HP Software Advances and Transforms

An HP Global Analyst Summit for the Technology Solutions Group (TSG) held in early April detailed the continuation of a transformation led by Mark Hurd, CEO, Ann Livermore, the head of TSG, and Tom Hogan, the top HP Software executive. The motivation for change is to be relevant in not just hardware, with servers, storage technology and related services and outsourcing aimed at helping CIOs to transform infrastructure to drive improvements in the efficiency of data centers. The question is how relevant HP Software will become in enterprises considering the growing role of enterprise software providers like IBM, Oracle, SAP and even Microsoft.HP Software's focus and investments are oriented to virtualization, operational BI, digital content explosion, content management convergence and data center transformation. HP Software has grown from 3,500 to 9,000 people over the last two years and from $1 billion to over $2.5 billion in revenue. The change in HP Software is quite significant, as it was just three years ago a collection of technologies like HP OpenView, which has since disappeared into lower-level capabilities. More than a dozen acquisitions, including Mercury, Opsware, and the recently announced Tower Software, have since been integrated into HP Software's two divisions: Business Technology Optimization (BTO), for IT management, and Business Information Optimization (BIO), for information management and business intelligence.

HP's intention is for the BIO division to get more serious about data management. This effort is led by NeoView, which is the data warehousing technology that has gained adoption by organizations including Canon, Bon-Ton Stores, 3M, Wal-Mart and others. NeoView is a data warehouse appliance that is designed for large-scale, high-volume data processing. HP also looks to gain a larger position in areas like event management and business process management, and it has stepped into the document and records management arena with the acquisition of Tower Software, which will strengthen HP's position on managing different types of content within the enterprise.

The challenge in understanding HP's emerging position is that it uses words like "business intelligence" when its focus is really more on data warehousing (with NeoView), and its definition of "information management" is really about document and records management. These definitions differ from the way the industry and majority of other software providers describe their products and categories, which will lead to a bit of confusion in the short term as HP positions their focus as a subset of the larger market.

Although the advancements by HP sound great, the mission of HP Software is to optimize business outcomes with business technology. For HP this starts at the infrastructure and data center level and then moves up to the management of content, data and applications. The idea is to help IT management reduce the complexity of technology and systems in the enterprise. HP is still working on articulating a strong position on helping businesses to utilize documents and data for better outcomes through tools and applications. HP has not yet fully articulated its role and whether this is business intelligence or performance management or just the usage of information in enterprise portals and search. HP is working on its strategy and evolution while trying to partner with software providers like Business Objects a SAP company, Cognos an IBM Software division, Microsoft, MicroStrategy and others to integrate across the enterprise.

As HP works to become even more relevant in enterprise software they are trying to underscore the importance of HP tools and applications while rationalizing the current dependence on partners to delivering the software for the critical last mile of value for business. To fully deliver on business outcomes and reduce cost, time and risk while innovating for business will require more acquisitions and further transformation of HP Software. Your organization's needs in BI and information management are maturing to meet the business demands from IT and beginning to understand the business role beyond just faster adaptive infrastructure and data centers for storing and managing data, content and records. It is critical for the future of HP to better blend an overall IT strategy that can balance their different approaches to technology.

As many of you know, the challenge is not to just move content and data into new storage mechanisms (like those from HP) but also to integrate that information through extraction, replication, loading and processing of data in place in current storage, database and application environments. HP currently does not offer software assets and capabilities for integration that are readily available from large suppliers like IBM, Oracle and Microsoft, and from dedicated suppliers such as Informatica and Tibco. The latter could be great acquisition targets for HP if not more strategic partners in the near future.

In HP's journey forward, it's essential for the company to be relevant both in helping organizations in managing IT performance and in improving business performance by delivering critical information. I believe HP needs to make further acquisitions to address information integration, access and usage needs supporting business decisions. Steps in this direction will give HP's content and data infrastructure a greater role in improving business outcomes.

Let me know your thoughts.The motivation for the transformation at HP is to be relevant in not just hardware, with servers, storage technology and related services and outsourcing aimed at helping CIOs to transform infrastructure to drive improvements in the efficiency of data centers. The question is, how relevant can HP Software become?