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HP's Livermore outlines storage strategy, page 2

Ann Livermore, EVP of HP's Technology Solutions Group discusses linking IT and business; HP's upcoming products and grid storage.

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HP bets on upcoming product announcements

Storage: Are the May announcements designed to fill the gaps in your current product and services offerings?

Livermore: If you look at what we've done with the product portfolio over the last year. We've made announcements for MSA at the low end, so we've made product enhancements and refreshments there. Back in September we made a refreshment of the high end of the product line with our XP. One of the big announcements in May will be the new products and refreshment of the EVA at the midrange. So across the entire product line, we'll have really market-leading positions. We'll have other product announcements we'll do in addition to the EVA piece, but we'll clearly have from top to bottom, from our low-end through our high-end products that are going to be competitively stronger that what you'll see from any of the competition.

Take some of the things like My First SAN — to help SMB customers put in place their first SAN. We've equipped our channel partners to be able to do some of the services for us, so we can get an even broader footprint associated with that. So, you see things where the strength of our ProLiants or the strength that HP has in the SMB market, we're taking more advantage of, specific to our storage line, and those are things that fuel great revenue growth opportunities for us.

On the XP, we've made it available to the Non-Stop environment. You might say, Non-Stop is not a really big market segment, but there's a big installed base and they're usually running in mainframe type environments. So suddenly we can get our XP, attached to a Non-Stop server, into a mainframe environment, with customers who typically haven't seen HP storage in that kind of an environment saying, "This stuff performs really well." So we've made some moves over the last year individually which might not have gotten as much attention, but you add them all up and it's starting to have us be able to not just take advantage of the new announcements, the new technologies but the whole capability HP's got, specifically funneled out to the storage business.

Storage: Is there any particular segment of the storage business that you see as particularly hot or requiring particular attention from HP?

Livermore: The SMB market is a huge opportunity for us. That's a huge opportunity and one that we have a lot of products to be able to offer, given the product array that we have. So that one's a very important market for us. We're starting to do some very interesting projects around ILM. We did the acquisition of Persist 18 months ago and we have an ILM offering really built off a lot of the capability we got with Persist from the underlying technology. And just something as fundamental as being able to do the indexing and archiving and then rapid retrieval of e-mail, including attachments is a big deal. There aren't a lot of people that have the technology to be able to do the attachment part of e-mail. It sounds so fundamental -- for compliance issues, whether you're a pharmaceutical company or financial services, you have one lawsuit and you can pay for the cost of implementing some of our ILM solutions. So, that's an interesting area for us.

Our EVAs had a record growth quarter in Q1, and the sequential growth between Q4 and Q1 was a record growth rate for us. So, we're seeing some of the result there. We're seeing great growth in our low-end storage, the MSA market, because industry standard servers in the market broadly are growing so strongly. Our ProLiant business grew 19% in revenues, 23% in units. Imagine all those ProLiant servers and the opportunity to add storage to that environment. It doesn't take very big attach rates in terms of percentages before you start having a great opportunity for some of the MSA offerings or the EVA offerings just given the sheer volume of servers that are shipping.

Storage: How important would you say the Persist acquisition is to HP's storage vision five years down the road?

Livermore: I think it's really important. It's the point I was trying to make this morning. It's not just about being able to do the storage, it's being able to do the proper archive, search and retrieval. What good is your information if you can't get to it quickly when you need it? So the Persist acquisition was certainly a focused one in a particular capability area, but it's very important to our overall participation in the ILM market.

Storage: Is a one-view concept — of servers and storage -- something that IT groups are looking for?

Livermore: Oh, yes. We think that IT groups are trying to figure out how they move themselves through the evolution of where they are today to being able to manage their IT more as a set of pooled resources and being able to do more dynamic reallocation of resources, and they're certainly not thinking of servers and storage separately. They might start in one part of the infrastructure, but they're worried about it from a more holistic perspective.

Storage: So it sounds like compliance might be the lynchpin into ILM which, in turn, is the motivator again for that IT-business synchronization.

Livermore: We think compliance is one of the things that is forcing a lot of companies to more urgently think about it. Because they're worried about how to deal with all the compliance regulations, they're worried that if they have to save all this stuff that it means they might have to access it, find something, so as a result it takes them to the next step of how to prepare for it. I think that compliance is a lynchpin. I think for some corporations the ability to have more integration of their customer data and use that for some sort of business advantage is a big driving force. We see a lot of financial institutions that are really struggling with customer data integration amongst all the different services that the bank provides. They've got multiple customer databases, and they're worried about real-time customer management, the online targeted marketing activities. And part of the ability to do some of the search and retrieval about me as a customer starts tying back in to how they use it for more targeted marketing. We see the finance institutions worried about both — the targeted market and compliance — so they're a pretty rich target base for ILM.

Storage: How about data security?

Livermore: Data security is a hot-button for customers. It's interesting to them from the people level, the process level and the technology level. They're interested in all three of those things with data security — do they have the right tools and technologies in place, do they have the rigor in their management and control process, and have they done the right thing around the people in terms of the training and the identity management aspects and all the things associated with it. That one [security] clearly has all three dimensions.

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