The Hindu Business Line : HP bets on storage, networking, virtualisation

Hewlett-Packard Co is betting big on services such as consolidation and virtualisation to drive growth for its storage business in fiscal 2009 as customers look to reduce their cost of operation by leveraging existing infrastructure in a weakening market.

HP expects growth in segments such as storage, networking and virtualisation, where IT spends were likely to increase next year, whereas spending on hardware such as servers are expected to go down, it said at the HP StorageWorks Executive Forum 2008 in Penang, which this correspondent attended recently at the invitation of the company.

IT Spendings

“Companies are spending less on servers overall, and they are consolidating their position on servers,” said Mr Jim Wagstaff, Vice-President of StorageWorks Division in HP Asia Pacific and Japan, quoting a report published by IDC Research.

Customers obviously will have to spend more on storage and that includes hardware, software, services, networking and virtualisation, Mr Wagstaff said.

Virtualisation is a technology that creates several virtual machines from one physical machine.

Cost cutting

“Virtualisation has some key benefits as it drives costs out of business,” he said.

It can also help to save more on power and cooling, and makes manageability and availability for business continuity better. It allows companies to better utilise their assets, which will increase their utilisation.

When customers increase the utilisation of a server by applying virtual machines, network infrastructure and storage has to be built to support that. A lot of design expertise and applications go into that, and there is management and training as well. All of these are business opportunities for HP.

“It potentially means lower hardware sales, but in the broader context of things we actually see it as a good thing because we are not only out to sell more servers units, but we really want to provide a more holistic ecosystem for our customers,” said Mr Wagstaff.

Infrastructure

HP acquired EDS recently, and a part of the expertise it acquired had to do with infrastructure, and virtualisation is part of infrastructure. “EDS would play a major role in providing these services,” he said.

In an environment where customers are trying to save money, HP also sees increase in demand for services such as “de-duplication”, which can help reduce cost of operation. De-duplication can reduce backup data by almost 70 to 80 times. The compression comes from maintaining only the least amount of data required to provide backup. Generally, companies maintain large numbers of backup data.

“Companies are always trying to save. But now the urgency will be greater. I think that is the difference. I expect to see more demand for these services,” said Mr Dave Roberson, Senior Vice-President and General Manager of HP’s StorageWorks Division.

Investments

He said the company plans to continue investing in newer services. The HP SAN Virtualisation Services Platform that enables the pooling and sharing of storage resources is new, and the de-duplication technology was announced about 120 days ago. The company also acquired LeftHand Network, a provider of storage virtualisation and storage area network solutions for $360 million, he added.

“So that’s kind of something almost every eight weeks in this area. We are going to keep the pace up for sure. We think it is a critical area and as HP we have the financial strength to be able to continue to invest in R&D,” Mr Roberson said.

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