HP centre could bring $40m a year to Christchurch

Centre of excellence to become part of global development network

Hewlett-Packard is upgrading its development centre in Christchurch to become part of its 'best-shore' development centre network in a move that could bring millions in benefits to the city.

National application services manager Alex Bouma says today's launch was the fruition of something and the start of something he hopes will bring major benefits to the city, the corporation and to New Zealand.

Christchurch mayor Bob Parker opened the centre, which could over the next year or two house hundreds of developers.

HP has moved into a refitted warehouse building that it says can be expanded as demand grows. While not prepared to be specific about either current staff levels at the centre or future expansion expectations, Computerworld counted around 50 developers at work at the centre today. Bouma indicates this is expected to grow fast and the first round of recruitment is already under way.

Bouma says the aim is to deliver the right services at the right price at the right location and sell these around the world through HP's network. The Christchurch centre, he says, is a 'near-shore' facility aimed at the Australian and New Zealand markets and also Asia-Pacific and Japan.

He says Christchurch could deliver such services at a competitive price and with less risk than many other locations.

Parker and the Christchurch Development Corporation (CDC) commented that it was good to see foundation investment in dark fibre for the city paying off in helping to deliver the kind of environment companies such as HP find attractive.

Bouma acknowledges the efforts of the CDC in helping build the business case for the investment.

The centre will primarily focus on work in the government and telecommunications industries, but also has expertise in national identification system, such as e-passport and identity card systems.

HP develops both Java and .Net software at the centre.

HP's Asia-Pacific and Japan VP of application services, Eric Clark, says 300 global clients are serviced out of the network of 'best shore' centres, which have a portfolio of 20,000 applications. New Zealand fits well with this "follow the sun" approach, he says, having a significant time difference to other centres.

University of Canterbury vice chancellor Rod Carr, formerly CEO of Jade, says the university is partnering to help provide the skills needed to staff the centre. It is both a customer and a partner of HP on other fronts as well, including the NZ13 innovation centre.

Carr says around 900 students study maths at the university and 300 study computer science. Further, another 900 study accounting, finance and information systems in the business school.

Bill Luff, the CEO of the CDC, describes the centre as a "major asset to the region".

He says Christchurch offers lifestyle benefits to skilled people while also having the critical mass to sustain a centre such as the HP one.

"ICT is a priority sector," he says. "It generates high value jobs for a skilled workforce.

"Christchurch Inc is doing all it can to support that."

Luff says economic modelling shows that, at full capacity, the centre could boost the region's GDP by $40 million.

Mayor Parker says Christchurch has ten years to get it right before it is "killed by demographics". Getting it right means attracting and retaining a young workforce as the population ages.

He told Computerworld no rate or other incentives were offered to HP to secure the deal. Such arrangements, he says, temporarily distort the market and are not good for building a long-term relationship.

The centre started 24 years ago as part of Digital Equipment, which was acquired by Compaq in 1998. Compaq was acquired by HP in 2002. Bouma, a Digital veteran, says expertise in Digital's VMS systems remains part of the centre's portfolio.

— Rob O'Neill flew to Christchurch as a guest of HP

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