"We are continuing to see the government sector grow. HP has been focused on offering Western European governments ways of improving service levels while helping what used to be the Eastern Block build new IT infrastructures in the government space," said Kasper Rorsted, managing director of HP Europe, Middle East and Africa (EMEA).
Among the contracts it has recently finalised, HP, as part of a consortium, will provide e-mail services to the European Parliament.
HP has also signed contracts with the State Treasury of Slovakia, the National Employment Agency (ANPE) in France, the Belgian Federal Portal, the Swedish Parliament and the Republic of Bulgaria Ministry of the Interior. The resulting services and products are expected to roll out within several months, Rorsted said.
He declined to discuss the value of individual contracts, after governments requested that financial details be kept confidential.
According to Rorsted, the total market for government IT in EMEA is worth $80bn, with predicted growth rates of 9.2% for the next two years. "It is very hard to determine just what sort of market share HP has in this space as the government market has so many overlapping variables, but we believe that we do hold the majority market share and that HP's growth will reflect the general increase in the market."
HP credits its success in the government sector to its establishment of a sales force dedicated to the market and to the fact that HP works with "key partners" ranging from Microsoft to companies utilising open source software such as Linux.
As a result, HP has successfully defended its market share from rival companies that hoped the acquisition of Compaq and subsequent merger of the two companies would distract HP, according to Rorsted.
"We decided early on to organise our sales force with a vertical focus. We set up a dedicated sales staff that has a good understanding of just what governments need in terms of IT and how they are organised. Our customer focus is now paying off and we have been able to defend our space throughout the merger," Rorsted said.
Growth in both the government and private IT sectors has been driven mainly by services rather than product purchases, as businesses and governments attempt to put secure information systems, including mobile and broadband communications, into place.
"Particularly in the government [market], it is all very cost driven. Our customers ask, how can we improve efficiency to drive down costs while also ensuring the security of our data? The security aspect is coming more and more to the table," Rorsted said.
When it comes to security, Rorsted denied that open source software was inherently more secure than proprietary software. "A mixture of both open source and proprietary software is required depending on what you are attempting to keep secure. What we find is that, by far and away, most security breaches happen internally, so it is partly a matter of us assisting IT managers not just with things like patch updates but teaching them what to look for and how to keep systems secure from within the organisation," he said.
HP sees its primary rival in the government sector as IBM, although Rorsted said local companies were providing stiff competition in some markets.
Despite the fact that governments are seeking more help in establishing, maintaining and securing IT infrastructures for a variety of services, the slowdown in the global economy will continue to depress growth in the sector for the foreseeable future, with the relatively flat market of 2002 expected to extend into 2003.
"One of our biggest government customers in EMEA, Germany, is under severe financial pressure, which obviously has an effect on our contracts. Also, should there be a war in the Middle East, that would have a negative effect," Rorsted said.
The HP government contracts include:
- A deal to provide the information system for the State Treasury of Slovakia, including bringing increased transparency and efficiency to the finance management of the Slovak Republic, while also designing and implementing security into the system
- A two-year contract with the National Employment Agency (ANPE) in France as the preferred supplier for a project to provide 24-hour online service for its 22,000 users throughout France. The contract includes supplying Unix systems, HP Superdome and associated XP512 storage for consolidation of national applications for the agency
- A four-year deal to provide the Swedish Parliament with a secure IT and communications infrastructure, designed around HP Mobile Open roaming and offering the 360 Members of Parliament mobile access to the Swedish Parliament's IT network and databases
- An agreement with the Republic of Bulgaria Ministry of the Interior to upgrade and support the system that allows the government to issue all nationals with new secure ID cards, passports and driving licences
- Converting the Belgian Federal Portal into a transactional platform for citizens to perform such functions as submitting forms online, by providing, as part of a consortium, the complete IT infrastructure and outsourcing services required