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Commentary: HP gets organic

In a consolidating IT industry, Hewlett-Packard is charting a path toward the Adaptive Enterprise, its name for a new set of IT and business capabilities that has captured the industry's attention.

Commentary: HP gets organic
By Forrester Research
Special to CNET
December 9, 2003, 11:15AM PT

By Frank E. Gillett and Charles Rutstein, Analysts

In a consolidating IT industry, Hewlett-Packard is charting a path toward the Adaptive Enterprise, its name for a new set of IT and business capabilities that has captured the industry's attention.

Forrester calls this new data center architecture Organic IT, which is computing infrastructure built on cheap, redundant components that automatically share and manage data center computing resources. With all the pieces now falling into place, expect HP to succeed--and to give IBM a run for its money as a strategic supplier of Organic IT.

HP CEO Carly Fiorina believes that:

• Only the big will survive. Fiorina argues that tomorrow's IT industry will be dominated by "fewer, more powerful and more profitable firms." While her comments may appear to be simply self-serving, Forrester continues to believe that industry consolidation is inevitable.

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• Vertical expertise matters--but only to a point. Fiorina fervently believes that HP must have vertical industry expertise, especially in industries such as telecommunications and financial services. But she rejects IBM's argument that buyers will demand vertical expertise in all of their important technology purchases. Rather, she argues that winning IT suppliers will deliver standardized--not vertical-specific--technology to reduce complexity and cost.

• HP knows where it's going. Fiorina is charting a path to what she calls the Adaptive Enterprise--which remains a dead ringer for Forrester's Organic IT vision. Our take? Fiorina has the right vision, and has proven her ability to execute under tough circumstances. CIOs should feel very comfortable selecting HP as a strategic technology supplier.

With its Adaptive Enterprise, HP stays in the game with IBM, using a simpler vision and better heterogeneous product support. HP's drive--under the "demand more" tag line--brings together several ideas and technologies emerging from the labs.

HP offers a two-step road map for getting "adaptive." First, measure and assess business agility and, second, architect and integrate with four design principles: simplification, standardization, modularity and integration. The company is backing up that plan with products and services, including:

• The Darwin Reference Architecture. Shared across HP's business units, the Darwin Reference Architecture is a vision of how to tie virtualized servers, storage and networks together with applications and business processes. HP's OpenView management software spans the architecture to provide centralized optimization and automation.

• Expanded automated management software. The Virtual Server Environment (VSE) brings together HP's disparate products and technologies into a cohesive framework for sharing servers. Meanwhile, the Software Self-Healing Services will deliver improved problem detection, troubleshooting and automation for OpenView by the end of 2003.

• Three key HP services. The Agility Assessment Service measures agility on the dimensions of time, range and ease to assess IT support for business needs and then prioritizes solutions. Two other services help apply Adaptive Enterprise design principles to a company's applications or networks.

Why it's good to demand more
HP has strengthened its position in the competition with IBM and Sun Microsystems for Organic IT contractors. The new tag line goes right to the heart of what business and IT leaders want from technology--and pokes fun at IBM's "on demand" tag line. The Adaptive Enterprise strategy and the "demand more" slogan are strong because:

• The rhetoric is backed by good ideas and products. The agility metrics give HP something to use against IBM's Business Consulting Services, which has an edge in strategy and vertical expertise. And products like the Utility Data Center (UDC) and Workload Manager deliver Organic IT capabilities today, rather than relying on a services-driven approach to building custom solutions.

• And those ideas and products offer some heterogeneous capabilities. HP, IBM and Sun all claim support for other vendors' technologies, but HP has backed the claim with support for EMC and Hitachi in products like UDC and OpenView CASA (Continuous Access Storage Appliance), a heterogeneous storage virtualization product. This support of proprietary features--rather than just generic standards like "PXE boot" for Intel servers--is a good start toward building the heterogeneous capabilities needed for large data centers.

What still needs to be done
But to get to Organic IT, there's still a lot that HP must do:

• Build more detail into the reference architecture. Darwin is little more than slideware--so far. But HP has embarked on the right idea: a framework outlining the elements and interfaces of an Organic IT architecture from servers to business processes. HP must deliver lower-level details and road maps for storage and networks, the way it did for management software and for server sharing with the VSE.

• Put IT efficiency before business agility. HP's focus on business agility metrics before IT improvements is similar to IBM's mistake of putting business transformation at the front of on-demand efforts. Organic IT technologies yield immediate savings--and don't require any business changes. Most companies will slow purchases and implementation if asked to rethink business processes, rather than looking for business benefits after IT savings are captured.

Don't settle
The Organic IT voyage will be a multiyear journey to simplify, virtualize and integrate data centers to become heterogeneous flexible pools of shared resources. But today's technologies offer immediate savings on the voyage--as long as vendors deliver what companies are willing to implement. To keep vendors on track, companies should:

• Demand more cost relief. HP says that companies should demand more--more accountability, more agility and a better return on IT. It's right--so hold all vendors to this standard. If a vendor promises costs savings, demand guarantees backed by cash. If you outsource, demand that your outsourcer trim costs with Organic IT--and a slice of the savings.

• Demand more heterogeneity. Despite HP's early efforts, there's a real danger that vendors will favor proprietary approaches over standards to lock in customers. Companies must push HP, IBM and all vendors to follow the Linux example for Organic IT. In these early day, it means that vendors must publish reference architecture details and product APIs (application programming interfaces)--and create industry standards for heterogeneous Organic IT data centers.

• Demand more retrofits. Services like HP's IT consolidation offering are great--if your shop is ready for a major equipment buy. But many companies simply want to organize and optimize what they already have--for example, reorganizing existing storage to free up 20 percent more capacity. Companies must demand incremental migration solutions that build toward Organic IT--without big gear buys.

© 2003, Forrester Research, Inc. All rights reserved. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.