Why HP is different from IBM

As head of the company's Technology Solution Group, 20-year-plus HPveteran Ann Livermore sees few limits on the potential growth of thesystems and software supplier.

Livermore, who joined the company in 1982 and has held varioussenior positions in the company, speaks from a position of someauthority. The TSG division is a substantial part of HP with its focuson the systems used every day by companies around the world, thesoftware and the growing services business. The other two divisionsthat make up the remainder of HP are the Imaging and Printing Group,and the Personal Systems Group.

ZDNet Asia's sister site ZDNet UK caught up with Livermore at thecompany's Technology@Work event in Barcelona, Spain last month, anddiscussed the differences between her employer and IBM, the adoption ofvirtualization, and whether HP is really interested saving theenvironment or just making more "green".

Q: How do you see the current troubled economic situation? Do you think it will affect your brands?
Livermore: (We see that) happening in the marketplace in terms of thefinancial services industry and some of the macro-economic trendsassociated with it. We are staying focused on the same strategy, so ourstrategy does not change as a result of this. In fact, we see manycustomers who have the capacity to still invest to save.

In a data center transformation what you are really doing is makingan investment in a new infrastructure, to then be able to generatesavings over a longer period of time. So those companies that have astrong cash position will often choose to do that.

The outsourcing business is also something that is a very attractiveopportunity for many of our customers if they are feeling economicpressure. With our outsourcing business we can take on the data centersand some of the employees from our customers and help them drive downthe cost of their operations. So outsourcing businesses tend to becounter-cyclical in terms of their growth.

It is only recently that HP has seen outsourcing as key to its business. How is that going?
(Our)outsourcing business has many clients around the world. Procter &Gamble is a very large client for HP, where they have outsourced theirentire global IT operations to HP. We have an outsourcing relationshipwith Nokia, with Ericsson, with BT, with Unilever, with Pfizer. Theseare very large clients who have not just little but significantoutsourcing relationships with us.

And we have smaller relationships with many companies where weperhaps just do the desktop or we just do the SAP or MicrosoftExchange. So we have the very large ones, like the ones I justmentioned, and then smaller ones based around the geography or businessunit or the applications.

With the help of many different parts of the business, includingservices, you are now the biggest IT company in the world. You don'tsee any limitations in how big you can grow?
I think that HP's ambition is not so much size-focused. We aim to beNo. 1 or No. 2 in every one of the markets we participate. So it ismore in terms of leadership in the segments where we participate.

You know, we want to be not just the biggest but also the best. Sowhen you look at the best, you want to have the best financialperformance, you want to have the best customer satisfaction andloyalty and you want to attract the best talent. So what we are reallyafter is to be the leading IT company in terms of those three factors.And the customer loyalty and satisfaction is an important part of it.

It is one thing to be the size of IBM, but do you want to be likeIBM? You used to be known as a very different company but now peopletend to see you as very similar. How can you maintain thedistinctiveness?
We are quite different from IBM. We are both very, very differentcompanies. HP is, at its heart, a technology company and our focus ison technology for better business outcomes and how we deliver that.

When we look at our portfolio and where the markets are going, wethink HP's portfolio is much better aligned to the future markets. Wehave zero percent of our business in mainframes. The percent of ourbusiness that is in blades, in x86 servers and our Integrity line, is100 percent. So our technology is more focused on the things that areforward-looking.

Similarly, our software business, enterprise management, andautomation are clearly right at the top of every person's problem listfrom an IT perspective because they have to drive down the labor costsinside IT. So we feel that our portfolio is more technology-focused andon the services that wrap around that technology. So we think it isbetter aligned to where the market is going.

What is HP's take on virtualization, and where do you think the barriers are that stop people getting the maximum value from it?
Alot of people associate virtualization with the server, and what reallyneeds to be done by customers is to virtualize the entire data center,the servers, the storage, the networking, and the applications. And thefirst problem customers run into when they start doing that is: "How doI manage this thing? When I have physical servers sitting there,virtual servers and in a mixed environment, what do I do?"

The software we provide is to manage both the physical and thevirtual servers through a single pane of glass, a single set ofsoftware, and actually create the equivalent of a logical serverenvironment that is being managed. We believe one of the biggestimpediments has been: "How do I manage this thing once it is inproduction?" With our software, you are able to visualize it, plan thechanges, and actually make the changes in the environment.

Do you see a slow transition to virtualization?
Yes, and mostare going to find that the transition from physical to virtual is slowenough that they are going to have to manage both for a while.