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Management apps are a critical part of the HP picture
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Are there any key software areas where you sense your customers would be more comfortable buying from their hardware vendor?
We've clearly made our big bet around management software. If you look at the biggest bet HP has made from a software business perspective, it's around the management portfolio. Over the last 18 months, we've made six software acquisitions in the management space. We've made two small acquisitions in the services market around IT service management. We bought two of the vendors that provided a lot of the training and consulting on ITSM [information technology service management] — a company called ManageOne in Texas and a company in the U.K.
We're really placing a bet on management software. And the reason why is you get to the core of shifting IT dollars from maintenance and operation more to innovation and new applications. The way you do that is having a better managed environment driving down the cost of the current operations. [It] is the single biggest problem most customers have — how to move cost out of maintenance and into new development — and management is core to enabling that for them.
We also believe that the management toolset that we have is how you tie [it] together, the link you need between the IT, the applications and the business processes. And being able to measure and be aware of the availability of all the individual nodes in the IT infrastructure, but report it and manage back to the uptime of the business process. How many orders you can process in an hour in terms of the performance, what's happening with my supply chain operations if you're a supply chain manager — they don't give a hoot about the uptime of servers X, Y and Z. Being able to make this kind of link between the business process and the IT is enabled through your management software capabilities, and the data you collect at the infrastructure level and your ability to translate that into business process outcomes. That's really fundamental. We think the Holy Grail around the environment is the management capability.
What's your relationship with VMware?
We still work with VMware around some of our customers' solutions and implementations. We have a lot of companies who are competitors, and yet there are parts of their portfolios that are things that are important for us to include in some solutions, so we certainly still work with the VMware team.
It reflects the customer environment. We have the same thing the other way. IBM is a big service provider in the outsourcing market and they have a lot of customers who are using OpenView. They're a pretty big OpenView customer because they have to use that toolset to manage some of their customer environments. They probably hate it, but that's one of the requirements for them. Microsoft just hates Linux, and yet we're one of Microsoft's biggest OEM partners and we're number one in the Linux market. You look at those two things and that's kind of the way the world works, and we think of VMware the same way.
What about the tape market?
We have the leading market share position around tape. But the growth rate is slowing. So it doesn't get as much attention as all the other segments that have higher growth rates, but it's a really attractive business for HP. It's a great business for us, and we're just trying to further consolidate the market.
You go out a few years, you can see some advantages to having some architectural things that you do consistently across the whole picture.
Different people come at it from different perspectives. Some customers might think of two pieces of it together — and sometimes that might be the two ends, the input and the output, because it's end users. And then they worry about the middle separately. We think there are some advantages to us having all three.
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