HP Realigns Enterprise Group

HP is realigning business units within its Enterprise Group, combining the three hardware divisions into one, EVP Blackmore announced Friday.

Hewlett-Packard Co. on Friday realigned their three hardware divisions into a single business unit in an attempt to grow share and profits in the server and storage markets, said Peter Blackmore, executive vice president of HPs Enterprise Systems Group (ESG).

The three divisions—the Business Critical Systems, Industry Standard Servers and Network Storage Solutions—will now be combined into a single business unit called Enterprise Storage and Servers, which will be headed up by Senior Vice President Scott Stallard.

The Palo Alto, Calif., company also is creating a Business Management and Operations group within ESG, which will be led by Senior Vice President Howard Elias, who currently heads up HPs storage unit, and a Global Accounts unit under Senior Vice President Airton Gimenes. Elias new group will be responsible for managing the operations of ESG, including marketing, business management and customer-focused roles.

"The objective behind this is to accelerate growth," Blackmore said during a press conference announcing the changes.

According to Blackmore, HP holds 30-plus percent shares in the Unix, Windows and Linux server markets, as well as more than 20 percent of the storage space. ESG, which has been the companys largest losses since the companys $19 billion buyout of Compaq Computer Corp. a year ago, also has been able to increase profits by 64 percent and 36 percent over the past two quarters, and is poised to reach the break-even point in the second half of the year.

"Yes, we have had losses, but the losses are rapidly reducing," he said. "We are prepared to deliver on what we have committed to the company."

As part of the realignment, four product line vice presidents will report to Stallard, who currently runs HPs Business Critical Systems unit, which includes the companys HP-UX servers. Rich Marcello will run Business Critical Systems, Brad Anderson the Industry Standard Servers group—which includes the Wintel- and Linux-based ProLiant servers—Bob Schultz the Network Storage Solutions and Pauline Nist the Nonstop Servers.

Mary McDowell, who currently heads the Industry Standard Servers group, is taking a sabbatical and will return to HP in a senior vice president position, although Blackmore would not elaborate on what the job will be.

There will be no changes to ESGs Software Global Business Unit, he said.

Blackmore said it has become increasingly important for the hardware businesses to present a unified message to customers. When asked about possible job cuts related to the realignment, Blackmore would only say that the layoffs related to the Compaq merger have been completed, and that the focus now is on growth and managing investments.

HP officials say they have needed to cut more than 16,000 jobs in connection with the Compaq deal.

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