian players, but traditional services vendors such as Hewlett-Packard should not worry about being overshadowed by them, says a HP executive.
Steve Smith, senior vice president of HP Services, told ZDNet Asia in an interview that it is "hard to compare an HP to one of the [Indian] companies".
"The Indian companies are very strong and [we should] pay attention to [them]. We don't take any of these competitors lightly," he noted. "If you look at the market capitalization, these are very big prominent [Indian] companies. But if you look at the amount of skill sets and the number of data centers, call centers, operational centers against [the level of] scale and reach, they just don't compare to the big infrastructure and applications capabilities that companies like us and IBM have."
Smith was responding to recent news that five Indian companies were among the top 10 global services providers listed in the Black Book of Outsourcing study, which was conducted by consulting firm the Brown-Wilson Group.
Conspicuously missing from the top 10 ranking were traditional big players such as Accenture, EDS, HP and IBM. Among these names, HP was ranked highest at 13.
Smith said he was not aware of any top Global 1000 company that has picked an Indian company to manage "all of their infrastructure and their applications in a full-scale outsourcing deal".
The HP executive, however, acknowledged that there were lessons HP, and other traditional big players, could learn from their Indian counterparts.
Smith explained: "They started as basically project-based and applications-focused, where they can differentiate on their methodologies [and] their tools... They had special intellectual property around how to do that.
"[The main advantage they held] emanated from a low-cost delivery location, obviously," he said.
Similarly, HP had made its move to low-cost delivery locations, said Smith. Nearly 40 percent of HP's services business today is located in the company's nine largest offshore centers around the world.
Moving forward, Smith noted that the IT vendor will stay competitive in today's multisourcing environment--where companies engage multiple providers to service various components--by focusing on "mid-range and server" bundles.
Said Smith: "We're going to be very strong [in the desktop, server areas] because we manufacture those types of capabilities, and we can obviously price them more aggressively than our competition.
"We understand the evolution of [such] technologies; we know how to refresh them," he added. "In those areas we have research and development, we have scale and [can manage] complexity, and we have software and services wrapped around them.
"So we won't bid on [every bit of the services tender]," Smith said. "We'll just go up to specific areas that we feel we strong in… We've won multiple recent deals by just bidding on a piece of a deal, and even the pieces are very large on those big ones."