Since taking over Hewlett-Packard's Enterprise Servers, Storage, and Networking (ESSN) Division as Executive VP and General Manager, David Donatelli has driven a strategy of standardization, simplification, and innovation into HP's core business. He stopped by the SiliconAngle.tv Cube at a major HP event in Barcelona, Spain, in November 2010, soon after the 3PAR acquisition, to discuss his philosophy, which was already paying large dividends for HP customers.
Innovation is obvious at HP in the last 18 months. During that time it has completely refreshed or replaced virtually every server, storage, and networking product in its inventory. In the process, it has redesigned its products to fit its vision of the virtualized, cloud-based IT future.
Standardization, of course, started with building in industry standards wherever possible throughout HP's products, one of the guiding principles of this major upgrade. The result is a largely open architecture which minimizes lock-in for customers. But Mr. Donatelli also built a different meaning of the term into the new products – wherever possible HP uses standard, modular components across and between product lines. “For instance, now you can swap power supplies around between different kinds of servers and between servers and storage units. You can swap industry-standard and Unix servers in racks. You can share parts where you never could before.” He invokes Henry Ford's mantra of part standardization when describing this strategy.
This, he says, simplifies things for customers. It also gives HP extra leverage in its supply chain. As of the interview, HP's supply chain totaled $60B annually and growing. And because of standardization, that purchasing power is focused on the smallest number of SKUs possible. “When you're the largest buyer of disk drives in the world, the largest buyer of memory in the world, the largest buyer of Intel products in the world, chances are you're going to get the best prices,” he says.
Another part of the simplification campaign is the creation of reference architectures. And HP carries this concept beyond its own products to encompass popular enterprise applications. So for instance it has a reference architecture, and more recently a packaged system, to optimize Microsoft Exchange, a reference architecture for Azure, and another for SQLserver. And then HP has been innovating on top of this highly commoditized base by integrating a combination of home-grown and acquired leading edge technologies such as 3PAR, StoreOnce, and Ibrix.
But Mr. Donatelli's the largest standardization and simplification initiative to date has been the PodWorks. HP's pod is a self-contained data-center-in-a-box – all users have to do is plug it in and add applications. HP is not, of course, the only vendor to offer pods – IBM and Oracle have conceptually similar pre-configured offerings. However, HP has created the first automated factory to maximize efficiency and minimize cost when build its pods.
Again, Mr. Donatelli emphasizes that the pod structure can simplify customers' lives. “We've gone through a building boom like crazy of next-generation data centers. Depending on the size of your company, you're spending hundreds of millions of dollars, to in some cases billions, on data centers. And as soon as you're done, you always have regrets.” The pod, he says, is designed to solve that problem for customers. Instead of having to design a new data center, customers can have pods drop-shipped to their location and installed wherever the customer has room – in a parking lot if necessary – without having to design a new data center.
This is really aimed at cloud service providers, who are scaling at an incredible rate. “We gave an example at a press conference of one of the social media players who buys 40,000 servers at a time. Most of our enterprise customers don't have 40,000 servers total.” And that, of course, is with a fully virtualized infrstructure. At that rate, he says, these large service providers don't have time to design data centers.
Action Item: HP's combination of open architecture, heavy investment in innovation, clear vision of the future of IT in a virtualized, hybrid cloud environment, and maximization of efficiency to control cost, is a strategy for providing maximum value to customers. As a result HP should be on the short list when planning IT refresh or expansion.