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Five questions with HP's storage chief

Hewlett-Packard Co.'s storage business had a bumpy ride in 2003. There was an internal reorganization, thousands of company-wide job cuts, an exodus of storage veteran employees, many of whom signed on with competitors like EMC Corp. and IBM -- all of which has left some industry experts questioning the future of HP's storage division.

In this interview, asked Bob Schultz, head of Hewlett-Packard's network storage solutions division, to respond to HP's critics and clarify how the recently reorganized HP storage group can better serve the end user.

Last May, HP announced it would cut 4,000 jobs over a six-month period. Are those complete? How many cuts were made in the storage business?
For the storage team it was nominal. There's always some fine-tuning going on in an organization of our size. We're trying to bring people together in one building. The storage group did not experience more cuts than any of the other divisions. I would say less, in fact.

Let us know what you think about the story, e-mail: Kevin Komiega, News Editor

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Apart from now adding services to the menu, how does this help anyone? How does it help people who are looking for the best products?
This is what customers have been asking us for. They're saying, 'We're not buying speeds and feeds. We're looking for you to help us design our entire infrastructure -- servers and storage.' We're lining the teams up and planning more holistically than we have before. Let's clear up questions about the recent reorganization of HP services and the enterprise systems group into the new technology solutions group. What are the supposed benefits of the reorganization as it pertains to storage users?
In terms of the technology solutions group, from the customer's perspective, it's going to be a positive. It's going to make it easier to do business with HP. If you step back and look at the storage market, 50% of the business is in products and 50% is in services. That's a pretty big chunk in services. It made sense to put them together. Some claim that HP just hasn't been able to capitalize on the potential of the Compaq storage group.
Look at the last 18 months. Everybody said, 'We're going to take share from HP. They're going to be confused and lose traction.' That's not the case. We took share in the storage market. Typically in a merger, a company can lose 5 to 10 percent of their market share because of an overlap in products. Not only have we held our share, we've grown our share in the areas of SANs and NAS. We talk about how we had Noah's Ark. We executed on the road map we laid out on the first day of the merger. If I were [the competition], I'd be worried about HP taking more share. I feel very confident about where we are. Several industry experts are saying that the loss of talent from the old Compaq storage group indicates a lack of strategic direction within HP's storage business. Why did so many storage veterans leave HP?
People say, 'You've had several executives leave for EMC.' There are always people moving around in this industry based on their own career objectives. The people that made those decisions went from running fairly large groups [before the merger] and were moved into another division. They wanted to move on. Were there one or two people that made the largest storage group in the industry successful? It doesn't work that way. It's a team effort. We have a strong team in place. I'll skip myself to be modest. Some of the people on the staff aren't the celebrity figures that Compaq might have had in the past, but they're extremely experienced -- like Neal Clapper and Frank Harbist. The point would be that, if you sat down with each one of them, what you'd find is that [they] really know the business and have a very disciplined approach to how to drive the business.

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