HP Adds Data Center Construction Services

Hewlett-Packard has added building construction to its list of services for companies looking to launch or expand a data center.

HP on Feb. 15 officially launched its Critical Facilities Implementation service, described as the "fourth leg of the stool" because it rounds out HP's data center services, Rick Einhorn, worldwide director of HP's Critical Facilities Services (CFS) unit, said in an interview. The other three related services include data center design, testing, and then operating the facility.

CFS stems from HP's acquisition in 2007 of EYP Mission Critical Facilities, a consulting company specializing in data center cooling and energy efficiency. Einhorn was president of the 350-employee company and joined HP to run the CFS unit. That same year, HP paid $1.6 billion for Opsware, a maker of data center automation software.

Einhorn acknowledges that large U.S. companies typically manage their own data center construction, hiring separate contractors to design and build the facilities. HP believes the biggest sales opportunities for its construction services will initially be in Brazil, China, and India, where business are growing so rapidly they prefer to hire one company to handle the whole project, which usually gets the job done quicker, according to Einhorn. In the U.S., HP expects to eventually land data center construction jobs among medium-size business, which have more limited staff than big companies, so tend to outsource such work.

China is an exception. Under Chinese law, HP will have to hire a company in China to construct the building for a data center, while HP handles the interior construction, Einhorn said. In all data center construction projects, HP will not actually build the facilities, but hire others to handle the construction. From the customer's perspective, HP will be the only company in charge. "The end user is just dealing with the HP folks," Einhorn said.

Getting into the data center construction business is important for HP, because it opens up sales opportunities for the servers, storage, and networking equipment that eventually go inside. HP services do not require that the company's products be used, but consultants are certainly ready to bring in salespeople at the customer's request.

HP's use of services to help drive sales is the same approach being taken by rival IBM. Demand for data center equipment is growing. Worldwide sales of networking equipment, for example, was expected to hit $7.6 billion in 2010, a 67% increase year to year, according to Infonetics Research. Storage area network equipment alone was expected to double by 2014 to $6.6 billion.