Hewlett-Packard is well into Year 3 of a five-year turnaround project undertaken by CEO Meg Whitman, who replaced the embattled Leo Apotheker in the top executive job in September 2011. In talking informally with Silicon Valley executives on a regular basis, we have discerned that not a lot of them would want the daunting headaches of a job like that one. To a man--and woman--they have a lot of admiration for Whitman.
While the huge corporation's profit levels have remained relatively steady (in the $25 billion to $29 billion neighborhood for the last three years--due in large part to cutbacks by Whitman in development projects and company head count--the overall revenue picture has been much more disconcerting, with the company earning $127 billion in 2011 before slipping to $120 billion in 2012 and then to $112 billion in 2013.
In its most recent earnings report on Feb. 20, HP appears to have slowed down the income slippage to what projects to be a resultant $110 billion in fiscal year 2014. Being down about $2 billion in overall income certainly is better than the $7.5 billion it has dropped on average since 2011. The company also has boosted its profit margin a slight bit.
Storage Has Been a Steady Performer
While most of its other divisions are treading water, about $5 billion to $6 billion of HP's annual income emanates from its storage business, and that number is growing at a healthy rate--right along with the world's insatiable demand for places to put all its data.
"As you know, HP is in the middle of a five-year transformation, and one of the major growth businesses for that transformation to success is the Enterprise Group," Senior Vice President and General Manager of HP Storage David Scott (pictured) told eWEEK. "And if the Enterprise Group is the spearhead for the transformation, quite literally HP storage is the Titanium spear tip."
Scott is responsible for the long-term growth and profitability of the company's storage business. Prior to joining HP, he was president and CEO of 3PAR, which HP bought for $2.3 billion following a bidding war with Dell in 2010. Scott had led 3PAR from an early-stage enterprise storage company through the company's successful initial public offering on the New York Stock Exchange in November 2007.
Utility Storage Becomes HP Front-line Offering
Under his guidance, 3PAR defined and introduced Utility Storage, a new category of storage designed for utility and cloud computing, which is now HP's mainstay.
Through all the corporate-level ebbs and flows of the last several years, HP's storage division has been a rock. Most of this, certainly, can be attributed to the acquisition of 3PAR and not necessarily to the company's older StorageWorks line, EVA or XP (which HP OEMs from Hitachi Data Systems through a joint agreement).
Turns out the HP 3PAR virtualization-ready, auto-tiering/thin-provisioning-focused systems are in demand--not only by midrange companies, but by larger enterprises who use them for divisional-type duty.
"If I step back and look at what's happening in the storage industry, I'd consider a point that you've (eWEEK) been making," Scott said. "That is many customers out there are fundamentally faced with a decision as they refresh their storage infrastructure: Do I turn around and buy from a well-proven, established company that I know?
"Do I buy a solution that might not be optimized to address the trends that people are facing? Or do I go for an alternative solution that may be optimized for these new trends but comes from a company with little or no track record?"
HP 'Diffuses' Dichotomy of Decision-Making
"That is a tremendous dichotomy that these customers are facing. I think the reason that HP storage is growing so fast is that we diffuse that dichotomy, because we have developed a portfolio where a proven supplier is able to offer optimized and proven solutions for the greatest challenges people face that are demanding a new style of IT."
Use cases for which customers are seeking solutions are about delivering IT as a service very efficiently, analyzing information in real time for better decision-making, and finding ways to ensure rapid business continuity through rapid recovery, Scott said.
"All of those are real challenges being exascerbated by this massive increase in the volume, variety and velocity of the data," Scott said. "IDC is projecting a 50-fold increase in data creation per year to 40 zettabytes by 2020. Ninety percent of the data people are storing is less than two years old."
What HP has done with its converged storage strategy is bring modern intellectual property (through 3PAR and other acquisitions) and from HP Storage and Labs to put a lot of investment into storage, Scott said.
"We have this affinity between customer challenge and what we're able to offer," Scott said. "It doesn't matter whether you're considering flash optimization, software-defined storage, bringing Tier 1 mission-critical capability to a mid-range affordable price point, being able to do real-time big data analytics on unstructured human information, or whether you're able to recover these huge amounts of storage readily enough to not go out of business.
What Converged Storage Brings to the Table
"All of those problems we solve with HP Converged Storage, in ways that our competitors cannot, because they don't have the architectures to deliver the same solutions."
As for control of unstructured storage, which HP really hadn't addressed well enough before 2011, Scott said that the original problems HP had with bringing UK-based Autonomy into the fold have been addressed.
HP famously--or infamously, if you like--spent $11.3 billion in 2011 (on Apotheker's brief watch as CEO) to acquire Autonomy and its big data analytics database and surrounding software. There has been a well-chronicled series of legal and accounting issues HP discovered after the purchase that has kept the deal in the news for three years. eWEEK has covered the topic extensively.
Autonomy Now Integrated into StoreAll
But the incorporation of the Autonomy secret sauce into the HP realm has been conquered, Scott said.
"We have this converged platform called HP StoreAll (which houses Autonomy), that we have just refreshed," Scott said. "It's a hyperscale, file and object-based solution that can store up to 60 petabytes of information within a single scalable system."
One of the real challenges that people have with analyzing big data is how to scan hundreds of millions--if not billions--of objects in unstructured files to find out what's changed in the last two hours, Scott said.
"When we worked with Autonomy early on, it would take them 20 servers and five days to search for the answer among 500 million objects to the question: What changed in the last four hours?" Scott said. "Think about that challenge: You're trying to perform real-time analytics, and you're getting your answer in five days?"
After the acquisition, HP Labs solved that slowness with Storage Express Query, which uses a custom-built meta database that's embedded in StoreAll, Scott said. "This allows Autonomy to perform that same search with one server, in 1.4 seconds. It's 100,000 times the order of magnitude faster than before, and its really enabling real-time data analytics on unstructured information," Scott said.
This is precisely what Autonomy's IP lacked and what caused consternation among its new owner. "They had the ability to search, they had all of the connectors that allowed them to search the information, but they lacked speed (and efficiency)," Scott said. "That's what the combination of HP Converged Storage with Autonomy Idol 10 facilitates."
eWEEK will follow up this story soon with more on the remaking of HP.