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March 31, 2008 2:10 PM PDT

Newsmaker: Why HP is different from IBM

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But you do see virtualization on the desktop becoming more popular?
Livermore: Absolutely. We believe that for security reasons, for performance reasons, cost reasons, any of those can be compelling reasons for a virtualized desktop--or a thin-client accessing the services you need from that device.

Could this be ideal for blades?
Livermore: PC blades can be an implementation of virtualization. HP made an acquisition a year ago of Neoware for our PC business to give us the capability to have a virtualized client environment. So we feel good about our blade business. Half of all virtualized environments are blades, so when people are thinking of virtualizing, very often they end up with a blades environment. That places us in a strong position.

Do you see yourselves making many acquisitions? What is the strategy here?
Livermore: HP made 23 acquisitions over the past three years and on a continuing basis we are making decisions about whether we want to build something or (link) with someone in the industry or a partner or do we want to acquire the technology to be ours inside HP (all the time).

One of the strengths of HP is the strength of our balance sheet. We have a lot of cash and one of the results of that is the strength of our position to make acquisitions when they make sense.

How much cash do you have for buying?
Livermore: Cash can be used for lots of different purposes. It can be used for M&A or for investments inside the company, or share buybacks or dividends. We have a lot of different uses of the cash. We never talk about any specific targets, or categories or size of the fields.

Are you seeing the green agenda with customers and do they see that in terms of savings, cost reduction?
Livermore: Yes, there is a question of whether the "green" refers to the environment or money. Businesses need to have a cost justification for almost everything they do, and the best outcome is when you have something that is both good for the environment and good from a cost perspective.

We have put a lot of focus behind power and cooling because we believe that from a data center perspective, being able to reduce the energy consumption is a cost reduction for our customer and it is also good environmentally, and we believe that is one of the key areas of focus for most businesses. So we invented some technology called Dynamic Smart Cooling. It can reduce the power consumption by 40 percent. We implemented it in HP in our new data centers, our three pairs of data centers, and we are going to reduce it by about 60 percent of our energy consumption.

That is just a huge effect and we think it is one of those examples that has both a cost benefit as well as the environmental benefit. That is a big focus...and you will see us continue to focus on what we can do to reduce the power and cooling requirements in data centers.

But do you pass the cost onto the customer?
Livermore: Typically our revenue comes from either a consulting engagement to set up the whole cooling or some of the technology we can sell into the environment and then the customers catch the cost savings themselves. So they have to measure the return they make on the investment in services and technology but the ongoing saving is theirs.

How big is your software business?
Livermore: It is over $2 billion.

You developed software for helping customers implement SAP and Microsoft Exchange straight out of the box and tailored for different markets. What is the thinking behind these products?
Livermore: Many companies don't want to take the time or the effort to build the next-generation data center for themselves and what they would love to do is almost the equivalent of plugging in the wall and having service delivered to them. Except that with the wireless capabilities we have today, you wouldn't even have to plug it into the wall.

So what they are really interested in is how can they use the application and do it in such a way that they don't even have to make any capital investment (and can) pretty much just turn it on immediately. So for those companies who are willing to pretty well, straight-up use an application, a standard version of it, these are two good offerings for them.

Originally we thought this was going to be mainly attractive to small- and medium-size customers, but what we also see is a single business unit, or perhaps a single geographic location (may be interested). Or perhaps a large enterprise customer will be willing.

Do you see the company doing this with others, other than SAP and Microsoft?
Livermore: That's our intention. Start with these two and see how it goes. The condition of this kind of service is how willing the users are to have a standard application package. And we know there are SAP and certainly Exchange customers who are very happy with the standard app.

Colin Barker of ZDNet UK reported from London.

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outsourcing, HP, data center, IBM Corp., virtualization

Add a Comment (Log in or register) 8 comments
Green, you say?
by Graeme L April 1, 2008 6:55 AM PDT
HP's entire business model is, surely, all about consumption: -

- printers -> disposable cartridges -> ink -> all of which begets, um, paper. HP environmental credentials are very poor indeed when you think about it.
- On top of that, the whole laptop/desktop business creates enormous wastage.

Virtualisation doesn't make up for this.
Reply to this comment View all 2 replies
outsource
by tinasilvee April 21, 2008 2:18 AM PDT
Outsourcing has so many benefits:
1) Cost Savings
2) Time Zone Benefits
3) Quick Turn Around Time
4) Standardizing Business Processes
and many more....

http://www.outsourcewebsite.com
Reply to this comment
by bernie.mcginn May 6, 2008 5:20 PM PDT
really interesting!
Reply to this comment
by bernie.mcginn May 6, 2008 5:22 PM PDT
interesting
Reply to this comment
by cnettester2008 October 9, 2008 2:09 PM PDT
interesting
Reply to this comment
by cnettester2008 October 9, 2008 2:17 PM PDT
interesting
Reply to this comment
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