Hurd: HP Consolidation Project Moving Along

Hewlett-Packard has cut in half the number of applications it uses, the CEO said to analysts following the company's quarterly report.

Hewlett-Packard's internal data center consolidation initiative is coming together.

In a Feb. 19 call with analysts following HP's first-quarter financial results, President and CEO Mark Hurd said the company is making progress in its push to reduce the number of its data centers from 85 worldwide to six centers in the United States, a move that could save the company about $1 billion in the next year.

HP, one of the largest IT vendors in the world, first announced that it would undergo a massive data center consolidation project in 2006. The plan not only called for saving the company money, but it would serve as a model for customers looking to consolidate and simplify their own IT infrastructures.

While HP executives have offered sporadic updates on the program, Hurd took some time during the call with analysts to offer specifics on the initiative. For example, Hurd said that when HP first announced the project, the company used about 6,000 different applications within its data centers.

Now, HP has reduced the number of applications to about 3,000. Application consolidation, Hurd said, is a key to modernizing the technology HP uses inside its data centers, which will eventually allow its engineers to reduce the amount of physical hardware as well.

In one case, Hurd said the company used 75 different consumer report applications for each of the countries where HP has a business presence. The company now uses one application throughout the company.

"We have now consolidated those into one application-one application that now supports our entire consumer support across the entire company, which means that IT can do one modification to our code base [and] drop it down one time," he said. "Before [reducing the number of applications], we had to do 75 different modifications to be able to get that done. That not only lowers our cost, but it increases our speed and makes us more nimble and gives us a better platform to run the company."

During the call, Hurd said the company is working to complete the consolidation initiative by the end of the company's 2008 fiscal year on Oct. 31. Cathie Lesjak, HP's chief financial officer, said the company plans to save about $1 billion in the 2009 fiscal year.