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HP as software power? Maybe, maybe not, IT pros say

Hewlett-Packard, suffering from IBM, Oracle and Microsoft envy, resets its sights on software. But customers say it can’t sell what it has now.

Hewlett-Packard fancies itself a software superpower-in-waiting. HP data center customers aren’t so sure.

A big piece of Hewlett-Packard Co. CEO Leo Apotheker’s message at Monday’s HP Summit was that the company will boost its software portfolio significantly, either organically or through “disciplined” acquisition, and that it will invest in building higher-margin cloud solutions.  

I have doubts about [HP’s ability] to be as responsive or agile as the volatile cloud market would require … to me, this is Matrix Part Deux.

Kent Altena, technical engineer, FBL Insurance

He touted plans to build public cloud infrastructure on which customers will be able to  design, build and test software as well as a cloud-based “app store” for both consumer and enterprise applications. HP execs also stressed that the company’s new WebOS, which comes out of HP’s purchase of Palm Computing and runs on smartphones and tablets, will be the front door to myriad cloud-based services.

The IT giant leads the league in server sales and is coming on strong in networking hardware, and has long fostered an array of software, ranging from the now-defunct OpenMail email and OpenView (now BTO) systems management software. But it has a checkered past when it comes to bits and bytes. And HP customers see no indication that that’s about to change.

For one thing, they said HP can barely push the software it already offers.

 “In my view, HP has real difficulties selling software to its current enterprise customers. You can see this in the laggard Matrix sales,” said Kent Altena, technical engineer with FBL Insurance, an HP server shop in West Des Moines, Iowa.  HP Matrix is the operating environment for HP’s converged hardware.

Altena said that while HP clearly has the resources -- in manpower, technology and funding -- to get real in the cloud, “I personally have doubts about [HP’s ability] to develop the integration software its users would require, be as responsive or agile as the volatile cloud market would require, and even be able to leverage its sizeable VAR market effectively to get its products sold in the first place. To me, this is Matrix Part Deux.”

HP customers: Where’s the beef?
Others said HP’s presentation was fine as far as it went -- which was to provide a directional statement -- but woefully lacking in specifics.

“From what I have read and seen so far, this was a high-level plan and hitting on so many business areas, the challenge will be [whether] HP can best execute this strategy with in-house talent or will they look outside? I was expecting some sort of ‘HP is back’ presentation and was assuming it would include some more concrete dates/timelines,” said Pete Sclafani, CIO of 6Connect, a San Francisco data center consultancy.

Sclafani would like to see HP in a ‘first mover” spot. “Lately it seems like they keep playing the ‘we will have it soon’ card to keep interest. That is not a good long-term strategy and customers will get tired of it.”

Altena said HP could well go the VMware route -- snapping up outside technology and tying it together. But HP is dogged by a reputation for not doing a great job of such integration, especially compared to new arch-rival Oracle.

 “Former Opsware products have not been sold well under the HP umbrella, either by local VARs or directly from HP,” Altena said. “HP sales staff appears most comfortable in my organization when pushing the latest processor, printer, laptop or even promoting their storage platforms. The longer time-to-agreement of enterprise software sales just have not been a priority.”

Perhaps tacitly acknowledging that issue, HP CFO Cathie Lesjak said Monday that the company will build its sales force both in “quality and quantity.”

The CTO of a large Midwestern financial services firm agreed that HP will need to buy its way into software prominence.

The HP Summit message, in his opinion, was “what Wall Street wanted to hear. A top-line growth strategy, higher-margin businesses, increased dividend. Big company stance. Consumer plus business balance via the cloud. They’re going to have to buy into software. My bet is CA or BMC.”

That HP sees the need to buttress its software is not surprising given its hiring of Apotheker, a former CEO of ERP software giant SAP. Last year it also brought Bill Veghte over from Microsoft to head its software and solutions business.

While stressing HP’s existing strength in management software, Apotheker at one point said it was to HP’s “advantage we don’t have a legacy franchise to protect,” perhaps a jab at legacy software power (and partner) Microsoft, which has to negotiate its own cloud strategy carefully so as not to damage its on-premises software business.

None of what came out of the HP Summit surprised Kevin Armour, CTO at Paycor, a Cincinnati-based payroll processing company. “All hardware companies are talking [about] how they will move everyone to the cloud. All have hybrid approaches. The [HP] software stack seems like it would not apply to many if they are not providing Windows or Microsoft solutions,” Armour said.

“The WebOS [piece] is interesting because [WebOS] is way behind the other smartphone operating systems today. To catch up is going to be a big challenge.”

The other Midwestern CTO was even more dismissive about HP’s WebOS emphasis. “WebOS? Give me a break,” he said via email.

IBM envy?
HP is also seen as suffering from a certain amount of IBM envy.

IBM has done a fairly good job transforming itself from a hardware-oriented company into a major power in software and services. Oracle, another HP obsession, appears to be going in the opposite direction after buying Sun Microsystems and its hardware business and competing more directly with HP.

So it’s fate that HP will need more software business. The question is whether it will execute better this time out, customers said.

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