News

HP Intends to Reinvent the IT Game, Fiorina Promises

• By Scott Bekker
• 10/16/2000

In a clear departure of its hardware strategies of the past, HP has been aggressively stepping up its role of role of infrastructure and services providers to ASPs and corporations. Carly Fiorina, president and CEO of Hewlett-Packard Co., outlined HP’s new strategy to expand into IT and e-business services at Monday’s keynote session at the GartnerGroup ITXpo currently taking place in Orlando, Fla. Since taking the helm of HP last year, she scrapped HP’s corporate structure of separate business units in favor of a more unified structure that will promote its E-services offerings.  When she took office, “HP was a broken business,” she said. “It was a business with a huge capability, but did not know its strength.”

A pending acquisition of PriceWaterhouseCoopers is part of HP’s aggressive drive into e-business services, she says. While the deal is still pending, Fiorina noted that there is considerable synergy between HP and PWC’s strategies. “We are focusing on the connection between business transformation and IT implementation to enable that transformation,” she said. HP has also been actively building its own stable of IT consultants, which now is about 6,000 strong, Fiorina added. In addition, HP has been working closely with system integrators such as EDS. “The reason is that CIOs and CEOs are concluding time to solution is the most important thing,” she stated.

While HP is clearly more aggressively pursuing an e-business services strategy, it has no intention of entering the ASP business any time soon, preferring to be the infrastructure provider behind such businesses, Fiorina said. The company also intends to continue to grow its traditional hardware business as well, she added, stating that expansion of its services business should not be construed as a move away from servers, storage devices, and PCs. “We are not like any other company. We intend to play our own game,” Fiorina said.

HP will increasingly concentrate on its E-services offerings, centering around an “always-on” architecture supported by servers, storage, software and services.  The difference is that HP will talk more about “business transformation,” rather than IT implementation alone, Fiorina said. “We see a lot of solutions out there, such as supply chain management, that companies cannot capitalize on without a transformation,” she said. She also noted that HP’s E-services already provided the registry and dynamic discovery capabilities of the UDDI (universal description, discovery and integration) standard recently put forth by Microsoft, IBM and Ariba. “We’re studying UDDI very carefully,” she said. “Is this really an open standards environment, or a cartel intended to drive business to its proponents?”

GartnerGroup analysts also credited the increased efficiency and knowledge wrought by IT for one of the longest economic booms in history. The consultancy released estimates that more than 50% of new IT spending will take place outside of traditional data center and back office environments. Plus, widespread integration and automation of reporting systems will soon enable organizations to report earnings on a daily basis.

“I sense a disturbance in the force,” said Ken McGee, senior VP and research director with Gartner. “IT is becoming a mainstream tool for revenue growth. IT has been the growth hormone for this economy.” While many IT directors feel they do not have a significant impact on the overall growth of their business, he urged IT managers to “tweak” their operations.  A CRM or e-market strategy can increase revenue by half a percent, while an ERP-type implementation could cut costs by a similar amount. Such seemingly minor tweaks can dramatically improve a company’s prospects and valuation, he stated.

The rewards of such online, real-time connectivity throughout the organization is giving rise to a new C-level powerhouse in organizations, McGee notes – the “chief monitoring officer.” This new officer will have real-time access to “streaming information about the most critical processes and revenue activity,” McGee predicts. – Joseph McKendrick