HP unveils ambitious targets

Vendor introduces utility computing strategy and details aggressive software business goals

Exactly one year on from its merger with Compaq, Hewlett-Packard (HP) has introduced a utility computing strategy and laid out aggressive targets for its software business.

The vendor's Adaptive Enterprise initiative, unveiled at its Business Perspectives conference in Malta last week, comprises a set of hardware, software, tools and services aimed at building highly responsive IT infrastructures.

HP's Adaptive strategy will compete with existing utility computing offerings from Sun, Microsoft, IBM, EDS and Computer Associates.

"We want to be the alternative to IBM," said Peter van der Fluit, HP's vice-president of software sales.

"This is good for the channel. Where IBM might take £9 out of every £10 and give just £1 to the reseller, we can offer the channel more."

However, James Governor, principle analyst at consultant RedMonk, said large enterprises were the first target for utility computing, rather than areas where the majority of the channel sold.

"Vagueness will not cut it in the channel," he said. "There are problems understanding utility computing at the high end at the moment, so what are the chances of mid-range companies and resellers with smaller resources being able to understand this?

"Vendors have to come up with simple packages and stories to sell to mid-sized enterprises and their channels."

Will Cappelli, analyst at research firm Forrester, said HP had been early to market with some elements of this strategy, launching Utility Data Centre in 2001.

Adaptive Enterprise's launch, he said, was more to do with the vendor's competitors. "I wouldn't necessarily see Adaptive Enterprise as a revolutionary announcement," he said.

"This is furthering and slightly differentiating HP in a crowded market. IBM has been the most effective in marketing its flavour of utility computing."

Cappelli said the utility computing concept had caught on with vendors "because, unlike many other technologies, this is at least designed to address corporate needs".

While HP is not aggressively pushing its Adaptive strategy yet, the vendor has announced bold plans for its software business.

HP has set sales targets of 100 per cent growth for its OpenView business this year, and is relying on its resellers to drive the growth.

"I see no reason why we should not double our business in the next year," said Cesare Capobianco, general manager for HP's Enterprise Systems Group software division. "This is a challenge I want to propose to our partners and issue to the market in general."

Capobianco said the target was realistic, and that he would grow the market by targeting the customers of other vendors. HP sources have singled out Computer Associates as the firm's main target.

Resellers were bullish about the targets. "I don't think the target of 100 per cent growth for HP software is that unrealistic," said Paul Cash, managing director of reseller Partners in IT.

Morse and Partners in IT are the only resellers that can buy direct from HP. "We are enthusiastic about the potential of OpenView and the service management market in general," Cash added.

Mike Beale, consultancy director at reseller Fox IT, agreed. "The people at HP we deal with haven't really changed as a result of the merger, but there are plenty of benefits to having Compaq on board," he said.

"But due to the nature of services management [around OpenView], it's difficult to simply run out and get more customers. Getting a new customer is hard work."