HP Services Stay Self Centered

Hewlett-Packard Co. (NYSE: HPQ) is rounding out the services side of its storage business with five new offerings, as well as an enhanced version of its pay-per-use program for customers of its high-end XP storage arrays (see HP Expands Storage Services).

The new services are more task-oriented than HP's traditional storage consulting services -- and, as one might expect, each one is effectively geared around HP's own storage software and hardware products.

The offerings include storage optimization, intended to improve the utilization of existing storage resources; "data sanitization," which rewrites hard disks to eliminate all traces of their existing data (so it doesn't end up in the wrong hands); data replication; disaster recovery management; and storage area management.

Along with the other major storage vendors, HP in the past couple of years has been putting more resources into professional services, partly in an attempt to offset flat (or declining) product revenues, says Doug Chandler, an analyst at IDC.

"With some of these new services -- like storage optimization -- HP has realized there's a market opportunity there they didn't realize was there before," Chandler says. "But I don't think there's anything groundbreaking here."Chandler adds that HP's expanded storage services push is in line with the company's post-merger strategy of exploiting the areas where each player excelled. "Compaq had a large storage consulting business, and HP thought they had a great opportunity for growth," he says.

IDC puts HP third in terms of share in this market, behind IBM Corp. (NYSE: IBM) and Electronic Data Systems Corp. (EDS), but ahead of EMC Corp. (NYSE: EMC) and Storage Technology Corp. (StorageTek) (NYSE: STK).

HP's large year-over-year jump in revenues is the result of its merger with Compaq; the HP revenue figure below for 2001 doesn't include Compaq.

Table 1: Top U.S. Storage Services Firms by Revenues (in Millions)

Gary Wright, VP of HP network storage services, says the company has 5,000 people around the world trained in deploying and designing storage networks. "We've done more than 2,000 SAN implementations worldwide," he says. "We believe we've done more by far than anyone else."The five new HP service offerings are:

In addition to these new services, HP is updating its pay-per-use option for customers of its StorageWorks XP 128 and 1024 disk arrays, which are rebranded versions of Hitachi Data Systems (HDS) Lightning arrays. HP will now let customers pay a fixed monthly fee, plus a variable fee that is based on metering the actual usage of their disk storage systems. Previously, under the pay-per-use plan, customers were required to pay for storage they had installed regardless of whether or not they used it.

"It's an alternative way for customers to acquire storage capacity," says Wright. "The idea here is to bring in more capacity than a customer needs today but only pay for what they're using." Sounds like HP is finally delivering a pay-per-use program that customers can actually understand the value of, then.

Other vendors, including IBM, offer similar pay-per-capacity options. In a variation on this theme, startup 3PARdata Inc. recently introduced Thin Provisioning, a feature that tricks applications into seeing larger disk volumes than are physically present (see 3PAR Spins Disk Trick).

Todd Spangler, US Editor, Byte and Switch