HP follows mass layoffs with a software group reorg

I’d love to say that I managed to pry out the secrets of HP’s reorganization through the craftiest subterfuge, but the truth is their PR representatives were the ones who forwarded me the company memo.

It outlines, in broad strokes, that the company is moving away from treating its software organization as a separate business division and instead folds it into HP’s consulting organization, known as Consulting and Integration (C&I). This is particularly true of its business intelligence unit, which will now be lead by Kris Robinson, who like HP chief exec Mark Hurd came over from NCR’s Teradata spin-off. Service management and information lifecycle management software employees will also be more tightly woven into C&I. The memo, which was written by HP Software exec VP Tom Hogan, also announced an exercise in rebranding.

“Given the significant expansion in our skills and abilities to deliver more end-to-end solutions and in many cases solutions that do not depend exclusively on software-based IP, we have also elected to change the name of the organization from HP Software to HP Software and Solutions,” Hogan writes. “As our customers and the marketplace continue to seek solutions versus products to pressing business challenges and opportunities, we believe this is the right time to also rebrand our organization.”

I would think there would half to be a considerable marketing effort before that “and Solutions” is picked up by the majority of HP’s corporate clients, and I’m not sure it will mean much to them if it is. Yes, customers want “solutions” more than they want products, but that doesn’t mean they always see their vendor as a solution provider. HP has some great software products now – from NeoView to Mercury and a lot of other stuff. There should be ways for customers to purchase those products without necessarily getting HP’s expensive advice along with it.

There is also the issue of EDS, the acquisition that led to thousands of layoffs this week. HP has said that portions of C&I will move to the outsourcing giant, but whether those portions will include elements of the software group remains unclear. Although outsourcing and consulting are not the same thing, both activities involve a closer “touch” to the customer than a typical products division would have.

As for the culture clash and morale issues that HP is no doubt going through, Hogan is aware of it.

“My ‘ask’ remains the same as we move through this process,” the memo says. “First, don’t get distracted. We must execute and deliver another record quarter. Second, when and where you are asked, please engage and collaborate. Our success will depend on our willingness as individuals to engage and contribute with passion.”

And also on the willingness of IT departments to accept HP as their consulting/outsourcing partner as well as their software supplier. Yes, IBM does this successfully, but Big Blue built up Global Services first and then started cherry-picking application firms. HP is going trying to go both at once. Memo to Tom Hogan: You have your work cut out for you.

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