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6/8/2011
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HP Services Expansion Triggers Hiring Spree

Exclusive: Executive VP Ann Livermore says the company is ready to pull out the stops as it targets high-growth opportunities like application modernization, mobility enablement, and industry-specific solutions.

Slideshow: Apotheker Takes The Stage, Paints An HP Cloud Vision
(click image for larger view)
Slideshow: Apotheker Takes The Stage, Paints An HP Cloud Vision
Hewlett-Packard is loading up on specialized consulting and sales talent as it prepares to take on incumbents like Accenture and Cap Gemini in high-growth, high-margin services areas like application modernization, mobility enablement, and industry-specific solutions.

"We need to hire some additional resources," HP executive VP Ann Livermore said in an interview Tuesday. "Our investments are going to be in sales people, delivery people, and in some cases around software development and intellectual capital development." Livermore wasn't specific about numbers, but said the company's recruiting efforts range from senior managers to consultants with specialized knowledge in areas HP is targeting.

HP is also looking for an executive to lead its services business and report directly to CEO Leo Apotheker. Livermore is in charge of the unit on an interim basis until a hire is made.

Her comments come less than a month after Apotheker said he was not satisfied with HP's progress moving beyond more generic service offerings like maintenance, repair, and IT outsourcing. "Despite our stated intention to change our services business, there never was any measureable shift in our services mix over the past several years. We had over-executed operationally and under-invested strategically and it became clear we were missing opportunities," Apotheker said during a May 17 conference call with financial analysts.

Livermore said the priority now is to restore growth to HP's $27 billion services unit, which has stalled over the past few quarters. Application modernization services are a major focus of the campaign. The company believes many businesses are at a state where they need to reengineer apps for the Web and the cloud.

HP also wants to deliver services that are highly tailored to vertical markets such as the public sector and transportation. To do that, it will use tools and expertise developed through its software business and in its labs. "We have some unique intellectual property," said Livermore, who noted that HP is in the process of rolling out a new passenger service system it hopes will be broadly adopted by airlines.

HP also is developing services designed to help enterprises take advantage of the mobility revolution. The idea is to help them create infrastructures that can support a wide variety of devices--from smartphones to tablets--without compromising security or stability. "We see almost every company grappling with how they can allow their employees to use whatever device that they want to use and not just a company issued laptop," said Livermore.

Beyond hiring specialized talent, HP hasn't ruled out entering new services markets through acquisitions, Livermore said.

The strategy isn't without risk. As it pushes into profitable areas like app modernization and consulting, HP will be competing against partners it has long counted on to resell its business software to end users. "We hope that software is sold and deployed by Accenture and Cap Gemini and other services companies too. But being so close to the R&D that goes into those products we have a lot of our own advantages," said Livermore.

Not only will HP be bumping into its partners as it hunts for new customers, it also will be competing with them for talent. "We hired an executive from Accenture to help us in our sales organization," said Livermore.

HP may have to cut staff in other areas that it sees as not sufficiently profitable or tapped out in terms of growth to balance its workforce. "In some areas, as the different businesses grow, we may choose not to replace people in other areas," said Livermore.

Whether it's all enough to finally make HP the services leader it wants to be remains to be seen, but Livermore is confident. "It's all about accelerating our presence in the application spaces and industry spaces."

Vendors are fighting it out in the market for integrated network, computer, and storage systems. In the new all-digital issue of Network Computing, we go ringside to help you pick a winner. Download the issue now. (Free with registration.)

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