Merged HP to boost consulting and services

Hewlett-Packard Co. will focus on delivering a wide range of IT consulting and business process services as part of its postmerger strategy, a senior executive said last week.

To lay the groundwork for that effort, HP is realigning its 65,000-person services organization into five major areas: IT and business governance services, agile and mission-critical infrastructure services, extended enterprise services, open-environment services and next-generation technology services.

The goal is to expand HP’s services capabilities beyond its current emphasis on IT infrastructure support, said Juergen Rottler, a senior vice president with HP’s services organization. Going forward, HP’s emphasis will be on building capabilities that let it engage with users from the application design stage right through integration, management and end-of-life/migration services.

“We are talking about significantly more end-to-end services that start with customer business problems rather than just a technology,” he said.

Don’t expect to see any major new HP services offerings in the near term though, cautioned Eric Rocco, an analyst at Gartner Inc.’s San Jose-based Dataquest unit.

For the next 12 to 18 months or so, HP is likely to be preoccupied with the task of integrating its own services organization with that of Compaq Computer Corp., Rocco said.

“But their goal certainly is to take what is currently the largest IT infrastructure support organization in the world and craft it into a full-service company like IBM,” he said.

As part of that strategy, Rocco said, look for HP to make targeted acquisitions in areas where the company needs to quickly build capabilities.

HP’s unsuccessful bids last year to acquire consulting giant PricewaterhouseCoopers and Comdisco Inc.’s disaster recovery unit are indications of the company’s strategy in this area, Rocco said.

In the short term, HP’s strategy will rely on taking maximum advantage of its combined strengths in horizontal technology segments such as Microsoft Corp.’s Exchange and in vertical segments such as the telecommunications sector, said Laurie McCabe, an analyst at Summit Strategies Inc. in Boston.

“But they still have a long way to go on the consulting side to catch up with an IBM or an EDS,” McCabe said. As a result, look for HP to rely heavily on channel partners to deliver key services capabilities while it builds its own, she said.

HP Mulls Retreat From Middleware

HP may discontinue some of its middleware products as part its postmerger software strategy.

In a briefing with financial analysts in Boston last week, HP executive Peter Blackmore said the company is rethinking its middleware strategy and is “considering retiring some assets in that space.”

Going forward, the company will depend on partnerships with other software vendors to meet customer requirements in this space, he said.

An HP spokeswoman said the company will make a definite statement regarding its middleware plans the week of June 25, at an HP event in Seattle.

A core part of HP’s middleware suite is its Java application server, which it acquired in October 2000 when it purchased Bluestone Software Inc. HP has made the software available as a free download to users in addition to bundling it along with its HP-UX operating system.

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