What can HP deliver to the enterprise?

Beyond all the rhetoric, what is HP's formula for solving the IT cost and complexity problems in today's organizations? Dan Farber speaks with HP chief strategist Shane Robison about the company's strategy for aligning technology and business objectives.
Written by Dan Farber, Inactive

I've heard numerous speeches from Hewlett-Packard CEO Carly Fiorina about HP's vision for the enterprise: Only HP can deliver a full value proposition encompassing optimal pricing, reliability, security, manageability, adaptability, innovation, and connectivity. Or, HP can deliver low cost and high tech simultaneously, and provides a superior total customer experience.

For contrast, Fiorina describes IBM as high tech, high cost and with a mediocre rating for customer satisfaction. Dell is low cost, low tech, with good customer relationships.

Certainly, it's the job of the CEO to position the company in a favorable light, in black and white if possible: HP good, IBM bad, Dell a low-end packager and distributor that doesn't invest in innovation. But, CEOs and CIOs don't buy into these flip competitive assessments.

Dell's track record, for example, indicates that a lower cost business model, based on standard components and leveraging the R&D of companies like Intel and Microsoft, has high value for customers. If IBM is so high cost and mediocre in customer relationships, then how does the company book billions in IT outsourcing deals.

Are all these large companies outsourcing to IBM, entrusting their IT future to IBM, just stupid?

CEOs and CIOs writing big checks want to know beyond all the rhetoric what HP stands for, how well the company understands the needs of large enterprises and industry verticals, and what it can deliver. They basically want to know HP's formula for solving the IT cost and complexity problems in today's organizations as a precursor to acquiring any specific product or service. The concepts that Fiorina articulates as part of HP's adaptive enterprise and Darwin reference architecture are common among all the major enterprise vendors. So, what is HP's center of gravity and unique selling proposition? And is it much different from the IBM, Sun, or Microsoft belief systems?

I met with Shane Robison, HP's executive vice president and chief strategy officer, to get a better sense of HP's center of gravity. Robison has his hands in every part of HP's business, with a flock of direct reports spread out across the company and advisory boards providing feedback to help steer the $70 billion company's longer term strategy across enterprise and consumer markets. He is the chief navigator, making sure the potentially sluggish HP vessel catches favorable winds and leverages the $4 billion investment in research and development.

Robison characterized HP's strategy--which attempts to align technology and business objectives--as a "portfolio" and a "partnership" play. On the portfolio side, HP has a broad range of products and services aimed at different markets and industries. On the partnership side, HP has 14 major alliances, including companies such as Intel, Microsoft, Oracle, SAP, BEA, Samsung, Accenture, Deloitte, and BearingPoint. Each major partner relationship is managed by HP staff reporting to Robison and HP marketing chief Mike Winkler.

HP made a strategic decision to shutter some product development areas and to double down on others. For the enterprise business, the company hooked up with Intel on Itanium processors, withdrew from the middleware software business, focused on automating the data center and doubled down on its management software (OpenView) and document management and production technologies.

Robison also described HP as a "general contractor," providing the integration of all the piece parts and acting as the single point of contact for installing and supporting heterogeneous solutions.

Perhaps that notion of a general contractor is the best way to characterize HP's center of gravity as a solution provider. Fiorina claims that HP can do it all for customers compared to rivals, but implicit in that statement is HP's ring of strategic partners and the "buck stops at HP" integration approach.

Is HP fundamentally different from rivals in its general contractor approach? On the surface, all the major vendors and consultancies say they are focused on reducing cost and complexity, and on helping customers get more out of their current IT investments. They promise to take on the enterprise integration task, increase utilization, and lead the charge to open standards-based computing.

Given that HP doesn't offer its own end-to-end software stack, like IBM's WebSphere, Sun's N1 or Microsoft's Windows, the company has less of an agenda to push its own wares, and is betting that open standards will ease the pain of integrating heterogeneous systems. In fact, HP professes a more agnostic middleware philosophy. HP supports both J2EE and .Net platforms in its offerings, whereas Sun and IBM are firmly in the J2EE camp and Microsoft is in its .Net world.

The longer term future for software infrastructure, according to Robison, involves moving from Web services to grid services, the next phase of standards and protocols for delivering both hardware and software as a service. "Web services are a precursor to grid computing," Robison said. However, he cautioned that grid computing for commercial applications in its infancy. "The theory is really good, but most deployments are non-existent."

HP plans to grid-enable its entire portfolio within the next 18 to 24 months, according to Nora Denzel, senior vice president of software for HP. "This is our stake in the ground," Denzel said. HP has recently launched consulting services, extensions to its OpenView management software, a Grid Resource Topology Designer, and utility computing services compatible with grid standards.

IBM, Sun, Microsoft and others are following a similar path, cobbling together a portfolio of products and services to address the nascent commercial grid market.

HP has also made some acquisitions to fill out its own product portfolio. The company recently acquired Baltimore Technologies' SelectAccess technology, which provides role-based identity management services, and Talking Blocks, a service-oriented framework for managing Web services.

Does HP's general contractor approach--combining its enterprise product portfolio, strategic partnerships and migration to open standards--add up to a coherent, differentiated philosophy, a palpable center of gravity? Somewhat, given HP's more agnostic software stance. But the proof, as always, is in how the company executes on its low cost, high tech, happy customer formula.

Trying to encapsulate any company's center of gravity in words like innovative, customer focused, low cost/high tech or general contractor will always seem flimsy and insubstantial. I asked Robison more specifically to zero in on HP's fundamental differentiation from its biggest and strongest rival, IBM. "Our biggest enterprise customers want and need an alternative to IBM," Robison said. "You can't underestimate being an alternative."

In a consolidating enterprise technology landscape, being an alternative isn't exactly an inspired center of gravity, a point of greatest importance. Robison's appraisal is pragmatic--a credible alternative to IBM at a time when customers can't easily differentiate among complex offerings and fear vendor lock-in can be a galvanizing force. On the other hand, "alternative" has a resonance of "second choice."

It may be that HP's center of gravity--or any other company--is a moving target, and the company's success will be tied to its ability to adapt to changes that the market and customers dictate. From that perspective, HP's notion of the adaptive enterprise—or even IBM's on demand initiative--is geared toward having an IT infrastructure that effectively supports moving targets. The challenge for CTO Robison will be implementing the company's adaptive enterprise blueprint for his own needs and, more importantly, identifying where to steer the wide-ranging ship.

Write to me at dan.farber@cnet.com. If you're looking for my commentaries on other IT topics, check the archives.

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