The mood was anything but geeky at HP Software Universe 2008 in Vienna. From December 9th to 11th, the bottom line was tops – as it should be.
The business environment is different this year, the outlook is less upbeat, and the global economy hasn’t taken a worse hit in decades. The time for the obscure comfort of techno-babble is long gone. And it’s not just CIOs who have to think business; CEOs have no choice but to view technology with less jaundiced eyes. Whatever it takes to survive in these troubled times!
HP faces pretty much the same challenges as its clients in the current scenario. Francesco Serafini, MD, HP EMEA and Senior VP, Technology Solutions Group, highlighted their net revenue of $118.4 billion for 2008, with a growth of $14.1 billion, up 13% year on year. “The fact that we are able to grow in a market that is changing is important,” he said. They have been able to generate cash, even in a market facing a crisis of liquidity, partly due to their strategy to build a stronger portfolio, according to Serafini.
EMEA comprises 42% of their worldwide revenue. There are 270 distributers, 5,000 Preferred Partner Resellers, and 120,000 other active resellers to service regional clients. “We have a clear strategy to build value-added portfolios for our clients through acquisition, execution, and market leadership and profitability,” added Serafini. Their integrated portfolio of services, software and hardware takes into account the current economic pain points of customers, he added.
The right place at the right time
There has been a clear switch in focus as far as what is expected out of IT. What technology does, now more than ever before, needs to be aligned with business perspective. Business demands range from improving the quality of service, to reducing costs, attaining better business agility, risk mitigation, and keeping room for innovation and insight, said Steen Lomholt-Thompson, VP and GM EMEA, HP Software & Solutions. But to achieve all that without increasing costs, organisations need to free resources and not have so much capital tied up in running business. “IT aims to reduce that,” he added.
The concern of many companies today is not growth, but survival. They want better control, but have a constrained budget, and they feel the need to optimise operations. Keeping that in mind, Serafini felt that HP’s Technology Solutions Group is well positioned to provide ROI to businesses struggling in the brave new world.
Lomholt-Thompson reiterated that “crises creates opportunity” and they were at “the right place, at the right time from a market perspective and an opportunity perspective.”
“We are strategically very relevant in HP and are one of the fastest growing departments,” he said of Software & Solutions. Having invested more than $6 billion in building their portfolio through strategic mergers and acquisitions, and over $400 million in the last 12 months on organic R&D, “we have progressed from selling to being responsible for implementation – for added value to customers,” declared Lomholt-Thompson.
Products and announcements
“Our management and industry solutions optimise business and extract more value from your investment in people, applications, infrastructure networks and information,” was Lomholt-Thompson message to the market.
HP plans to go to market in 2009 with a strong customer focus. Just what have they lined up for this year? The key announcements at Software Universe 2008 included:
• HP Quality Center 10.0. New features help customers manage enterprise-wide, complex initiatives – including those that span many applications and globally distributed teams
• New business service management solutions include HP Business Availability Center 8.0, HP Operations Manager, and HP Network Node Manager i Advanced (part of HP Network Management Center)
• HP Network Automation 7.5 Software (part of HP Data Center Automation Center)
• HP Universal Configuration Management Database 8.0 integrated with HP BTO software
• HP Service Manager 7.1 (part of HP Service Management Center) – combines expanded out-of-the-box ITIL best practices with dynamic access to HP UCMDB
• Zero percent lease financing for qualifying customers of BTO and Information Management (IM) software through HP Financial Services, the company’s leasing and financing arm.
• Software products delivered by its Software-as-a-Service (SaaS) option to provide BTO software on demand backed by 24/7 support that includes a technical account manager, ongoing mentoring and best practices.
Necessity prompts action
According to Robin Purohit, VP and GM Software Products, HP Software & Solutions, every CIO is currently locked in conversation with their CFO on how to save cash and achieve greater ROI. “The cyclical reality of the business environment accelerates the need for efficiency,” said Purohit. He advised organisation to turn adversity into advantage through application and IT operations modernisation.
In an impromptu show of hands at the event, most participants indicated either a flat to 6% growth in spend on IT in 2009, or a reduced spend if the downturn continued. A very small percentage actually predicted a growth of over 6 % this year. Tom Hogan, SVP, HP Software & Solutions, observed that market disruptions are a catalyst for change in leadership. On a lighter note, he also instructed all HP employees at the event to track down everyone who said they’d increase their spend, and make sure they were well looked after.
But underlying his light-hearted comment was a kernel of truth. Even HP did not seem impervious to the changing market scenario or the threat of slashed IT spends. The key message reiterated throughout the event was: change not by belt tightening, but through innovation. HP seemed all but ready to grab CIOs by their shoulders and shake them till they got the message loud and clear.
This sentiment was echoed by author, broadcaster and CEO of the Inspired Leaders Network, René Carayol during the keynote session. He urged CIOs to look beyond bits and bytes and see the big business picture. “If you don’t change, you’ll be changed,” he warned. “What does your business stand for? The CEO gets it, but to this day, I don’t believe the CIO does. We [CIOs] need to act, look and feel like a business person – and we are nowhere near it. Trusted advisor? Maybe. Businessperson? No. And this is the politest way I can put it.”
He egged them on further with advice that is sure to irk other CXOs, but it might be worth it: “Stop calling other departments [finance, marketing, etc] customers; they are your partners, otherwise you’re subservient. You should not have to turn up at their office to give explanations. They should come to you and ask for your help in business terms.”
Carayol cited the example of buccaneering, maverick brand Virgin. The brand philosophy has been to move in wherever they found poor service in an industry. Legend has it that Richard Branson flew British Airways and came back and announced that he was going to launch an airline. “The world thought the man was crazy,” laughed Carayol, “but 13 weeks later, the first jet had taken off. BA hadn’t even convened a board meeting yet!”
So how did he do it? “He outsourced everything from landing bays, to pilots, to planes and even catering. It meant he could turn it off immediately if it went wrong. He changed the rules of engagement. Virgin Atlantic was born using outsourced experts, not in-house well-meaning amateurs,” disclosed Carayol – making a convincing case for HP’s SaaS, even as he adrenaline-charged the gathered CIOs into going for the corporate jugular.