The Hindu Business Line : Storage is no longer about getting cheapest solution: HP

Chennai, Dec. 30 We have laptops. But how many of us actually have a back up for our data? “Ninety per cent of small and medium businesses will fail if their data is unavailable for use for 10 days,” says Mr Manoj Suvarna, Country Head, India-Storage Works Division, Hewlett-Packard India Sales Pvt Ltd (HP). For HP, 2007 has been the year of educating the customer on the need for storage. Business Line spoke to Mr Suvarna on the company’s focus and sales projections for 2008.

What have been the high and low points for HP storage solutions in 2007?

The low point has been the market not taking off. For us, it has not been about how much money we invest in the market but how much demand we create. We have doubled our reach, team size and partnerships in 2007. We feel we have set the momentum for (storage solutions to pick up) in 2008. The high point has been our ability to successfully segment the market into micro sectors such as jewellery and auto ancillary businesses. HP’s mind share has gone up and we are now looked upon as a total solutions provider. This is reinforced by the awards we have won this year.

What is HP’s focus for 2008?

There are three areas of focus — business continuity, educating partners and emphasising on green storage. Under business continuity, we want to tell customers that they must no longer look at storage as buying 10 tera bytes or 20 tera bytes, but choose their solution depending on aspects such as recovery point objective (RPO) and recovery time objective (RTO). Let me explain this with an example.

For any business, data availability is mandatory by the second. For instance, in a stock exchange, the trading floor cannot go down by even 5 seconds because it could mean an IPO taking off or not, or people losing crores of money. In such a case your recovery point is critical. In this case, your RPO requirement is very high.

A bank customer, on the other hand, may be willing to wait for two days to get his account statement of the last six months. Here RPO is not as critical.

RTO, on the other hand, looks at what is more critical? Is it the last minute, the last second or the last six months.

Customers must look at the RPO and RTO requirements and tier their storage. Storage is not merely storage but also back up and recovery. If your data does not need high RTO or RPO, you can store it on a tape drive that is more cost-effective. Storage is no longer about getting the cheapest solution, but managing what you have smartly.

Our second focus is to educate our partners. We realise that they are not mature enough to sell storage solutions. We will tell them how they can make greater margins by selling storage solutions. We have, so far, invested about a few million dollars in educating partners and the bulk of our investments in 2008 would be in this area. We want partners to talk about storage, irrespective of whether they sell a storage solution or not. (HP has close to 1,000 partners)

Thirdly, we will focus on green storage as power and cooling costs are rising and large companies are looking at ways to reduce this.

What is your current growth and what are your projections for 2008? What challenges do you see in getting there?

This year we grew at 30 per cent, exceeding the Indian market growth at 17-19 per cent, and next year we aim to grow at 35 per cent. Small and medium enterprises (SMEs) will drive this growth as many of them are looking to consolidate their systems. The SME market for hardware storage solutions is pegged at about $200 million and reports say that IT spends by SMEs are growing by 24 per cent.

Additionally, government projects are kicking off and a majority of old projects (of HP clients) are up for renewal.

There is large scope for growth in healthcare (digitisation of reports), media and entertainment (film post production), IT and ITES (file sharing and associated services) and infrastructure and retail where we want to provide blue print solutions (reference able solutions).

The biggest challenge in reaching our targets will be the market maturity. There is no pull for storage solutions because there is no awareness about them.

We have solutions and are telling customers “you need to go for storage without going for additional computing power”. The challenge is going to be how to simplify and communicate this to the client.

Can businesses look forward to any new/breakthrough products from HP in 2008?

We will look at enhancing and optimising our existing portfolio. (HP has nine product lines under the storage category, each with three-four products). We may consolidate and cut down on some products. The idea is to not to churn out solutions at a pace that will overwhelm the customer.

Has the rupee-dollar movement affected sales of storage solutions? We have heard cases of business deals being postponed to the next year due to the weak dollar.

No. There has been no impact in the storage and servers business.

This is because the domestic market is growing very fast and customers are not looking for short-term outsourcing business from overseas markets.