Why HP is different from IBM

Ann Livermore weighs in on what separates her company from Big Blue, along with the shift to virtualization and what it means to be green.

Last year, Hewlett-Packard overtook IBM as the largest IT company in the world when its revenue hit $104 billion for the year ending in October, with IBM trailing at around $98 billion.

As head of the company's Technology Solution Group, 20-year-plus HP veteran Ann Livermore sees few limits on the potential growth of the systems and software supplier.

Livermore, who joined the company in 1982 and has held various senior positions in the company, speaks from a position of some authority. The TSG division is a substantial part of HP with its focus on the systems used every day by companies around the world, the software and the growing services business. The other two divisions that make up the remainder of HP are the Imaging and Printing Group, and the Personal Systems Group.

ZDNet.co.uk caught up with Livermore at the company's Technology@Work event in Barcelona, Spain recently, and discussed the differences between her employer and IBM, the adoption of virtualization, and whether HP is really interested saving the environment or just making more "green."

Q: How do you see the current troubled economic situation? Do you think it will affect your brands?
Livermore: (We see that) happening in the marketplace in terms of the financial services industry and some of the macro-economic trends associated with it. We are staying focused on the same strategy, so our strategy does not change as a result of this. In fact, we see many customers who have the capacity to still invest to save.

In a data center transformation what you are really doing is making an investment in a new infrastructure, to then be able to generate savings over a longer period of time. So those companies that have a strong cash position will often choose to do that.

The outsourcing business is also something that is a very attractive opportunity for many of our customers if they are feeling economic pressure. With our outsourcing business we can take on the data centers and some of the employees from our customers and help them drive down the cost of their operations. So outsourcing businesses tend to be counter-cyclical in terms of their growth.

It is only recently that HP has seen outsourcing as key to its business. How is that going?
Livermore: (Our) outsourcing business has many clients around the world. Procter & Gamble is a very large client for HP, where they have outsourced their entire global IT operations to HP. We have an outsourcing relationship with Nokia, with Ericsson, with BT, with Unilever, with Pfizer. These are very large clients who have not just little but significant outsourcing relationships with us.

And we have smaller relationships with many companies where we perhaps just do the desktop or we just do the SAP or Microsoft Exchange. So we have the very large ones, like the ones I just mentioned, and then smaller ones based around the geography or business unit or the applications.

Most (companies) are going to find that the transition from physical to virtual is slow enough that they are going to have to manage both for a while.

With the help of many different parts of the business, including services, you are now the biggest IT company in the world. You don't see any limitations in how big you can grow?
Livermore: I think that HP's ambition is not so much size-focused. We aim to be No. 1 or No. 2 in every one of the markets we participate. So it is more in terms of leadership in the segments where we participate.

You know, we want to be not just the biggest but also the best. So when you look at the best, you want to have the best financial performance, you want to have the best customer satisfaction and loyalty and you want to attract the best talent. So what we are really after is to be the leading IT company in terms of those three factors. And the customer loyalty and satisfaction is an important part of it.

It is one thing to be the size of IBM, but do you want to be like IBM? You used to be known as a very different company but now people tend to see you as very similar. How can you maintain the distinctiveness?
Livermore: We are quite different from IBM. We are both very, very different companies. HP is, at its heart, a technology company and our focus is on technology for better business outcomes and how we deliver that.

When we look at our portfolio and where the markets are going, we think HP's portfolio is much better aligned to the future markets. We have zero percent of our business in mainframes. The percent of our business that is in blades, in x86 servers and our Integrity line, is 100 percent. So our technology is more focused on the things that are forward-looking.

Similarly, our software business, enterprise management, and automation are clearly right at the top of every person's problem list from an IT perspective because they have to drive down the labor costs inside IT. So we feel that our portfolio is more technology-focused and on the services that wrap around that technology. So we think it is better aligned to where the market is going.

What is HP's take on virtualization, and where do you think the barriers are that stop people getting the maximum value from it?
Livermore: A lot of people associate virtualization with the server, and what really needs to be done by customers is to virtualize the entire data center, the servers, the storage, the networking, and the applications. And the first problem customers run into when they start doing that is: "How do I manage this thing? When I have physical servers sitting there, virtual servers and in a mixed environment, what do I do?"

The software we provide is to manage both the physical and the virtual servers through a single pane of glass, a single set of software, and actually create the equivalent of a logical server environment that is being managed. We believe one of the biggest impediments has been: "How do I manage this thing once it is in production?" With our software, you are able to visualize it, plan the changes, and actually make the changes in the environment.

Do you see a slow transition to virtualization?
Livermore: Yes, and most are going to find that the transition from physical to virtual is slow enough that they are going to have to manage both for a while.

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