HP to address ‘weakness’ of its storage business division

HP is on a mission to get its storage business back on track, following disappointing performance in that sector. In a conference call to discuss HP’s most recent quarterly earnings, newly-appointed CEO Mark Hurd acknowledged that storage remains to be the company’s main weakness, with revenue for the quarter down 6% year-on-year.

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By  Caroline Denslow Published  May 29, 2005

HP is on a mission to get its storage business back on track, following disappointing performance in that sector. In a conference call to discuss HP’s most recent quarterly earnings, newly-appointed CEO Mark Hurd acknowledged that storage remains to be the company’s main weakness, with revenue for the quarter down 6% year-on-year. “We have issues in storage,” Hurd told analysts at the conference. “We have a lot of work to do in storage to get this business back on track.” Hurd was speaking following the company’s recent StorageWorks event, where it made what it described as its largest ever series of storage announcements (see IT Weekly, 21 - 28 May). HP’s lack of focus is the biggest issue the company’s storage business faces, said Ashraf Helmy, StorageWorks product marketing manager, HP Middle East. Speaking to IT Weekly last week, Helmy said that the company needed to improve its R&D activities to keep its storage line competitive in the market. According to Helmy, sidelining R&D has resulted in delays of product launches. However he was quick to add that the company has already started efforts to address the problem. “What was happening was that the focus was mainly on the operational and structural side. The R&D, with respect to storage, was not up to the level of HP’s views,” Helmy explained. “But for some time now, management has decided to focus more on the storage business. We are now pushing more into R&D to develop new products that meet our customers’ requests.” The updated portfolio unveiled at the StorageWorks conference marked the company’s renewed product push into the storage space. Key to HP’s strategy is its Information Lifecycle Management (ILM) services, which Helmy said is now the company’s priority focus area. “We are capitalising on our StorageWorks Grid strategy. We are capitalising on our installed base and our product availability,” Helmy said. Ultimately, HP wants to position itself as a total storage provider, integrating both storage hardware and software into unified solutions that will cater to what the market needs and not what technology dictates. “Our main commitment is to invest and innovate for our end customers. We are investing in portfolio expansion and in positioning for growth. “More importantly, we are investing to improve customer experience with total solutions rather than pieces of the puzzle,” Helmy said. Improving customer experience, according to Helmy, will involve HP working with clients to help them get the most out of their storage investments, and delivering products that are highly adaptable and scaleable. “The future storage architecture [involves] enabling customers to have better products that allow them to pay more only when needed or when their business is growing. Customers need these types of solutions. Rather than upgrading just to improve on performance or capacity, they need to capitalise on what they already have,” explained Helmy. “Customers in the region still look at storage as devices for storing data, not for managing their information. We want to help them understand the benefits of a total solution and use their products to the maximum extent,” he added. HP’s challenge does not end there. To put the company back on the storage map, Hurd said that they needed to fill in gaps not only in HP’s product line but also in its sales force as well. “The good news is that our product offerings are competitive. The bad news is that we have not made enough progress in building out our specialist sales force, and we’re not closing enough deals in the field,” said Hurd. HP in the Middle East is looking at expanding its sales headcount, not because it needed to acquire missing specialised skills but to accommodate its growing storage market, said Helmy. “We have enough [sales specialists], however our growth plans would require more resources in the near future. From an industry perspective, we have enough sales specialists and storage consultants who can deal with each industry that we cover. We are looking at expanding into the SMB sector more, and for that we need additional resources,” Helmy elaborated. “We need to expand to meet the growing market.”

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