HP ‘Virtualizes’ Whirled PCs

Focusing on the virtualization of data center resources, Hewlett-Packard
Thursday announced new services and software designed to
bolster its Adaptive Enterprise strategy.

The rollout includes extended pay-per-use capabilities, expanded IT
utility offerings and a new desktop Blade PC. The Palo Alto, Calif.-based
computer and printer maker is locked in a race with rivals IBM, Sun
Microsystems and others to turn computing resources into a commodity that
can be metered and sold to customers similar to the way they get electricity
or water.

In a bid to get a leg up on the competition, HP opened up more of its
virtualization services portfolio with offers such as HP Agility Assessment Service, IT Consolidation services, Utility Datacenter services, Adaptive Network Architecture service, strategic outsourcing, and other On Demand utility managed solutions.

The company’s service division said it is also offering Instant Capacity On Demand for ProLiant BL servers; Managed Services like Dynamic Service Provisioning, Automated Service Usage and Solution Source, HP Messaging on Demand and a relatively new concept of pay-per-use.

Delivered through HP Financial Services, the pay-per-use program lets businesses access IT resources to meet demand through metered and paid models. In addition to previous announced server and storage offerings, the program now includes all HP commercial printing products and the latest industry-standard HP Integrity Superdome, rx8620 and rx7620 servers. Also, customers now have more flexibility in synchronizing business and IT with expanded utilization and billing options.

They include:

– 0% CPU Utilization – Which bases the payment on a straight average
usage calculation for customers that want no minimum usage commitment.

– 15% CPU Utilization – For customers who know they need higher system
usage. The payment plan assumes a minimum 15 percent commitment.

In addition, HP said customers can now select from both a 48-month term
as well as the previous 36-month option depending on their projected needs.

“Enterprises realize they need to be much more agile and responsive to
market demands,” said HP Financial Services president and CEO Irv Rothman.
“Today’s announcement extends HP’s pay-per-use offerings across the
enterprise, enabling supply to meet demand in real time and the direct
alignment of IT costs with business benefits.”

At its “HP Superdome” server launch in September of 2000, HP said it was the first company with usage-based CPU metering and
pricing. It maintains that it offers true pay-per-use services for servers, storage and imaging and printing products within a customer’s own IT environment.

Now, HP is moving to extend the program to its recently launched HP Superdome Integrity, 16-processor rx8620 and eight-processor rx7620 midrange servers running UNIX. The program is expected to be available in January 2004 in North America and in 15 European countries, and in the Asia Pacific region in the second quarter of 2004.

Analyst Julie Giera of Forrester Research called the new set of offerings impressive.

“It is what customers are asking for: a pay as you go set of services offerings that
allow them to rapidly respond to changing business conditions, while at the
same time being able to align their use of technology with varying business
cycles, paying only for what they use — for as long as they use it,” she told internetnews.com.

Giera said HP also needs to solidify strong partnerships with other services firms as part of its approach. “If HP is making this investment, there must be a defined relationship between the parties that cannot easily be broken if [for example] one of those partners is acquired.”

Among its partnerships are BEA and Oracle , which plan to develop HP’s Virtual Server Environment Quick Start software to help load in BEA’s WebLogic Server 8.1 and Oracle’s 9i Real Application Clusters with the Serviceguard extension as a sort of pre-install on select HP servers. HP said it would make the customizable systems available in early 2004 through its HP Services division.

Another pre-configured area is HP’s new enterprise desktop hardware
offerings. Dubbed its Consolidated Client Infrastructure (CCI), the
configuration consists of an HP Thin Client that connects to a network with a secure log-in to a blade PC running Microsoft Windows XP Professional and network storage located in a centralized data center.

In the event of a blade PC failure, HP said management software
automatically relocates the computing power from a new blade to the end user, who can then log back on with access to personal data in about a minute. In the back room, HP said IT managers simply remove and replace the failed blade; the management software can automatically configure the new blade and place it back in the blade pool typically in less than an hour.

HP said its blade PC, which features Transmeta Efficeon processors, is expected to be available in the United States and Canada in at the first quarter of 2004. The company already has pilot programs running in both countries and is evaluating the process.

HP is offering customized versions of its Thin Clients, new HP blade PCs, network storage, complete solution implementation, training and a support contract start at less than $1,500 per seat.

But is HP taking its cues from rivals or moving ahead of the curve with these latest announcements? Even Nick van der Zweep, director of utility computing and virtualization admits that HP’s desktop blade reeks of Sun Microsystems’ Sun Ray clients, that its “Pay Per Use” pricing is similar to IBM’s e-business “on demand”. Still, he said, HP has what others don’t: Compaq.

Prior to their merger, HP and Compaq maintained that they each had launched computing on demand/utility computing initiatives ahead of competitors — albeit in a less sophisticated arrangement than now — that gave HP a head start.

“Back then, computing on demand wasn’t much more than an alternative financing scheme to push hardware sales,” Giera said. “You ‘bought pre-configured hardware and it sat on your computer room floor — or in the
warehouse, until such time as you needed it. When you put the devices into production, you got billed. The flaw in all of this initially was that there
was no way to scale down. You could scale up, or scale out, but not down.”

But with the advance of pay-per-use, that is changing.

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