HP Takes a Holistic Approach to Reinventing Services Business

News Analysis: Hewlett-Packard CEO Mark Hurd wants to consolidate HP's various divisions to sell more services to customers.

LAS VEGAS—Like other top-tier OEMs, Hewlett-Packard has been deeply involved in the services business for years, and it is becoming an increasingly important and profitable part of the business as revenues reach into the billions of dollars.

When HP opened its annual Technology Forum & Expo June 18, most of the talks and breakout sessions were dedicated to new technology—the company debuted several new "green" storage hardware and software products—and the implantation of technology such as virtualization. However, the Palo Alto, Calif., company is also looking to reconfigure how it handles services in the wake of its growth and acquisitions.

In the past years, HP has been buying up software companies, including Mercury Interactive, a $5.4 billion purchase that expanded the companys management software offerings.

Now, after companies such as Mercury and Knightsbridge Solutions have been absorbed, HP has even more offerings to sell to its customers. And the spending to expand its technology portfolio is continuing, as evidenced on the second day of forum, when HP announced it would buy SPI Dynamics, maker of Web application security software.

Because of the number of options HP now has to offer, it is looking to reinvent the way it packages and offers its services, which has been a major theme running through this years forum.

In his keynote address, CEO Mark Hurd addressed the problem that HP has been dealing deal with since becoming so large—moving beyond its traditional roots as a hardware company toward more software and services. It has been forced to think of new ways to tackle its own internal infrastructure, while keeping its core customers up to date.

Nina Buik, president of Encompass, HPs largest user group with 16,000 members, said HPs expanding portfolio and additional services have led to some confusion among her members, although the group is working to bring feedback to the company. The goal, Buik said, is to take concepts such as HPs adaptive infrastructure technology and specifically spell out what the technology will mean for systems managers.

/zimages/7/28571.gifClick here to read more from CEO Mark Hurds keynote.

In a speech following Hurds June 18 address, Ann Livermore, executive vice president of HPs Technology Services Group, said the company is working toward a model where its core products—servers, storage and services—will be leveraged to address any number of IT issues and concerns. One of those, HPs adaptive infrastructure technology, looks to give IT departments a way to fully automate the data center.

Another offering, HP Secure Advantage, which the company unveiled June 19, looks to offer a wide range of security offerings, again using HP servers, storage, software and services. At the companys HP Software Universe, which is being held the same week as the Tech Forum, the company also introduced several more pieces of software and updates meant to help IT managers improve efficiency in the data center.

Next Page: Services competition heating up.