Hewlett-Packard will look to mergers and acquisitions, as
well as its own research, to beef up software, especially for the enterprise, says Ann Livermore, executive VP of HP's Technology Solutions Group.
Hewlett-Packard may make acquisitions in software and services to help continue its profitable growth path and extend its reach into the enterprise, a top HP executive said Wednesday.
"The software business is important for us, both based on revenue and income statement. On top of it, software is incredibly sticky when it's sold into our large accounts. So it's important to us for both of those reasons,” said Ann Livermore, executive vice president of HP's Technology Solutions Group, at the UBS Enterprise and Technology Services Conference in New York. “You will see us continue to expand our software portfolio through M&As, as well as our own organic R&D investments."
In HP’s most recent quarter, software accounted for only $330 million of the Palo Alto, Calif., company’s total sales of $22.6 billion. Still, the software business is on a 20 percent year-over-year growth rate, led by such products as HP OpenView and HP OpenCall. During the quarter, HP also closed its acquisition of Peregrine Systems, which added to the asset and service management functionality of the HP OpenView lineup.
Livermore appeared at the investor conference a week after HP reported its quarterly earnings, which impressed Wall Street and sparked a mini rally in the company's stock. She also reiterated recent comments by HP CEO Mark Hurd, who promised to boost investment in the channel to sharpen HP’s focus on small and midsize businesses.
"We're going to beef up some of our midmarket channel programs, and [we are] trying to time some of these investments as we get our cost structure healthier underneath it," Livermore said.
During a question-and-answer session, Livermore downplayed the prospect of more aggressive price competition from Dell, noting that she hadn’t noticed any change in market behavior over the past three or four quarters. Livermore also said that in the storage space, EMC remains a big rival, but she doesn't see much shifting of either company’s installed base.
"EMC is a tough competitor," she said. "They are very talented in their go-to-market activities. We look at [their] product launches. We know we have to be ready to fight them off."
HP has benefited by adding products with Advanced Micro Devices chips earlier than competitors, Livermore said. Dell announced last week that it would produce its first AMD Opteron-based servers by year's end.
"Clearly, the AMD bet was a very important choice for us. It's always better, when you have a critical part, to have dual suppliers," Livermore said, adding that HP continues to invest in its Intel-based product line. "Making [the AMD] bet early and then ramping it has been very helpful to us. HP has 30 different product lines using AMD products."
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