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2/16/2010
10:14 PM
Bob Evans
Bob Evans
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Global CIO: Hewlett-Packard's Megadeal With Shell Raises Strategic Profile

Will this large, complex, and deeply strategic energy deal help HP shake the tired tag of world's biggest PC maker?

Hewlett-Packard's credibility as a serious networking player got a big boost this week as Royal Dutch Shellthe #1 company on the Fortune 500 listpicked HP to develop a wireless sensing system to collect and distribute seismic images from challenging underground environments to enhance Shell's ability to locate oil and natural-gas reservoirs.

Shell didn't mince words about the strategic significance of its collaboration with HP, which will "represent a leap forward in seismic data quality that will provide Shell with a competitive advantage in exploring difficult oil and gas reservoirs," said Gerald Schotman, Shell executive vice president, Innovation/Research and Development, in a press release.

That improvement will enable the $458 billion energy company "to fully realize the potential of Shell's processing and imaging technology on land," the joint statement from the companies said.

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The megadeal demonstrates that HP has proven to the largest industrial company in the world that HP wireless and other technologies provide the best solution for a Shell project that is as mission-critical as it gets: since Shell produces 3.2 million barrels of gas and oil every day, that means it has to search for and locate an additional 3.2 million new barrels every 24 hours to quite literally keep the pipelines flowing.

Indeed, for HP, the deal's significance extends beyond the credibility boost to its networking business (soon to be enhanced via the acquisition of 3Com) and touches on two other key issues for HP:

1) The HP technologies could "transform the ability to pinpoint abundant new oil and gas reserves," said Joe Eazor, HP Enterprise Services senior VP and GM. If that does indeed come to pass, then HP could claim the leadership spot in a market that is indispensable to the global economy, giving it entre to additional vital and wide-ranging opportunities to deliver transformational capabilities to its global enterprise customers. And then there's the vital matter of product-line breadth:

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