HP Hoping Software, Big Data Can Lead Way To Recovery4:07 PM EST Fri. Oct. 12, 2012
Hewlett-Packard has lofty goals for its $4 billion software division, the lone unit of the company expected to grow in the coming fiscal year. Yet HP's outlook for its big data assets is decidedly murkier, casting doubt on its ability to ride one of the industry's hottest technology trends.
On one hand, HP sees plenty of potential for Autonomy and Vertica, which form the basis of its nascent big data analytics strategy. George Kadifa, executive vice president of HP Software, told Wall Street analysts last week that HP is expecting significant growth for these businesses.
"[Big data analytics] is a new area that we are building, and it's actually doubling, if not tripling, on an ongoing basis, so it's a great opportunity for us," Kadifa said at HP's analyst meeting.
Autonomy's Intelligent Data Operating Layer (IDOL), a search and data processing technology, and Vertica's columnar database are "core technology engines" that set HP apart from competitors, according to Kadifa.
At the same time, Kadifa acknowledged that Autonomy, which HP spent $10.3 billion to acquire last August, is proving much more difficult to integrate with HP's sales operations than expected. HP is revamping Autonomy with a "coverage-based scalable model" to make it a better fit internally, said Kadifa.
"Autonomy is going to be a long-term project for us. We're going to be taking Autonomy from what is today a startup from an operational maturity point of view," Kadifa told analysts. "It will take a while. This is not a 1- to 2-month exercise. This is more like a 1- to 2-year exercise."
HP moved Autonomy into its Software division last month and hired former Microsoft executive Robert Youngjohns to run it.
Vertica appears to be faring much better at HP. Kadifa told All Things Digital earlier this month Vertica now has revenue in the "middle-double-digit millions" range and could eventually become a billion-dollar business.
Kadifa made no such claims in the analyst meeting, describing Vertica as a pillar of HP's software business and touting its ability to deliver search queries 100 to 1,000 times faster than relational databases.
Combined with HP's logger technology and correlation technologies, Vertica gives HP a competitive advantage, Kadifa told analysts. "What this allows us to do is to assemble streams of data, and we're talking millions and billions of data sets and assemble these and correlate them and create meanings out of them," he said.
NEXT: Slow Channel Rollout For Vertica and Autonomy
Vertica and Autonomy are complex technologies to sell, and perhaps for that reason, HP is taking its time in rolling them out to channel partners. HP currently does around 15 percent of its Autonomy and Vertica through the channel, and HP CEO Meg Whitman would like to boost that figure to around 40 percent, sources told CRN.
While HP's big data strategy has yet to impact the channel, partners are seeing opportunities in other areas. Bill Loupakos, senior vice president of professional services at American Digital Corporation, is working on multiple SAP HANA projects with HP and says these are lucrative deals.
Loupakos told CRN most of his customers have HP/SAP environments using NetWeaver Business Warehouse Accelerator. "We have worked closely with HP to introduce SAP HANA proof of concepts, which have proven three times faster reporting. This has led to a surge in SAP HANA projects with new HP servers and storage," he said.
Amid the doom and gloom around HP, its software business is a bright spot. HP is the world's sixth-largest software vendor and has some 50,000 customers. As HP's Kadifa noted in the analyst meeting, HP has the scale, technology and reach to be successful in software, and now it needs to focus on integrating technologies such as Autonomy with security and other parts of its software portfolio.
Patrick Moorhead, president and principal analyst at Moor Insights & Strategy, says HP has a "decent shot" at realizing success in software.
"They have a higher likelihood here than in services because of the close proximity to their infrastructure business," Moorhead said. "HP also is leaning into the hot areas of software, big data and security, which are top-of-mind and top-growth areas for the enterprise."
PUBLISHED OCT. 12, 2012