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Things couldn't get much worse for Hewlett-Packard. HP's stunning announcement last month that it was taking an $8.8 billion write-down and launching an investigation into accounting improprieties related to its $11.1 billion Autonomy acquisition came amid a host of financial struggles for the IT giant. Some are due to industry headwinds, such as slowdowns in PC and printer sales and weakening enterprise IT spending. Other problems are of HP's own doing, such as its $8 billion charge from its 2008 acquisition of EDS and an enterprise services business hampered by an outdated infrastructure and sales model.
The magnitude of the problems HP is facing is a powerful argument for why the company needs to focus on building out its big data portfolio. Research firm Gartner expects big data to drive $28 billion in IT spending this year and $34 billion in 2013. And according to IDC, 90 percent of digital content will be unstructured data -- i.e., the emails, voice and video Autonomy technology handles -- by 2015.
[Related: Reaping Big Data Benefits]
In Autonomy and Vertica, which it acquired in March 2011, HP has two unique and powerful big data technologies that represent a combined investment of nearly $11.5 billion. Given the nascent state of the big data market, HP could carve out a dominant position if it plays its cards right.
HP CEO Meg Whitman has said she intends to extend Vertica and Autonomy across HP's entire portfolio of products, including printers and enterprise hardware. At the HP Discover conference in Frankfurt last week, she stressed HP's commitment to Autonomy's technologies, according to published reports. The company released updated Autonomy and Vertica products at the conference and in recent months, HP has brought in two high-profile software executives, Robert Youngjohns and George Kadifa, to oversee what will be one of the most important technology development campaigns in its 73-year history.
While it's still early days, HP says it has made progress in leveraging its big data assets. "[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 told Wall Street analysts in October.
HP declined to make Youngjohns and Kadifa available to answer questions about the company's big data strategy. But the consensus opinion that emerged in the course of recent interviews with more than a dozen HP channel partners, former employees and current employees is that HP, at this stage, is still feeling its way with Vertica and Autonomy. Before it can become a force in big data, HP will first have to eliminate longstanding organizational barriers and get the channel involved in explaining to customers what big data is and how it can help them, sources told CRN. The channel will be key to sales as well as damage control.
"The Autonomy accounting issues aren't helping HP's overall value story, and this is why HP needs the channel and its local customer relationships to drive positive awareness and growth," one HP partner told CRN.
HP's spotty track record with previous software acquisitions has earned it a reputation as "a place where software goes to die," which is why even staunch HP proponents are guardedly optimistic about the company's prospects in big data.