Hewlett-Packard: Once More Toward the Cloud

Hewlett-Packard says it is again revamping the corporate sales of its servers and software to better take advantage of the growing market for cloud computing by large businesses.
The initiative, called HP Converged Cloud, is in some ways the operational reflection of the changes recently put in place at the top of H.P. by Meg Whitman, who became chief executive in September. Ms. Whitman consolidated the personal computing and printer divisions of H.P. and also streamlined the sales functions to large corporations. HP Converged Cloud similarly consolidates what were separate businesses involved in the construction and running of a large data center.
Cloud computing promises a more efficient use of information technology resources by tapping into large amounts of data storage and computational power via the Internet. This means remote workers can have access to a lot of data, sensors tied to the system can gather more data and centralized resources can work more efficiently.
“We’ve got lots of intellectual property, lots of products, and expertise at running things at scale,” said Bill Veghte, chief strategy officer and executive vice president of software at H.P. “There is a new wave of cloud and mobile computing, and big data, and there is a gap between what businesses need and what information technology is delivering.”
H.P., which has had four chief executives in a little over seven years, has been losing the initiative to companies like Amazon, which is believed to have one of the largest corporate cloud businesses, and I.B.M., which has been increasing its efforts in the construction of private corporate clouds. Amazon only sells access to things like computing and data storage, not hardware. I.B.M. is strong in computers, but H.P.’s data storage systems are regarded as particularly strong. Its large-scale automation software is regarded as an underutilized gem.
It is also somewhat early in the contest. About half of H.P.’s $130 billion in annual revenue comes from large companies, which tend to move slowly to new technology. H.P. wants to be using those big-company relationships in its Converged Cloud proposition, which emphasizes things like operational flexibility, management control and security rather than cutting-edge technology. The company’s main selling points, he said, would be “choice, confidence and consistency.”
H.P. will offer companies the ability to build their own clouds or to gain access public clouds, including a system that H.P. is expected to bring online in a few weeks. The company will also have a service to modernize software and develop new ones. It will merge the structured and unstructured data analysis capabilities it gained with last year’s acquisitions of Vertica and Autonomy.
Some aspects of the Converged Cloud sound a lot like what H.P. has peddled before. And Mr. Veghte could not say how H.P.’s sales representatives, who are typically given incentives to move hardware, would be compensated in the new system, other than to say that he had targets that must be met. A number of specialists in cloud computing will also be used, he said, and these two groups will be expected to work together.