HP Execs: 'Don't Spend More, Spend Smarter'

HP wants you to spend less on IT.

To help you do so, it's willing to sell you Hewlett-Packard products and services that, in the long run, may help you save. That's the message coming out of Palo Alto as company executives retune HP's message for the recession.

"Best-in-class IT organizations spend about half as much as the average company on technology as a percentage of revenue," said Ann Livermore, executive VP of the Technology Solutions Group, in a statement on changing the economics of data center technology. The way to cope with the downturn is to focus "on both strategic cost reductions and supporting long-term business growth" at the same time, she said.

One reason that HP is putting its savings foot forward is that it now owns EDS, and EDS consultants are experts in outsourcing part of the data center for lower operating costs, said Deborah Nelson, senior VP of marketing for technology solutions, in an interview. In one- to two-day consultations, they can "look across your landscape and come back with recommendations," she said.

EDS consultants also can advise on "flexible sourcing," or letting the downturn give you the chance to do things differently. Some applications, such as CRM, can be shifted to software-as-a-service providers. Usually applications are installed to meet an assumed need for high availability, but availability costs money in data center overhead.

"With a new data center, 15% to 25% of the cost can be saved with a hybrid, multitier design" where some applications are designated less crucial to the business and allowed to run on lower-availability systems within an acceptable level of risk. Existing data centers can be retrofitted to allow some lower-availability applications, or some applications can be moved into the cloud, decreasing the server investment, she said.

HP offers virtualized storage arrays with management software, and Nelson said a study by the Edison Group, IT consultants in New York, found that they can save IT organizations can save 30% to 40% of their storage administration costs by virtualizing their systems.

Nelson said IT organizations can save backup and recovery costs by implementing HP Data Protector. It can be used to protect data on servers and forestall investment in separate data-protection systems for virtual machines. Data Protector works with both real and virtualized servers, said Nelson.

HP also offers Project and Portfolio Management Center, a suite of software products that can discover and map the existing software infrastructure or capture key data on the progress of an application project. Rigorous use of its management capabilities will save 6.5% on the cost of projects or management of the existing portfolio, claimed Nelson. Project and Portfolio Management Center is also available as an online service.

Whatever your approach to cost savings, it's important to prioritize your technology investment based on their business value, both in the short-term savings and long-term strategy.

"Customers' budgets are very constrained, but demands just keep growing. Don’t spend more, spend smarter," Nelson said.

Even with the economy in a fierce downturn, HP CIO Randy Mott is preaching a high-risk, capital-intensive approach to transforming IT operations. InformationWeek has published his thoughts on the topic. Download the report here (registration required).