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Hewlett Packard Enterprise: think of us as a startup

As Hewlett Packard Enterprise and HP Inc finally part ways, UK managing director Andy Isherwood shares some insight on what the future holds for the newly minted enterprise business

As of midnight on the morning of Monday 2 November 2015, HP has brought to a close a year-long process and opened a new chapter in its 75-year history, as it splits into two different companies, HP Inc, the printing and devices business, and Hewlett Packard Enterprise (HPE).

HPE is billed as a new force in enterprise IT, with a turnover of $53bn and one of the most extensive and comprehensive product portfolios in the industry, stretching from servers through storage, networking, services and more. This makes it, or so it claims, one of the last IT suppliers standing – if not the last – with such extensive capabilities.

For HPE UK and Ireland managing director and senior vice-president Andy Isherwood, who took the helm of the old HP business in this country back in 2013, the split is an opportunity to refocus his energies on a more nimble and agile business.

“Looking at myself and what I do, I haven’t now got to worry about everything from someone buying a printer in Currys all the way through to a large enterprise organisation,” he tells Computer Weekly. “My job starts and stops here now. I have more time to get it right in this space rather than spread myself thin, and this focus actually is pretty important.”

While Isherwood may be looking forward to having the day-to-day concerns of the printer business off his plate, other HPE staff will also be feeling a little less stress. As the separation has moved ahead, HPE has quietly carried out a major refresh of a number of its systems, bringing in more software-as-a-service (SaaS) offerings to change the employee experience for the better and to move quicker in front of its customers. It is, says Isherwood, a true reinvention.

“We’ve reinvented ourselves in many ways over that 75 years, and what we want to do is make sure that people feel that actually we’re starting a new company with a core set of values,” he says.

Those core values fall into three categories, Isherwood explains: firstly, to continue to partner with channel businesses as a key to getting the market coverage HPE desires; secondly, to reinstate its research and development (R&D) capabilities; and thirdly, to tear down the old mindsets of its employees and rebuild them with a “bias towards action”.

“We’re coming in on Monday with a new brand, a new company, a new office, everything is new,” says Isherwood, “and we’ve got to go and question everything that has been done in the past, every single process, and every single customer engagement.”

The customer play

For customers, he says, HPE wants to maintain the strength that the old HP has been known for, and combine that with the agility, speed and presence of a startup business. The strength comes from its existing market share in IT infrastructure and its broad portfolio and services capabilities, says Isherwood.

I think customers appreciate the value we have as an HP company but hopefully will see this focus, innovation and agility come through in how we turn up in the market
Andy Isherwood, HPE

“Who else has what we have in terms of the best-in-class infrastructure from storage to networking, to hyper-converged, through to the transformational services that let people move their infrastructures today and build for the new world? IBM doesn’t. It’s sold most of its infrastructure assets. Dell? Well, they’re going to be a little bit confused over the next couple of years. So who’s out there who does what we do with the values we have?

“I think customers appreciate the value we have as an HP company but hopefully will see this focus, innovation and agility come through in how we turn up in the market. It’s building on what we do, not throwing out the past,” says Isherwood.

HPE will now focus on four main areas as it takes its enterprise customers on a journey towards a new style of business using a new style of IT.

Firstly, explains Isherwood, it will spearhead the transition to a hybrid infrastructure. Conscious that many enterprises have a lot of technology under the bonnet that is creaking and cannot support them as they try to become more agile themselves and compete with the Airbnbs and Ubers of this world, HPE says the new infrastructure needs to be hybrid and open to let people move and place workloads where it is most effective to do so.

Secondly, it will “empower a data driven organisation”, whether that is machine data, application data or unstructured data, to extract meaning from it and capture the essence of what customers want to do with the insight it can provide.

Thirdly, on security, it will push its software, managed services and consulting with renewed vigour to assuage the worries of customers subjected to a constant barrage of news stories about security breaches.

Finally, it will focus on enabling workplace productivity, to create best-in-class experiences for employees with more meaningful mobile solutions.

What to expect?

Much of what the average enterprise CIO can expect to see is predicated on these four areas of focus, but Isherwood picks out the transformation towards the hybrid world as key to the experience of being an HPE customer in the years to come.

“For me it’s doing two things. Customers have legacy infrastructure and have to transform it to lower costs very quickly so they can compete with new players,” he says. “Additionally it’s making sure they’ve got an infrastructure in place, whether on- or off-premise, that allows them to spin up ideas very quickly.

“If you haven’t got the infrastructure in place to do that you’re not going to be as competitive or quick as those people coming into the market without legacy IT who will typically spin up in a public cloud.

“Our infrastructure will allow people to do that in the best way, whether it’s converged infrastructure, flash storage or mobile – people will see those disruptive technologies that we’ve invested in over the past couple of years really start to come into play significantly, and then obviously they’ll continue to see us lead in the service space,” says Isherwood.

Return to R&D

All this will be backed with increasing investment in HPE’s R&D capabilities, notably in its Bristol laboratories, where its teams are working on The Machine, its memory-driven supercomputer architecture, first announced at HP Discover in 2014, which the firm claims will force a complete redefinition of what compute looks like in the next five years.

On top of this investment – the former HP spent $3.4bn per year on R&D before the split – there will be more money for new recruits. Isherwood already plans to take on 350 to 400 graduate staff this year, as well as 150 students on placements and around 100 apprentices. This, he says, is a way of trying to change how new ideas and innovation enter the organisation

HPE will also shortly be moving its central London office to a new location that will also host its first customer demonstration centre in Europe, through which it hopes to help better articulate its plans and solutions.

“Customers often say to me that they are amazed at how quiet we are about what we do and what we’ve got. This is about how we take what we do to them, and engage with them in creating plans and strategy,” says Isherwood. “We’ve not been brilliant at that in the past, so it’s quite exciting that we can now have that sort of facility in Europe.”

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A "startup"?
You mean to think of HP as a poorly-funded-scrambling-to-figure-out-how-to-do-something-as-fast-as-possible company?
Things must be worse than I thought!
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This is a startup like I'm a toddler again. See, I said it so it must be true. What say we all chip in to help this little fledgling company get ahead. Except it's hardly a fledgling anything and it's already far, far ahead. And it's not so little either. Whatever else it may do, HPE doesn't seem very good at grasping reality. It is, however, great at corporate spin....
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HPE ...... A start-up business, or a legacy of past failures?

In reality we are looking at three parts: firstly the very successful legacy SW division, including some much needed investment into the Autonomy vision. Secondly a small services division within HP that had never grown. Llastly the appalling legacy of the worst IT Services provider in history, EDS. An organisation so fixated on winning commission and revenue it would give any amount of shareholder value away to win bad business.

So we have to look at indications of the turnaround strategy that will be HPE and unfortunately it seems long term form is running strong. I remember discussing EDS with a senior IT Exec at Fidelity. His long term career had seen EDS failures on many fronts. Further, EDS was a pure IT outsourcing company, yet at the height of the labour arbitration mania EDS decided to outsource their offshoring outsourcing to another IT outsourcing provider! I am sure the corporate story has many reasons. But no self-respecting organisation would buy into the double margin, ineptitude and down-right corporate incompetence that strategy indicates in the modern managed services arena. However thankfully the legacy HP India Operation delivered CRM, Finance and Supply Management to a PC manufacturer who beat Dell and others in the Microsoft personal PC and printer arms race. So surely we have a match?

That match seems not to have materialised. What would be interesting to see is if any of the EDS management really survived the integration and whether the success of HP’s offshoring of its own enormous business processes and IT could be built on. Well the simple answer seems to be a well-qualified no. The latest announcement on cloud is the proof point. Take one step back and look at the facts:

1. HP is one of the leading, if not the leading, IT HW supplier in the market
2. HP has one of the top two IT Management SW capabilities
3. HP has multiple and highly modern, green etc. DC's across the globe
4. HP through EDS has one of the largest (if most unsuccessful) IT outsourcing organisations

Yet the cloud is beyond them. This feeds back into where has HP gone since the EDS acquisition. It seems not far. Acquisition is about delivering an asset which gives shareholders and customers something to celebrate, to see value from and drive profitable growth. This just seems not to be the case.

The indicators are for all investors that the EDS hierarchy who gave their investment money to customers to fund their commission cheques, still stands tall. Probably in the over inflated middle to senior management layers that blight this type of organisation. If an outstanding IT company like HP has to outsource their cloud offering to Microsoft, as market leading as it is. Then investors and possible customers have to wonder if the management is still lead by the incompetence that marked EDS out as the ultimate corporate failure that it clearly was. Start-up? No.
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