Storage Failures Key to Fiorinas Undoing

Interim CEO Wayman calls HP's storage business, which lost key personnel to rivals, "a significant disappointment."

Among factors that led to a rift between ousted Hewlett-Packard Co. CEO Carly Fiorina and HPs boardroom, dissatisfaction with the companys beleaguered enterprise storage efforts rings the loudest.

Analysts and HP storage customers point to a variety of reasons that slowly derailed the business unit. They include a failure to recognize the value of key storage executives, the inability to maximize its existence as a full-scale systems vendor to help customers combat massive data growth, and an erratic storage strategy that hamstrung cross-product integration efforts.

Mere hours after Fiorinas exit, HP interim CEO Robert Wayman said HPs storage business was "a significant disappointment last year." Wayman said the enterprise unit had fallen short on revenues and market share.

/zimages/2/28571.gifHow will Fiorinans exit affect HPs printer and PC businesses? Click here to read more.

Charles King, an analyst at Pund-IT Research, of Hayward, Calif., said HP severely misjudged executive assets it let escape to storage rivals in the aftermath of its Compaq merger. For instance, Mark Lewis, credited with revitalizing Compaqs storage efforts, left HP to become chief technology officer of EMC Corp. and now is executive vice president of EMCs growing software business.

"One of the real crown jewels that HP acquired in the Compaq deal was Compaqs StorageWorks division—but HP started losing some really significant people from its storage team that mostly ended up with EMC," said King. "That was clearly something HP missed the boat on, and theyve paid for it ever since the merger."

King said EMC has seen a huge leap over HP in the lower-end midmarket storage arena due to personnel it plucked from HP, along with its relationship with Dell Inc.

HP storage customer Charile Orndorff, CIO of retail and consumer goods professional services company Crossmark, of Plano, Texas, said the Compaq mergers sheer scope may have inadvertently led users into the arms of competitors.

"Any time you bring together two large organizations like that, you create layoffs and overlap, and you create uncertainty, and people will start looking [elsewhere]," said Orndorff.

Orndorff runs an HP StorageWorks EVA (Enterprise Virtual Array) system featuring 5.5TB of stored data. For the most part he is satisfied with HPs storage direction and progress, he said. However, he did note that as of yet the company is unable to satisfy integrating end-to-end replication and backup ILM (information lifecycle management) capabilities he desires.

/zimages/2/28571.gifShould HP look outside the company for its new CEO? Click here to read what David Coursey thinks.

Further hindering HPs storage efforts is the companys shift toward a reactive as opposed to proactive stance for its products, analogous to Sun Microsystems Inc.s storage troubles. A major factor, noted King, is that both companies rely too heavily on Hitachi Data Systems Corp. for their high-end storage needs.

"If youre basically turning over responsibility for enterprise-class solutions to an OEM partner," King said, "it means youll always be running a bit behind the curve."

As businesses deploy larger amounts of storage and run into information management hurdles, the complexity of storage is leading customers to seek full-time storage vendors. King said HP must figure out specifically what HP storage addresses and convince customers it can execute a believable strategy, as well as rectify its storage virtualization story across its products.

/zimages/2/28571.gifCheck out eWEEK.coms for the latest news, reviews and analysis on enterprise and small business storage hardware and software.