Global CIO: Hewlett-Packard CEO Hurd's Strategy: The Infrastructure Company

Promising that HP can combine massive scale and innovation, CEO Hurd says it will separate itself from IBM and others by having a complete end-to-end line of hardware, software, and services.

Bob Evans, Contributor

October 25, 2009

4 Min Read

3) Cloud Computing "I had to give a presentation to a group of CEOs, and I was representing us as an industry (circles his arms to crowd as indicator of inclusion), and here I am talking about the cloud and all kinds of cool things that can happen with the cloud, and, and I got a lot of boos, um, after that, and it started with the whole term, 'cloud.' From a non-technical CEO perspective, cloud computing doesn't sound very clear to them. So their view was, 'Can you guys ever come up with terminology that sounds a little more business-friendly than 'cloud computing?'

" 'Because,' " Hurd said in speaking for the CEOs in that earlier audience, " 'we'd like to be in the clear skies—we'd like to be with simple things we can understand—so if this cloud computing is so cool, try to break this down into more simple, clear services that people can actually get from this thing that's gonna help my business be a better business.' "

And this comment on private versus public clouds: "I think you'll see us continue to work on services we can deploy both inter- but just as much intra-firewall, where we can provide services within someone's security infrastructure to help offload taks that frankly we can leverage."

A moment later, the interviewers asked Hurd for his impression of the term cloud computing: "I don't like the term—no, I don't like the term."

4) HP Software Noting that HP is the sixth-largest enterprise software company in the world, Hurd said "we don't want to be bigger in software just to say we've got a bigger software business but it's an eclectic array of stuff. We actually want to have a software business that aligns to our strategic direction. So for us we wanted to align with this [infrastructure] map that I've described. We're very big in services, for example, and services in the future we believe will not be a labor-driven model but actually an automated model: how do I automate as many of the functions as I possibly can into standard offerings? That's done through software, and we want to lead in each of those categories in the context of all the different infrastructure-management categories."

All in all, a fascinating discussion and disclosure from Hurd as he articulated quite clearly what HP wants to be: the infrastructure company, deeply invested in and committed to the entire spectrum of enterprise-level hardware products regardless of margins so that HP can command the lowest possible prices from its supply chain.

Meanwhile, Hurd intends to push HP's services business more deeply into verticals, and he also sees some very attractive opportunities in business analytics.

To me, that surely doesn't sound like a company that, to use Hurd's reference, that is being chased by IBM—because IBM's deeply into services, and verticals, and business analytics already. But IBM is most certainly not deeply committed to all facets of the hardware business, specifically PCs and other low-margin commodity categories.

But as Hurd made abundantly clear, he is committed in those areas, and is riding that commitment as a key element of HP's overall strategy as "the infrastructure company." So don't be fooled by the company's similarities—their sizes (HP about $118 billion, IBM about $95 billion), their blend of sophisticated products and services, their global reach, and their strong reputations among customers.

For all those similarities, Mark Hurd has just committed HP to a strategic vision that's markedly different from IBM's, and that underscores that these are two very different companies with two very different CEOs pursuing two very different approaches to and visions of the business-technology market.

For CIO's that's a great thing—because it's always nice to have choices. And Mark Hurd's new vision for HP will ensure that CIOs have distinctly different choices in HP and IBM.

Recommended Reading:

Global CIO: Why Hewlett-Packard Must Articulate Its Enterprise Strategy

Global CIO: An Open Letter To Hewlett-Packard CEO Mark Hurd

IBM's Game-Changing Plunge Into Predictive Analytics

Global CIO: Oracle Nailed By EU Protectionism As HP And IBM Raid Sun

Global CIO: Oracle Dumps HP After Co-Creating 'Most Successful Introduction Ever'

As Regulators Jam Oracle, IBM And HP Snatch Sun Customers

Global CIO: In Oracle Vs. SAP, IBM Could Tip Balance

Global CIO: HP And IBM To Add 4,000 U.S. Jobs In Three Small Towns

About the Author(s)

Bob Evans

Contributor

Bob Evans is senior VP, communications, for Oracle Corp. He is a former InformationWeek editor.

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