SAN FRANCISCO — Hewlett-Packard’s CEO Mark Hurd brought his no-nonsense style to Oracle’s Open World conference here and laid out more details to streamline companies’ IT systems –- and its own.
“We’ve got a lot of work to do to get better,” Hurd said. “We’re actually trying to shrink our matrices, shrink our layers,” and get faster so we can do more for customers, old and, hopefully, new.
“So when you ask us a question, we can actually answer it, and answer it quickly; so you can get the right answer to the right question, and hopefully at the right time.”
While rattling off data about HP’s systems, revenues, growth and innovation budget (to name a few), Hurd built on HP’s latest assault on mainframes.
The goal of the Application Modernization Initiative (AMI), he said, is to help customers move applications from mainframe systems to Intel-based HP Unix servers running Oracle software.
After all, customers want to update their systems to enable different applications to share data and interact across a variety of data silos. Service-oriented architecture HP also plans to eat its own dog food. Just a lot less, if you will. Labor costs continue to eat into HP’s margins, he explained. “In my opinion, they’re too high,” and also erode many dimensions of HP’s overall business strategy, which includes the complex task of integrating some of its recent acquisitions. “All the while under pressure from Wall Street to perform” and hit its guidance numbers, he continued. HP’s internal issues mirror those of the industry, he added. “We’ve been putting Band-Aids on the infrastructure to keep tabs on labor costs. It’s a tough job.” Without cutting those labor costs, innovation continues to get squeezed, he added. “After careful analysis, I determined this was not good,” he deadpanned to a smattering of chuckles during his keynote address. At the same time, consider this trend, Hurd said. Worldwide IT labor is not declining. It’s inclining significantly. And it’s forecast to continue to incline. Why? Aging infrastructure. “It’s aging at a rapid rate,” which means less IT time is being spent on [new] infrastructure and more time is going into Band-Aid approaches in order to keep that infrastructure running. So what’s HP’s plan? Getting leaner, for one. HP is taking 5,000 of its own global applications and shrinking that to less than 1,500. The company had 21,700 servers churning out data at its offices and centers around the globe. That’s shorthand for a lot of unused capacity. Look for HP to reduce that server fleet down to 1,400 through the use of virtualization technologies. So what that means, he continued, is that HP will not only be reducing the number of servers it maintains, but will be adding 80 percent more processing power and increase cooling and wattage by 50 percent at the same time. There’s more, too. HP maintains over 700 data marts and operation stores across its global operations. “I hate those things,” Hurd continued. “We’re going to one enterprise data warehouse, across the entire company, and eliminating all those marts.” It’s all part of HP’s plan billion dollar plan to transform itself within three years, which it announced over a year ago. Sure, CIOs and IT managers will say this is a lot tougher to do than to point to on a PowerPoint slide presentation. But Hurd kept the message simple. One, there will be no proprietary products in our infrastructure,” he said, returning to HP’s pledge to use open systems, including its own lines, such as Proliant server blades deployed for Linux, for example. “These will be mission critical and we will use virtualization to consolidate those servers. We will also automate everything we possibly can in order to limit the amount of human intervention as much as possible and lower our costs, he continued. “We’re not taking a vote. We’re not taking an opinion poll [internally] about this. It has to be led by the CEO.”
