HP goes on an IT infrastructure diet

HP goes on an IT infrastructure diet

Summary: Hewlett-Packard CIO Randy Mott plans to cut the company's global data centers from 85 to 6, collapse more than 762 data marts to 1 enterprise data warehouse and whittle the company's application portfolio from 3,500 to 5,000 to 1,500. The goal: Provide data to help HP become more efficient and keep CEO Mark Hurd happy.

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TOPICS: Hewlett-Packard
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Hewlett-Packard CIO Randy Mott plans to cut the company's global data centers from 85 to 6, collapse more than 762 data marts to 1 enterprise data warehouse and whittle the company's application portfolio from 3,500 to 5,000 to 1,500. The goal: Provide data to help HP become more efficient and keep CEO Mark Hurd happy.


And he has to do that by eating his own dogfood. After all, if HP is successful it can pitch customers on using the same techniques. In other words, Mott is one part CIO, one part guinea pig and one part juggler. "As we look at the environment we have it's about doing a number of things at the same time," said Mott.

Mott, speaking at HP's securities analyst meeting in New York, said that even though the price of technology is falling, companies are still spending more. "That might be good news if were actually producing for companies," said Mott.

Here's a look at Mott's five initiatives, which are targeted to be completed over 3 years:


--Portfolio management: HP needs to focus on the most important projects for company. Biggest mission: Paring legacy applications. Projects scrutinized under ROI goals. However, Hurd declined to name IT costs as a percentage of sales or an ROI figure. "We have a lot more to do in IT to get where we want to go," said Hurd.

--IT workforce effectiveness: Optimize headcount so 80 percent is spent on development and 20 percent on support. Currently, less than half of HP's IT workers are focused on innovation. The rest are supporting HP's existing environment. Another goal: Run HP's infrastructure with 90 percent of its own employees.

--World Class IT: Set benchmarks that HP can take to customers. HP gets more efficient. Services unit gets a sales pitch.

--Enterprise data warehouse: Sharing data across HP units and partners. Goal: 762 data marts to 1 enterprise data warehouse. The target date for 1 enterprise data warehouse is July 2008.


--Global data centers. Use HP's own technology to get down to 1 global network and 6 data centers. Other goals on the data center front: Retire 60 percent of legacy apps; cut servers by 30 percent but get 80 percent more processing power; decrease cost of storage yet double capacity; half networking costs but improve bandwidth by 30 percent; and cut HP's IT costs by an undetermined amount. HP is utilizing its Neoview technology to revamp datacenters in Houston, Austin and Atlanta.


Mott said his overall goal it to automate as much as HP's IT infrastructure as possible.

The risk: HP on one hand is telling customers to buy more gear yet consolidating with a smaller footprint internally. Bear Stearns analyst Andy Neff asked Hurd about the potential for mixed signals.

Hurd replied that he wasn't worried because if HP delivers on its internal strategy it will be set up nicely to grab more wallet share with customers. In addition, HP is also setting itself up to cut capital expenditures in years to come.

"We are spending cap-ex for a better long run position," said Hurd. "Too much IT is showing up in labor. Everyone is going to have to do this."

Topic: Hewlett-Packard

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  • That's IT's problem; too many people.

    Quoting:
    "We are spending cap-ex [making capital expenditures] for a better long run position," said Hurd. "Too much IT is showing up in labor. Everyone is going to have to do this."

    Apparently, much of what HP does is not actually necessary; the idea is to have fewer people because they do less work. The changes will occur as number of projects is reduced. And the work is to be done in-house, rather than with consultants.

    Forget efficiency; this is eliminating workload in a comparatively short time.

    I wonder what HP will lose in its rush to shove people out the door. And I wonder what kind of "innovations" the survivors will produce in the time freed up.
    Anton Philidor
    • Good point Anton

      I think Hurd's argument was that these people could be focused on more productive activity (such as development). We'll see how it plays out, but connecting the dots more automation means less labor and headcount.

      The big question I have and one that wasn't effectively answered is the following: If everything gets automated, and datacenters cooked down to just one per company what exactly is HP going to sell?

      It's a bit premature since it assumes everyone will actually get super efficient, but it is one of those things that make you go hmm. Cheers.
      Larry Dignan
      • Automating takes time...

        ... and creates projects and requires people to do the automating. Given the list of tasks and the statement by the CTO in prior reports that he recognizes he has to work within a CEO's average 5 year tenure, I can't see this project as implementing a new way to do things.

        The likely plan is to eliminate people by eliminating what they work on.

        If that's true, then this effort is not a sales problem. Each company decides for itself what IT should do. Though if a company does decide to attack IT headcount, HP does have a model, albeit one that will not be immediately applicable.

        So the only problem for sales would be if the fast slash and burn approach has accidentally eliminated something useful.
        Anton Philidor