HP to take on rivals with financial solutions

N Shivapriya, Las Vegas
The Economic Times

The transformation of Hewlett Packard (HP) from a printer company to a software firm seems to be becoming a reality. HP has unveiled a solution that helps IT managers run their operations with more financial accountability, pipping rival IBM and other players that address individual segments of the problem.

At its annual software summit in Las Vegas in June, the launch prompted many attendees to remark that HP seems to have known of the impending recession. HP executives said the solution was being worked on for at least two years now. Called IT financial management (ITFM), the solution integrates three key components — project and portfolio management (PPM), financial planning and analysis (FPA) and configuration management systems.

“Despite some signs of a recovery, there is still nervousness about spending. It’s going to be a hard journey in the next 12 months. Companies now want to cut costs rapidly — they are no longer to willing to wait for three, five or 10 years to recover their investment. They want it very quickly in 3-6 months,” said Andy Isherwood, VP, support and services, HP.

HP has done two large acquisitions — Mercury Interactive in 2006 and EDS in 2008 — in an effort to build a software and services portfolio. The results of these acquisitions and a number of other smaller ones HP has done in the last few years are finally bearing fruit. HP has spent around $6 billion on acquisitions so far.

Its current offering fulfils the need that has been felt by the market for some years and which has become more urgent with the recession, said Peter O’Neill, vice-president, Forrester Research. “It is impressive and unique at the moment and very clever of HP. IBM doesn’t have any similar productised offering yet — so it is true that HP has a head start in this,” said O’Neill.

In a report brought out in May this year, Forrester recommended that software product vendors should start thinking of IT financial management. The global research firm has predicted that the market for managing IT like a business would see significant growth in the next five years and exceed $800 million in 2013. HP’s real win is in putting together these various pieces to offer one comprehensive solution, according to O’Neill.