HP zeros in on converged data centers

Wide portfolio and supply chain efficiencies make HP's new offering to enterprises more relevant than "hobby" competitors, according to Asia-based exec.
Written by Vivian Yeo, Contributor

SINGAPORE--A wide portfolio and efficient supply chain will make Hewlett-Packard's new converged infrastructure model a compelling proposition for enterprises, according to a company executive.

Adrian Jones, vice president and general manager for enterprise storage, servers and networking at HP Asia-Pacific and Japan, said in a media briefing Wednesday the latest development was in response to a changing market and the realization that HP could "do a better job driving home the [convergence] message than anyone else".

Citing a recent HP-sponsored study, Tokyo-based Jones noted that over 90 percent of senior executives believe business cycles will continue to be unpredictable over the next few years. In addition, about 80 percent indicated that innovation and flexibility were critical ingredients in their IT environment.

The study involved 587 senior and business and IT executives globally, of which over 200 were from the Asia-Pacific region.

Converged infrastructures, said Jones, were key to organizational flexibility and elasticity. Announced last week, HP's Converged Infrastructure Architecture refers to a suite of products and services, including enterprise datawarehousing offering Neoview Advantage, that aim to help manage IT sprawl within enterprises. The new focus succeeds the Adaptive Infrastructure branding that the company had used for a number of years, he added.

Quoting IDC market estimates, Jones said the converged infrastructure market would be worth US$35 billion globally by 2012.

Serious player among hobbyists
The company's broad portfolio makes for a compelling proposition to customers in their quest to devote more of their IT budgets to technology innovation rather than upkeep, he said.

Because of its play in a variety of market segments including PCs, servers, storage and networking, HP has been able to gain supply chain efficiencies, he added. For instance, the company's PC and server lines share about 80 percent of common parts or industry-standard components. That proportion is much lower when taking into account storage and networking segments. However, the company is targeting to eventually have 80 percent to 100 percent standard components across its supply chain.

Dismissing the competition for being unable to generate HP's cost model for customers, Jones said HP "thought of [these competitors] more in the hobby market". In a reference to IBM, he noted that HP's biggest rival in this aspect "lost leverage overnight" when it sold off its PC business.

Jones added that HP had many competitors in the various market segments, but no single company could match its portfolio and supply chain. The company's new strategy, he pointed out, was a result of striving to meet dynamic customer needs and not to manage competition from the likes of Cisco Systems. The networking giant announced its Unified Computing System initiative earlier this year and last week--the same day HP unveiled its new converged tools and services--announced a joint venture with EMC and VMware to sell an integrated data center product.

"We have competitors in HP every day, it doesn't matter who it is," he said. "We don't change our strategy just because a competitor comes in."

"I think it's the other way round--everyone's main competitor is HP."

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