HP's New Unit Meant to Spur Storage

HP, stung by recent poor storage performance, has formed a new software unit in an attempt to boost its data management story. (See HP Forms New Unit and HP Reports Q4.)

The new Business Information Opimization unit is the first step in a broader repositioning strategy, as HP looks to emulate its rival IBM by wrapping services around storage software in an attempt to lock large customers into its technology. Roadmap details remain fuzzy.

HP execs say the new unit will sell software and hardware, including storage gear, from across the company. A business intelligence wing will be responsible for Neoview, a high-end data warehousing product that HP has been developing for the last two years. A separate information management wing will focus on archiving and management of data.

At this stage, the vendor is keeping specific product details under wraps, although execs confirmed that these are likely to involve solutions geared toward specific verticals. For instance, one solution set could be geared toward helping telecom firms cope with customer churn, while another would help airlines handle bookings.

The business intelligence wing is headed by former IBM and Teradata exec Ben Barnes, who told Byte and Switch that HP will be formally unveiling its Neoview product sometime in the spring. "Our first thrust is to have a very robust industry standard data warehousing platform," he says, adding that sector-specific solutions will come sometime later.As far as the information management wing is concerned, HP is playing its cards even closer to its vest. The vendor is yet to announce someone to head up the unit and will not release any roadmap information until that person is installed. This, according to HP, should happen within the next few weeks.

At least one analyst feels HP's made a shrewd move in its attempt to claw storage share from rivals such as IBM and EMC. "HP needs to hold, retain, and generate value outside of just shipping components," says Greg Schulz, analyst at the StorageIO consultancy, noting that data warehousing is a good fit for industries such as retail and telecom.

Setting up a separate division, according to Schulz, also lets HP focus storage sales more carefully. The vendor can use the data warehousing division to make money in new markets via value-added services. "It would be interesting to see what else goes into this business, for example, things like compliance-related technologies," he says. The unit may even attract its own M&A activity, he speculates.

Last month HP acquired data warehousing consultancy Knightsbridge Solutions for an undisclosed fee as part of its services push, which will now be rolled into the new software unit. Another recent HP acquisition is data archiving specialist OuterBay, which focused on both online database archiving and long-term data retention. HP wouldn't say whether OuterBay will be included in the new unit, though it seems a likely fit. (See HP Hops on OuterBay and Oracle Validates OuterBay.)

HP's Barnes would not comment on the vendor's future acquisition strategy today.Certainly, HP needs to do something to rejuvenate its storage story. The vendor's storage business grew only one percent year-over-year in its fourth quarter, thanks in part to a slowdown in midrange EVA sales and less-than-stellar performance from its networked storage products. (See Storage Hurts HP's Quarter and HP Storage Gets off the Deck.)

At HP's recent annual meeting for securities analysts, execs outlined a number of key areas where they hope to regain lost storage ground during the coming months. These include an aggressive channel-led assault on the mid-market and a renewed focus on the SMB sector. (See HP Rethinks Storage Plays, HP Fills In SMB Storage, and HP Builds SANs for SMBs.)

Apparently, another strategy is the new unit.

Bringing different technologies together in the Business Information Optimization unit will be easier said than done, warns Charles King, principal analyst at Pund-It Research. "Getting it all to work together is not a simple process," he says. "Once you have got the solution together, getting it out to market and making customers believe in the product is another big challenge."

James Rogers, Senior Editor, Byte and Switch