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HP Inks Opsware And Outsourcing Deals

Fiorina says 'secret sauce' will help company increase its IT market share
Hewlett-Packard signed its second mega-outsourcing deal of the year last week and formed an alliance to bolster its efforts in utility computing. Both developments reinforced comments that chairman and CEO Carly Fiorina made to Wall Street analysts: The company is on track to gain a greater share of the IT market.

HP firmed plans last week to take over the IT operations of telecommunications company Ericsson, including hiring 1,000 of Ericsson's IT employees. HP beat out IBM and others for the five-year contract; financial terms weren't disclosed. HP says it's one of its biggest deals of the year and includes implementing a common global operating environment, automating data-center operations, and consolidating servers and desktops. In April, the company signed a $3 billion, 10-year outsourcing contract with Procter & Gamble Co.

HP says it will resell Opsware Inc.'s technologies for automating software provisioning as part of its Utility Data Center offerings, which are designed to help companies cut costs by using computing resources on demand.

HP's focus on utility computing has gotten the interest of HP hardware customers such as Charlie Orndorff, CIO at Crossmark Inc., a technology vendor for the consumer-goods industry. Crossmark is considering HP's computing-on-demand model because of benefits in procurement, asset management, and reduced-capital expenditures, he says. Still, Orndorff hopes HP doesn't pull back on its investments in servers and storage as it grows services and utility-computing business. "Sometimes a company can get side-tracked from its core competencies where a majority of its clients have invested," he says.

Fiorina understands those concerns. "There are some who would say our breadth is a distraction," she told analysts. But HP's diverse portfolio, she says, is its "secret sauce."