Half of all companies suffer Innovation Gridlock, says HP

HP survey shows companies unable to innovate in IT as spending is tied up in maintaining legacy systems

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Half of all companies suffer Innovation Gridlock, says HP Innovation gridlock is causing companies lost time, resources and opportunities, says Hoonhout.
By  Mark Sutton Published  May 14, 2010

Almost half of all companies are unable to innovate in IT because funding and resources is tied up in servicing legacy systems, according to new research carried out for HP.

The worldwide survey of 560 business and technology executives found that 46% of respondents said their organisations suffered from ‘Innovation Gridlock' - where the business in blocked from driving innovation as the majority of funding is consumed to maintain the existing infrastructure.

The companies surveyed on average spent just 30% of their budget on new initiatives, versus 40% on mission critical systems, 30% legacy systems. Half of respondents said that too much budget went to spending on maintain operations to prevent investment in IT innovation, although fears about the economy (53%) was an equally significant factor in not investing.

Innovation gridlock cost almost all of those surveyed in terms of lost opportunities, lost time and lost effort from resources. In specific areas, 70% said gridlock stops them from investing in new technologies to meet changing business needs, 64% said it prevented them from creating flexibility in operations, and 58% said it stops them from keeping up with competition. Just under half said that innovation gridlock also stops them from meeting compliance and regulation requirement or generating rapid change to meet changing business needs.

John Hoonhout, managing director of HP Middle East told ITP.net: "We sampled 560 executives globally, including some in the UAE, and the main finding is that companies are suffering from something we have termed ‘innovation gridlock', where IT organisations are struggling to introduce innovation, because the majority of their funding, and the majority of their resources are consumed by running their existing environment.

"Almost one in two respondents say that innovation gridlock is preventing them from keeping up with the competition, 95% of respondents said that it was causing lost opportunity. Innovation gridlock is real, and it is effecting a big proportion of the industry," he added.

Hoonhout said that HP was looking to address the situation by giving organisations tools and services to create self-funded projects - essentially removing unnecessary costs or resource burdens from existing IT applications and infrastructure, and then using those savings to fund innovation projects, without the need to increase current IT budget.

"We can help the customer to look at the opportunities to improve their applications, make their infrastructure more efficient and focus on re-directing investment into innovation areas," Hoonhout said.

To tackle innovation gridlock HP is offering an Applications Modernisation Transformation Experience session, a hands-on service which will show customers how they can modernise, or replace their legacy applications to reduce complexity in their IT environments. HP is offering the first 25 customers who respond the chance to get this assessment for free, while other companies will also be able to access HP's full services portfolio.

Also in services, HP has launched a new Cloud Service Automation software and services solution, which is intended to help clients to assess and plan how they can use public or private cloud computing for greater efficiency.

HP is in the process of introducing financial services for the Middle East region, which will provide HP Modernisation Funding Options, to help customers to fund investment in new technology.

The initiative is also complemented by the launch of two new HP ProLiant servers, the DL360G7 and DL380G7, which have been designed to increase efficiency and cut costs through a 27 times performance-per-watt increase to improve power consumption and a consolidation ration of 20:1 or better, meaning customers can replace many old servers with just one device.

HP is further improving server performance through improvements to its HP Insight Control server management software, which is included as standard on HP servers. Improvements include the introduction of Integrated Light-Out Advanced (iLO3) which improves system operation and efficiency through simplified and improved provisioning and set up, power management, thermal optimisation and system health monitoring.

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