Keeping Up with Competitors

By Scott Ferguson  |  Posted 2008-02-20 Print this article Print

Besides applications, HP plans to use more of its own blade servers-both x86 and Itanium-based systems-to help reduce the physical infrastructure, as well as HP's own cooling and management software. All of these different technologies stem from the company's Adaptive Infrastructure program.

David Cearley, an analyst with Gartner, said HP's data center consolidation program is not only an important step for company as it looks to modernize its data center and streamline its operations, but it also gives the company a stage to demonstrate its ability to customers.

Cearley said many vendors, including Sun Microsystems and IBM, have begun similar projects and it's important for HP to keep up with its competitors.

"This type of project helps HP build its own expertise and it allows them to leverage that expertise with its clients and offer them advice on how to go through a similar exercise," he said.

The types of savings that a large consolidation project might bring to HP might also explain the company's first quarter financial numbers, which it released Feb. 19. The company's net income for the quarter that ended Jan. 31 increased to $2.13 billion. For the same time period last year, the company posted income of $1.55 billion.

HP's revenues increased more than 13 percent, from $25.1 billion last year to $28.5 billion. Unlike other major vendors, such as Cisco Systems and Intel, which cautioned investors about the next few months, HP raised its outlook for the next few months. Although Hurd did caution that the PC market would not be as "robust" as it has been in the past few quarters.

Hurd added that HP was helped along by cost reductions and market share gains. Cearley also said that because 69 percent of the company's revenues come from outside the United States, HP might also be insulated from the sluggish U.S. economy.


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