Since you acquired Mercury, HP has been touting its software business. Why is software so critical now?
We are excited about our software strategy. It’s become a real centre point for us, and all the services capabilities we have around it. We see an opportunity for HP to be the company you think of to automate IT. We’ve launched this Business Technology Optimisation portfolio, which brings all of the OpenView assets, the Mercury assets and the assets of other acquisitions we’ve done over the past two or three years into this portfolio, and we have a market lead position in each of the functions.
The strategic significance of IT automation is big. The least automated part of most companies is IT. It’s almost like the shoemaker’s children. Customers automate ERP, they automate sales activities, closing their finances and they automate HR. And then you step back and say, how many companies have automated IT functions? Not many.
Most have combinations of small company software that is not very well tied together.
How are you going to move customers from bits of automation here and there to a fully automated IT environment?
We are focused on how you build what we describe as self-managing datacentres. Taking this idea of software automating IT, we think there is a whole new approach to how you build datacentres that take a lot less labour to manage. It gets back to the same core problem that 65% of most budgets go towards operating IT and how do we help drive the labour costs down dramatically.
Where do customers stand in terms of automating operations today?
Most companies are not very far along. There are a few examples that we think are real showcases. And we want HP’s IT to be a showcase. We are consolidating our datacentres into six centres, three pairs. We’ll have some of our big Integrity servers in there for specific applications, but 60-70% of the new environment will be a bladed architecture. And we’ll have the power and cooling done in such a way that we believe we’ll save as much as 40% on those costs.
Where do the savings come from?
What we have seen is that by doing a thermal assessment and a site plan with our services capabilities, then deploying our Dynamic Smart Cooling technologies, customers can save, depending on their environment, anywhere between 20% and 40% of their datacentre energy costs.
What’s more, you can’t take advantage of a bladed environment unless you can manage the power and cooling. And a bladed environment provides the mechanism to more highly automate. If you think about the enclosure, having built in the storage and server blades, the management software and the virtualisation software, the network devices, it’s a significantly less labour-intensive environment to manage with employees. And then the management is where a lot of the automation comes in. This is where our whole portfolio of software plays an important role. Virtualisation is a big component of it as well.
How is virtualisation changing the management picture?
It starts to get interesting when you think about a more virtualised world where the storage, the networking, the systems and servers are more combined. That’s what we are trying to build into management software. It is not the network device, the storage or the server — you are managing the infrastructure and it’s going to be virtualised.
And then you further complicate the picture by stirring in service-oriented architectures (SOA).One of the things we got with Mercury was a company Mercury had acquired called Systinet. The Systinet functionality is part of our software portfolio now and it’s focused on SOA management. It’s a pretty big technical problem to set up the governance and the dependencies and bring in the management toolset to manage the environment. We’ve got some functionality inside our software associated with that.
It’s both in the SOA management and then in the applications toolsets, both with the quality tools as well as the performance tools. We have also teamed with SAP around their enterprise SOA activities and with Oracle around some of the work they had done as well.
When companies modernise applications, we want our management toolset to be the toolset they use to manage that SOA environment. That is part of what we tell customers: as you are looking at SOA and virtualisation, you have to be thinking about how you are going to manage it.
We think SOA and virtual environments require a whole different set of tools and we want to be positioned to lead that.
What do you make of vendors such as Cisco talking about playing a bigger role in management?
I think there is going to be a lot of movement and overlap between all the players. What functionality gets sucked into the operating system, what functionality is sucked into the application or into the network devices is unclear at this point. But for us that is one of the most important things we watch in the marketplace — which one of your partners suddenly becomes a competitor.
Does HP consider management software from Cisco a threat?
Within [IT management] we look at operations management, network management, change and configuration management, application management and IT service management. You have to presume Cisco will do more on the network management front and that is just a sliver of the things the CIO cares about. And if our toolset can give the CIO a unified view of the whole management environment, the servers, the storage, the networking, we think customers are going to prefer the single pane of glass.
At the same time, we are pragmatic. People have a bunch of stuff so the stuff we have has to work with the stuff they have already got.
Cisco would argue the network has to be smart. What do you think?
What customers tell us they want is a fabric that provides unified management across all these pieces. That is what we have been trying to build. What data we are provided by all the components and devices that are being managed, we are not as clear about. The more data there is the more we will use. But we don’t have a picture there. We are not sure what people are going to end up doing.
It comes down to where is the value to the customer such that people will pay for it. We can’t pinpoint one thing over the other, which tells us we have to deal with both kinds of environments.